Ways to Source your Product

Direct Wholesale Purchase:

Most people think of Direct Wholesale Purchasing when they think of owning their own web or mail-order business. To make wholesale purchases, you’ll need a resale license and establish a relationship with wholesalers or manufacturers. Orders can be as low as $100 with wholesale distributors, but most are closer to $500 or $1000. If you’re purchasing items directly from the manufacturer, their minimum orders are often as high as 1000-5000 pieces of the item you are interested in.

It is important to have a good understanding of the supply chain before you attempt to purchase products. At the top, you’ll find manufacturers, the factories that produce products in extremely large quantities. Some sell directly to retailers, many prefer to deal only with large wholesale distributors.

Manufacturers / Factories > Wholesale Distributors > Retailers > Consumers

If you decide to purchase items from a wholesale distributor, you can expect discounts around 50% off the retail price.   Discounts from a manufacturer can be as much as 75-80%. Some industries, such as electronics, will be subject to smaller profit margins.

Don’t forget to factor in the cost of shipping when you’re making projections about the profitability of your chosen products. You may want to purchase sofas from China at 50% off the U.S. retail price, but with the costs of shipping on such a heavy item, your profit margins would be significantly reduced. On the other hand, something small or light weight, such as a DVD or book would be extremely affordable to ship.

If you’re interested in purchasing wholesale, or directly from the manufacturer, sites like Alibaba, Tradekey, and ThomasNet can help you locate representatives and product listings for a variety of manufacturers. You should always do extensive research on a company to validate them, before arranging to make a major purchase.  When selecting a supplier, ask for a free product sample, or a significant price reduction on a sample, to check the quality of the goods you will be purchasing.  Always ask for references and follow up on the references before negotiating an agreement with the supplier. Click on the links above to visit these websites.  Our video tutorial covers the details for navigating these resources.

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