How to Make Money With Wholesale Buying

Unlike the typical consumer, retailers buy their goods in large, discounted quantities to fill their stores. This type of purchase is called wholesale buying and it can be a way for you to earn money as a sole proprietor. Start your own small business and maximize your profit margin by reselling wholesale products.

Instructions

1. Search wholesale directories (see the Resources section) for products you know a lot about. The more you know about your products, the more easily you can sell them. Choose just a few related products, or even a single product, to simplify the marketing process. For example, you can market earrings, necklaces and bracelets to the same group of people, but earrings, tennis rackets and lawn mowers require you to advertise to multiple groups.

2. Purchase the least expensive, best quality wholesale products you can find. The products must be of a high enough quality to keep customers satisfied with your business, but as inexpensive as possible to increase your profit.

3. Set a price markup for your products that will cover the wholesale cost and allow you to make a profit. Because there is no single markup system, use the prices of similar products as a guide. Use the manufacturer's suggested retail price if one is provided.

4. Give your business a name, as you'll need to distinguish yourself from other sellers. Choose a name that readily conveys what you sell -- "Eddy's Electronics" or "Bangle Boutique," for example -- and contact the county clerk to make sure no other business is using the name.

5. Place your products for sale in a marketplace where buyers are likely to go. This will vary depending on what you're selling. For example, you might sell wicker baskets at a farmer's market, jewelry at a flea market and electronics on the Internet. Display the name of your business, the products you sell and their prices prominently to entice shoppers.

6. Briefly explain the benefits of your product, and how it works, to shoppers. It's important to be brief, yet descriptive, so that you persuade shoppers to buy before you lose their attention. Accept payment upon delivery of the product.

Tips & Warnings

• Contact the local Small Business Administration office (see Resources) to find out whether any special laws apply to your business in your area.

References

• Wholesale Newsletter: What's Your Markup?

Resources

• Wholesale Directory
• Hub of Wholesale
• Wholesale Central
• U.S. Small Business Administration: Local Resources