Wholesalers are responsible for buying products directly from manufacturers in large volumes and selling them to distributors, retailers, and others in smaller volumes. Buying in bulk is the most cost-effective method of stocking store shelves with the merchandise of choice. Here are several pros and cons of buying wholesale products:
Low cost: The ability to buy from local or foreign wholesalers means that it is possible for merchants to pay much less than would be expected if they bought individual items. To get the best prices it is necessary to buy in bulk. Wholesalers are rarely willing to sell small quantities or individual items to merchant members or consumers.
Ease of Use – Retailers prefer the simplicity of buying in bulk because you can shop for a wide range of products in one destination. Wholesalers have the ability to stock products from multiple manufacturers, making it easy to choose the right products to meet specific needs. Also, shopping from one place saves a lot of time by not having to travel to different stores.
Negotiate the price: Wholesalers are likely to agree to negotiate the most attractive price for those merchants who visit frequently. This has the advantage of helping both the wholesaler and the trader by attracting a repeat customer and at the same time offering the most attractive prices for repeat buyers.
Shipping: Most large wholesale centers provide a shipping service for larger orders. Although this may involve a small charge, it is still a convenient option for businesses that do not have regular access to adequate transportation.
Storage space: If a merchant plans to buy in large volume, it is essential to have enough storage space to hold the products until they are sold. For those without sufficient on-site storage space, it may be necessary to use rented space, which will increase overall business costs.
Online sellers: Not all wholesale centers are willing to work with smaller online merchants. This means that the most attractive deals are only available from the big bundles or established retailers.
High investment: Before being in a position to buy wholesale, it is necessary for the buyer to have substantial capital saved. Most wholesalers have a minimum order limit in place to ensure products are purchased in volume, which could present a problem for the new small business just getting into the retail business.