Pros and Cons of Buying Wholesale
Wholesalers are responsible for purchasing goods direct from manufactures in large volume and selling to distributors, retailers, and others in smaller volumes. Buying in bulk is the most cost-effective method to fill the store shelves with the preferred merchandise. Here are several pros and cons of buying wholesale products:
Pros
Low-cost: The ability to buy from local or foreign wholesalers means it is possible for traders to pay a lot less than would otherwise be expected if buying individual items. To get the best prices it is necessary to buy in bulk. The wholesalers are rarely willing to sell a small number or single items to members of the trader or consumers.
Easy to use: Retailers prefer the simplicity of buying wholesale because it is possible to shop for a wide range of products at a single destination. Wholesalers have the ability to stock products from multiple manufacturers which makes it easier to choose the right goods to match the specific needs. Plus, shopping from one location makes it possible to save a lot of time by not having to keep traveling to different shops.
Negotiate the price: Wholesalers are likely to be agreeable to negotiate the most attractive price for those traders that visit often. This has the benefit of helping both the wholesaler and trader by bringing in a regular customer while also providing the most appealing prices to the regular buyers.
Shipping: Most of the large wholesale centers provide a shipping service for larger orders. Even though this might involve a small charge it is still a convenient option for those businesses that don’t have regular access to suitable transportation.
Cons
Storage space: If a trader is planning to buy in large volume it is essential to have enough storage space to keep the goods until sold. For those without enough on-site storage space it might be necessary to use rented space which will add to the overall business costs.
Online sellers: Not all wholesale centers are willing to work with the smaller online traders. This means the most attractive deals are only available to the large outfits or established retailers.
High investment: Before being in a position to buy in bulk it is necessary for the buyer to have substantial capital saved up. Most wholesalers have a minimum order limit in place to make sure goods are purchased in volume, which might present a problem for the small startup company that is just getting into the retail business.