Wholesale is relatively simple and direct. You can buy products directly from manufacturers or middlemen at a discount or wholesale price, and then resell them at a higher price. Compared with processed and manufactured products, wholesale products have much lower risks because wholesale products themselves have a certain degree of popularity, there is no risk of design and processing, and the minimum order quantity is much smaller than that of processed and manufactured products. Sometimes even 1 piece can be shipped. The suitable groups, advantages, disadvantages, profits and risks of shipping products are as follows.
(1) Suitable groups.
Sellers who want to start e-commerce business as soon as possible, or want to operate multiple products and brands, wholesale will provide a wide range of product selection opportunities.
(2) Advantages.
● Brand awareness: If the brand has a certain degree of popularity in advance, it will also save some advertising costs in the later stage.
● Less inventory pressure: Wholesale products are usually market-proven, and selling verified products can reduce inventory pressure.
(3) Disadvantages.
● Lack of characteristics: Wholesale products are not unique. When sellers sell, there may be a large number of other sellers selling the same product in the market. Therefore, it is necessary to show its own characteristics in order to retain consumers.
● Price control: Some brands will enforce price control on their products. Therefore, they are subject to self-pricing.
· Inventory management: Compared with processing and manufacturing, the minimum order quantity for wholesale is much smaller.
● Energy consumption: If a variety of products are sold, then the merchant needs to spend more time on supplier management, which consumes more energy.
(4) Profit.
Generally speaking, wholesale products will have a profit of about 50%.
(5) Risk.
The inventory risk and homogeneous competition risk are relatively high.