Among ecommerce observers, the role of wholesale companies is often misunderstood. They are seen as the companies that provide the type of products which sell easily and for a low unit price.
These are the types of products ecommerce sites (and many brick-and-mortar outlets) like to source in bulk orders, as this simply allows them to sell more (something which is necessary for products with a low unit price).
A good example is inexpensive sunglasses. Olympic Eyewear are a company providing bulk sunglasses orders to ecommerce and brick-and-mortar retail outlets. An outlet can expect to sell a lot of these, and so the wholesale ordering business model makes sense.
None of that is incorrect, and it is certainly one of the great benefits of buying wholesale for millions of companies. However, this is not the only thing wholesale companies offer, and we can turn to Olympic Eyewear again for an example. Note that the sunglasses orders provided by this company are assorted batches – that means there is a variety of sunglasses styles within each order, showing that wholesale can offer variety too.
Indeed, even small companies that offer homemade crafts often order from wholesale companies. But how can a product be wholesale and homemade? Well, it is not the products which are ordered wholesale, but the components required for their assembly. This is a model that can allow a company to retain the “homemade” badge of authenticity long after order load has made it impossible for products to be made from scratch in-house.
Here we see another great advantage of the wholesale model, and one which is not well-known. This is that wholesale companies can be of use to product manufacturers as well. Many factories that assemble products will not manufacture the parts – sometimes, these parts are sourced wholesale. This is something that a retail outlet can do as well. There is a great benefit to ordering components wholesale.
Smart Bulk Shopping
Of course, there is a good and a bad way of going about ordering parts from a wholesaler. There are also many benefits to doing it right. The most important point is to properly shop around. We cannot tell you where (that depends on your products and the parts you require for them) but it is certainly the case that price can vary for such products.
The reason for this is that these are rarely products that are sellable on the consumer market. They are the parts which create those products. Accordingly, the market forces which often set the price of products come instead from businesses and not consumers. Consumers are a much better metric of product value, and you’ll find that “parts”, designed to be sold B2B, can vary in price.
Furthermore, the most effective bulk ordering also plays a role. How much should you purchase, and how often? There can be quite a big cost difference between ordering parts in bulk orders, matching the amount you need, and planning out fewer larger shipments over a longer period. The latter option can often work out considerably cheaper. You will of course need to do a bit of market research and projections of sales over that time period. If this data is not accurate, you could end up purchasing too much.
Do it right, however – match what you order to what you actually need and investigate the most cost-effective ordering scheme – and wholesale can offer you many benefits when you manufacture or assemble your own products.
Ultimately, wholesaling doesn’t just bring down the cost of products per unit price – it can bring down the price of manufacturing products too.