Organization…Buy Wholesale and Sell Retail


Letha Oelz


The key differences between wholesale and retail buying are the quantities of products purchased and the prices of the products. Wholesale buyers purchase a large quantity of products from a supplier at a reduced cost with the intention of selling them in a retail setting, whether that’s a brick-and-mortar store or an online shop.

Wholesale prices are always a good deal lower than retail price because wholesalers often get their products directly from a manufacturer or distributor. If you think of a retailer as the middleman between a manufacturer and the customer, wholesale buying cuts out that middleman and the added costs that come with it, such as their employee wages, shop fees or rent and marketing costs. Without these extra costs, a wholesaler is free to offer their products at a lower price while still enjoying a profit.

Buying wholesale products and selling them at retail prices can be the foundation of a solid business model. The concept is simple – a product is purchased at a low price and resold at a higher price. However, there is much more to becoming a successful retailer than just buying low and selling high – primarily determining what to sell, where to buy it, and how to resell it at a profit.


As we discussed above, the main benefit is savings. Wholesale buying allows you to avoid all the mark-up that comes with buying retail, which has to cover the retailer’s:

  • Employee wages…
  • Shop fees for physical and/or online stores…
  • Packaging fees…
  • Shipping and handling fees…
  • Marketing costs…
  • Wholesale buying allows you to purchase products in bulk at a heavily discounted rate. These savings will pad your profit margins once you’ve factored your own expenses into the final price you list on your store…

Buying wholesale will also allow you to build relationships with wholesale suppliers, which can lead to negotiations for better prices, higher quality, faster shipping speeds, and more. The more business you do with your wholesale suppliers, the more incentive they will have to give you the best experience and deals possible.

Learning how to buy wholesale can seem like a daunting process at first, but once you’ve worked with wholesalers and learned how to source the best products for your online store, everything becomes easier.


Choosing the right products to offer is one of the most fun parts about a retail company. More important, the right product can determine business success. Some retailers focus on products related to personal passions such as sports or social causes. Others simply follow the trend- what’s hot today becomes a product for sale tomorrow. Still others identify a market need, such as dishwasher-safe baby gear, and build a portfolio based on the niche.

Before making any sizeable investment, it is key to determine that the products can be purchased at a low cost, and that there is adequate demand so the items can be sold at a profitable price.


No matter the product, a key to successful retailing is in selecting the best source for purchasing the product at a low cost with minimal headaches. This step takes a great deal of legwork and research, with thousands of distributors and warehouse operations competing for business.


By far, the most popular way that new retailers procure products for resale is through online wholesalers. The largest comprehensive source of global suppliers is, providing large quantity or ‘bulk’ purchasing from vendors around the world. In addition, thousands of manufacturers are listed with directories that give retailers a range of choices in vendors.


This step will take some time and research. When searching for the best places to buy wholesale, you’ll need to consider factors such as product price and quality as well as features of the wholesale supplier itself, including any additional fees, their reputation, and any extras they can provide such as packaging or shipping options.

Online directories are great places to find reputable wholesale suppliers. These sites provide lists of wholesale suppliers for thousands of products in a variety of categories. One benefit of using certain directories, like SaleHoo, is that all wholesale suppliers listed will be pre-vetted for quality, saving you precious time and helping you avoid the pitfalls of landing a disreputable wholesaler that could sink your business.

It might surprise you to hear that finding suppliers locally is actually one of the best ways to buy wholesale items. A quick Internet search will help you find local wholesalers or even wholesale trade shows in your area. While it may seem like a waste of time when compared to finding wholesale sellers online, looking locally is a great way to network and find even better deals, and allows you to meet your suppliers face to face.


  • Is there a fee to join the wholesale club or website?
  • What purchase quantity is needed to get a good price?
  • Can a retailer easily communicate with the supplier?
  • Are there any complaints about the wholesaler?
  • Will the company ship directly to a customer (drop-ship), or must shipping be arranged separately?
  • Answering those questions can help you select the right wholesale company.

You can buy just about anything online at wholesale prices and quantities. Here are a few basic steps to getting started with buying wholesale items online:

  1. Decide what you want to buy, and how much

Do you have a specific product niche or brand you’re trying to build? Are you looking for higher sales volumes or larger profits on specific high-ticket items? Will you store the items yourself, or are you following a drop ship sales model?

  1. Make sure you’re licensed

If you’re in the United States, you’ll need a federal tax ID and may need a sales tax license if you want to buy and sell wholesale items online. Check your local laws and be sure you’ve done all the necessary paperwork to avoid having your business shut down.

  1. Source your suppliers

Online directories can help you find trusted wholesale suppliers and provide you with tools for deciding the best wholesale items to sell. Later we’ll tell you about some of the best places to find wholesale sellers.

  1. Connect with your wholesale suppliers

Ask questions about what they have to offer, their policies for wholesale buying and what deals they can offer you. It’s important to find a wholesale seller you can trust.

Don’t be afraid to ask for perks or added discounts. You might be able to negotiate a sample shipment before committing to a large order.


Products don’t have to be limited to those available from online wholesalers. Alternate places to find low-cost goods that can be sold at a profit include items made by local artisans or crafters, products sold at factory stores next to a manufacturing facility, and overstock or closeout sales at the local big box store. The key is making sure that the product can be sold at a profit, even after accounting for shipping and handling.



Once the products and sources have been selected, it’s time to tell the world about it, get products into customer hands, get paid, and provide excellent service after the sale.


Retail marketing paves the path that customers take to the product. By far, the top low-cost methods for marketing today are through new media channels such as social media, banner ads on websites, and online classified ads. A retailer with a knack for writing and photography may want to create a blog and share product information on Facebook, Twitter, Pinterest or Instagram. Some manufacturers or wholesalers offer marketing materials for retail use, often for free – be sure to ask.

The marketing needs to fit the product and potential customer and be tailored to best communicate the product value.


Most retailers understand the importance of getting the product available for purchase worldwide by going online. Many online retailers start out by selling through well-known trusted third parties like eBay and The customer selects the product and submits payment online, and the site takes a commission before passing the money onto the retailer.

This is convenient, but the fees can add up. With more experience and higher sales, consideration should be given to opening a unique online store that not only promotes the product but also provides a secure way for customers to purchase. Sales can also be made in brick-and-mortar stores, at local fairs, through ads on craigslist, or via Facebook yard sale sites.


Part of selecting the sales venue includes choosing the best delivery method for the products. One of the most popular ways to sell wholesale products at a profit is through drop shipping – the retailer advertises and sells the product, and a manufacturer or distributor ships the item directly to the customer’s address. This allows the retailer to offer a variety of merchandise without having to maintain a warehouse.

Another popular way to get products into customers’ hands is to use a fulfillment service. The retailer buys in bulk and has the product shipped to the fulfilment center, which ships the product to individual customers. The fastest growing service of this type today is from

Some wholesalers, local artisans or crafters, or brick-and-mortar stores may not offer any shipping services. In these cases, the retailer can set up a simple shipping line in a back office using low-cost supplies and a postage meter. If sales are large enough, the shipping function may be outsourced to a third party logistics provider. Either way, it is key to ensure that the shipping and handling costs allow the retailer to make a profit on the sale.


In today’s world, most payments are made with credit cards, so the retailer will need to set up a merchant account to accept payments. Using PayPal or other accessible secure gateways can be easy ways to accept payments either online or in person. Fees for merchant accounts vary widely, and negotiation for reduced fees is common.


Shoppers, whether they purchase online or in a store, want to be treated fairly and have their problems resolved quickly. The retailer must be prepared to handle customer issues with product quality, shipping problems, billing hiccups and more. Small retailers may be able to handle customer issues personally via email, text and phone calls. As the business grows, the seller may wish to engage a customer service call center to handle routine problems quickly and affordably. Providing good customer service is a sure way to get repeat sales.


Prior to making the first sale, a new retailer will need to have a number of state, federal and legal mechanisms in place. A comprehensive new business overview can be helpful in assuring that important items aren’t missed. In particular, the new enterprise should have a firm grasp on:

  • Determining how the business will be set up or incorporated…
  • The need for a business or retail license…
  • The method of collecting and paying sales tax and obtaining a national or federal tax I.D. …
  • Business liability insurance…
  • Careful planning can avoid many pitfalls later. Business owners may wish to consider engaging a coach to ensure accountability and help cement success….


Buying wholesale and selling retail can be a fun yet challenging way to make money. Good planning, strategic sourcing and smart marketing are critical to the business’ success or failure. There are plenty of resources that allow a spirited entrepreneur the potential for success, limited only by the type and number of products to be sold combined with enthusiasm for marketing and providing excellent customer service.


Myth #1: eBay Is the Best Place to Sell Your Wholesale Goods

Now this is a particularly popular myth. As the world’s biggest marketplace, eBay has made its fair share of millionaires. What you don’t hear about so commonly is all the people who struggle to make a profit from eBay because 100 other people are selling the exact same products for more competitive prices.

This is not a new situation. Supermarkets and large discount stores often run at a loss on some items in order to attract more customers. For small or new sellers, this is a deadly scenario.

The fact is, eBay is simply too competitive in some categories. Electronics, designer clothing, and computer games are all dangerous territory for the new seller. You won’t stand a chance against established sellers who’ve already got a strong following and highly competitive prices.

So what should you do? If your product falls into these or any other highly competitive category, I recommend shifting your focus to less competitive markets such as classified newspapers in your local area, or eBay alternatives such as Craigslist or Bonanza. You can also find sites that cater specifically to certain niches, such as Newegg for computers and electronics.

It’s also a good idea to try using eBay international sites such as eBay UK or eBay Australia, as well as other auction sites with less competition, such as Amazon.

One advantage of eBay US, however, is that the huge amount of competition makes it a brilliant place to pick up cheap goods to sell elsewhere! It’s not uncommon to find the best prices on eBay.

Myth #2: You Can Find All Your Wholesale Sources Online

The Internet provides easy access to many wholesalers and a quick way of making initial contacts. However, it certainly doesn’t provide access to all wholesalers.

If you’re serious about finding the best wholesale prices for your products, then it pays to check out other sources as well. Try looking through trade magazines such as Closeout News and Wholesale Merchandise. With fewer people vying for stock, there’s a good chance you’ll find some exceedingly good prices tucked away in the corners!

Finally, building up personal relationships with suppliers is absolutely essential for getting the best-priced goods. So whether you’ve found your supplier online or in a magazine, it’s important to make a phone call, start up an email exchange, or have regular chats on Skype and get to know them.

The time you spend building a relationship will put you in a stronger position to get better prices. Also, because you know your supplier, you will feel more confident that things will go smoothly when you finally do place your order.

Myth #3: Pricing Research Is Unnecessary and Takes Up Too Much Valuable Time

Whenever I mention this one, people always chorus, “But of course we know research is important!” Well, why don’t you spend more time doing it, then?

The number of people who pass over pricing research constantly amazes me. Everyone always agrees that it is important to research prices, but when it comes down to it, they seem to think that they just “know” how much items cost wholesale, and how much profit they are likely to make later.

But how can they just “know”? Prices are constantly in flux, and carrying out some decent (and yes, time-consuming) research is essential to a successful business for two reasons:

Firstly, it’s important to get a good idea of the average resale price for your item before you get started. For a number of popular items (DVDs, electronics and computer games in particular), the profit margins tend to be very low.

Despite this, many sellers see the popularity of the item and dive in head first. Oversaturated markets just mean a hell of a lot of work for very little in return. Throw big, established sellers into the mix and it’s almost impossible to compete.

You won’t know which markets are oversaturated until you research them! So visit auction sites and read classified ads and any material you can get your hands on until you know exactly what you’re getting into.

Secondly, your preconceptions of value may be completely wrong. People have a tendency to believe that “wholesale” automatically means a fifth of the retail price. This is usually totally incorrect!

Some sellers have emailed me in shock when they realize that they actually have to spend a significant amount of money on their wholesale stock. “I always thought that purchasing a container of wholesale plasma TVs would only require a few hundred dollars’ investment, but it looks more like several thousand!” wailed one seller recently.

Well, I’m sorry to shatter your hopes and dreams, but buying wholesale doesn’t always mean huge profits for very little investment. For some items, such a scenario is possible, but only if you do the research!

Myth #4: Niche Items Can Be Bought from Light Wholesalers

Finding a niche item that no one else is supplying at a competitive rate is every seller’s dream. However, if you think you’re going to be able to find a wholesale supplier for left-handed guitar necks by doing a quick Internet search, then you couldn’t be more wrong.

Niche products are hard to find precisely because they aren’t wanted by absolutely everybody. Thus, finding a supplier will take quite a bit of work on your part, as these items usually can’t be purchased from independent wholesalers. Instead, you’ll have to contact large wholesalers, or even the manufacturer.


Sources, References & Credit: Google, Wikipedia, World Book Encyclopaedia, Pinterest, Linked In, Learn Org, Laurie Tardif, I Love to Know, Entrepreneur, Salehoo, Small Business, eBay, Amazon, DOBA, Worldwide brands, Alibaba,