Figuring out how to buy wholesale can be daunting.
Can anyone buy from wholesalers? Do you need a license to purchase wholesale? Are there different types of wholesalers? Where can you buy wholesale products?
If that’s not enough, there’s so much information online and so many websites offering to help you buy wholesale products—and, unfortunately, not all of them are legitimate. So, what do you need to know to avoid making costly mistakes?
In this post, you’ll learn everything you need to know to quickly and confidently buy in bulk for resale.
What does it mean to buy wholesale?
Buying wholesale is the process retailers use when they purchase products in bulk and resell them individually. By buying in bulk, retailers can acquire products for a lower cost per unit and then sell them separately for more money in order to make a profit.
Here’s how buying wholesale typically fits into the big picture:
- Manufacturers will produce goods and then sell them in huge quantities to wholesalers.
- Wholesalers will sell the products in smaller bulk quantities to retailers.
- Retailers will sell the products individually to the end consumer.
For example, the apparel brand Feature buys products in bulk from brands like Nike, Converse, and Adidas, then resells the products individually to the end consumer.
Of course, it’s not always this straightforward. For instance, some retailers will buy wholesale products directly from manufacturers. On the other hand, some manufacturers and wholesalers will sell products directly to the end consumer.
There are also brands like Apple, which act as manufacturers, wholesalers, and retailers. This is because they produce their own products, sell them in bulk to other retailers, and sell them as retailers to consumers.
3 types of wholesalers
There are a few subtle differences between the different types of wholesalers. It’s important to understand these differences to ensure you only work with reliable wholesalers who’ll help you succeed.
There are three main types of wholesalers:
Manufacturers are the starting point in the supply chain. They turn raw materials into products you use every day. These companies can be small, making unique and handcrafted items, or really big and producing lots of different products for many brands.
Retail wholesalers are the middlemen. They buy products in big quantities from manufacturers and sell them to stores. They get discounts for buying in bulk, which means they get the products at a lower price per item.
Wholesalers will sometimes sell products with their own packaging and label. They also have a good understanding of market trends, so they always have the best products available for sale.
Merchant wholesalers buy products directly from manufacturers, and then sell them either to stores or directly to consumers. They have different ways of selling, including cash-and-carry, dropshipping, and online sales, sometimes even showcasing products in warehouse showrooms.
Shein is a popular merchant wholesaler. They can be found selling in bulk and to consumers on Alibaba, eBay, Amazon, Poshmark, and its retail website.
How to buy wholesale
1. Prepare to buy wholesale
If you want to buy in bulk and sell individually, you need a license (and some other documents—more on this in a moment). Wholesale licenses are often referred to as a reseller’s license, a reseller’s permit, a reseller’s certificate, or a sales tax permit.
Each state has its own rules, so be sure to research the specifics for your region.
Let’s take a look at how to legally buy wholesale for resale. Here are seven things you need to get started. (It’s worth noting that these requirements are different depending on the state or country you’re in.). Check out the US Small Business Administration’s website to determine which licenses and permits you may need.
If your business also has an online presence and ships products to customers in different states, you must collect sales tax on shipping and handling in those states. And remember, sales taxes differ from state to state. To do this, you need a TIN, or taxpayer identification number, which is an official number issued by the Internal Revenue Service.
It’s a good idea to have insurance in the event that something goes wrong—especially if you’ve just started learning how to buy wholesale.
There are a few different types of insurance you may want to consider. For example, you may want to invest in limited liability insurance. You can also get commercial insurance to minimize other business risks. To learn more, check out Shopify’s guide, Commercial Insurance: What Is It, And Do You Need It For Your Ecommerce Store?
2. Identify the wholesale products you need
There are many wholesale products to sell. But if you want to succeed as a wholesaler, you have to know your customers, their preferences, and their needs.
Conduct market research to find out what’s hot, what’s not, and what’s missing. You can use tools like Google Trends, social media, and market reports. Take a look at what your competitors are selling and see if you can offer something better or cheaper than what they’re offering.
Decide what your niche is based on your understanding of the market. What kind of products will you specialize in? Having a niche can help you focus your marketing and buying.
3. Research potential wholesale suppliers
Choosing the right wholesale supplier for your business isn’t the most straightforward task. So, let’s talk about a few things to keep in mind when considering which wholesalers to purchase from.
When looking for vendors to buy wholesale from, it’s important to select a legitimate company that’s transparent about its practices. It’s also crucial to avoid engaging with companies that have shady or unethical business practices.
Don’t be afraid to ask questions about the company and its processes. Your wholesaler is essentially your business partner, and they should be willing and able to answer your questions sufficiently. If they’re not, that’s a serious red flag.
Faire reduces this risk and hassle by listing only trustworthy, pre-vetted brands.
Look for wholesale vendors who consistently demonstrate good customer service. Check out review websites, ask for references, and, if possible, speak with existing customers and ask about their experience.
Any wholesale supplier you choose should have a deep understanding of their products and niche. They should also be able to pass this knowledge on to help you market the products. The truth of the matter is that, when you succeed, they succeed. As a result, good suppliers are invested in your business success.
Take Noble Otter Soap Co. This wholesale soap company is run by two knowledgeable and passionate soap makers—precisely the kind of allies a business needs when selling a specialist product.
Ideally, you should be able to buy in bulk online for your business, like you would with a personal purchase. Sadly, this is rarely the case with B2B transactions. In fact, many wholesale suppliers have cumbersome and challenging payment processes. This is another reason why it makes sense to use Faire— after signing up, you can simply check out online, like you usually do.
Be realistic about your budget, and don’t forget to factor in unforeseen expenses. For example, when you calculate your pricing, consider sales, discounts, and other promotions you may run. And consider that not every product will sell well.
These factors will affect your profit margins—so make sure to consider them when you make a decision about how much inventory to keep. Don’t be afraid to shop around, as many wholesale vendors stock the same or similar products at different prices.
4. Contact the suppliers you’re interested in
Once you’ve shortlisted several wholesale vendors you’re interested in working with, it’s time to reach out to learn more about them.
Take a look at the questions below and keep them on hand when you do your research. These questions can help you gather the information you need to make an informed decision.
- Where are your products made or manufactured?
- What are your wholesale delivery lead times? (As a retailer, quick turnaround is essential, because running out of stock means missed revenue.)
- What is your minimum order quantity (MOQ) for wholesale?
- How long has your company been operational?
- Do you sell products directly to consumers?
- Can I buy samples before I make a purchase?
- What is your return policy for any damaged items within an order?
- Do you have a digital wholesale ordering system, or will I need to place an order on the phone, by email, etc.? (These systems help eliminate things like order errors and fulfillment delays.)
- What happens if my order arrives late?
Some vendors will have already answered many of these questions on their website’s FAQ page.
5. Purchase and receive your wholesale items
Before making a purchase, communicate with your supplier to confirm product specifications, order quantities, expected delivery time, and any other terms or conditions. Create a detailed purchase order that outlines every aspect of your order, including quantities, descriptions, agreed prices, and delivery dates.
Terms can vary greatly, from prepayment to 30-day terms or longer. Try to negotiate terms that favor your cash flow. If shipping logistics are handled by you, work with a reputable freight forwarder. They can manage the complex logistics of shipping, customs clearance, and documentation.
When your order arrives, inspect the shipment immediately for accuracy and quality. Check for the correct quantity, and inspect for damages or defects. If there are any issues with the order, contact your supplier immediately. Refer to your purchase order and terms agreed upon to resolve discrepancies or negotiate returns/replacements.
Where to buy wholesale products in 2024
If you’re wondering where to buy wholesale products, this section’s for you! There are plenty of ways to find wholesale suppliers—let’s look at a few tried-and-tested options.
Faire is an online wholesale marketplace that connects independent retailers with small businesses and makers (brands) to browse and order products wholesale online. It’s essentially a B2B platform designed for local retailers to discover and stock thousands of unique and independent brands from over a variety of categories like home, lifestyle, beauty, and more.
2. Wholesale marketplaces
Here’s a list of alternative wholesale shopping sites where you can buy wholesale products for resale:
- Alibaba is the largest business-to-business (B2B) online marketplace globally. As a result, it lists countless wholesalers, manufacturers, and distributors to choose from—most located in China.
- IndiaMart is the largest B2B online wholesale market in India (and the second-largest globally, after Alibaba). It has a massive database of wholesale suppliers to choose from, many of which are based in India.
- Global Sources is a wholesale market based in Hong Kong, and the majority of suppliers listed are based in Asia.
- eWorldTrade is a US-based wholesale market that lists wholesale suppliers from around the world.
- EC21 is a wholesale marketplace based in South Korea, listing more than 1.5 million suppliers.
- TradeIndia is another popular wholesale market based in (you guessed it) India, with more than 2,000 categories to browse.
- DHgate is another wholesale market based in China, featuring millions of sellers in China, Turkey, and Korea.
- Made-in-China mainly helps to connect global buyers with suppliers in China.
Unlike Faire, most online B2B marketplaces don’t pre-vet wholesale suppliers. Not only that, but many of these websites offer no way to check out on the platform, so you have to contact suppliers and negotiate before you can buy wholesale products. This can be incredibly challenging to do successfully—even for experienced retailers.
Faire keeps things simple by allowing you to buy wholesale products from pre-vetted suppliers directly on the website.
2. Word-of-mouth recommendations
Word of mouth is one of the best ways to find wholesale suppliers, as they’ve already been pre-vetted by someone you trust. Ask your connections for their recommendations and listen for repeated names in your network.
3. Ecommerce forums
What if you’re new to buying wholesale and you don’t know anyone in the space personally? Don’t worry, there are plenty of established ecommerce forums where you can connect with other retail business owners. Plus, wholesalers also tend to hang out in forums hoping to pick up new business. To get started, check out Shopify’s online community.
4. Facebook groups
Similarly, there are many Facebook groups where you can connect with people who are bulk buying wholesale for resale. Again, you can get some great deals, but it’s also a little risky—so thoroughly research suppliers to ensure they’re legitimate before handing over your hard earned money.
5. Google Search
If you’re still struggling to find a wholesale supplier, you can always search on Google. However, it’s important that you do a deep dive, as the best results are not always on the first few pages of the search results. And again, thoroughly vet the suppliers you find.
Start selling wholesale with Shopify
Learning how to buy wholesale for resale can be challenging. But with a little tenacity and patience, it’s possible to find a reliable supplier offering profitable products for your business.
Remember, unless you plan to buy wholesale for personal use, you must obtain the proper licenses to buy in bulk for resale. And it’s definitely worth taking the time and effort to do your research and shop around. This will help you get the best quality products at the best prices.
Shopify is built to streamline the B2B sales process with a robust set of tools for managing inventory, processing bulk orders, and maintaining customer relationships. You can create a password-protected wholesale page on your ecommerce site, or you can integrate with wholesale marketplace Faire to reach a wider audience and sell in bulk online.