Archive for the ‘wholesale tips’ Category

How to Make Money Selling Products with No Profit Margin

Thursday, April 5th, 2012

cables
Have you ever bought a Printer for your computer, and wondered why you have to buy the Printer Ink separately? Ever bought a television, and then had to go buy the cables you need for it separately?

These are just two small examples of how the big chain stores actually make their profits in the Electronics market.

The Electronics market on the Internet is very often the first thing that newcomers to online business try to get into. It’s flashy and cool, and everybody says it’s the hottest market on the Internet. Well, maybe it is, but when you have, say, 100,000 people buying Electronics online every day, and 120,000 people selling them, none of the sellers are going to make much money.

It’s a pretty well saturated market, as has been for a long time. Most newcomers look at the wholesale pricing they get from Electronics Drop Shippers and other wholesalers, and complain that the prices are too high.

But they’re not. When you work with legitimate wholesalers like the ones you find in our Certified Directory, the prices are right where they should be.

The thing that most people don’t understand is that not only is Electronics highly competitive, which drives the profit margins down, it’s also an Accessory and Service Plan Market, and always has been. That means that the profits are not so much in the products themselves, but in the Accessories and the Service Plans that get sold with them!

Of course, you’re probably not going to be selling Service Plans for the products you sell on your website or eBay Auctions. So, let’s go back to the Printer Cable.

You can get a great printer for a good price at places like Best Buy. But, you can’t print anything until you buy the Cable, the Ink, and the Paper! And once again, that’s where Best Buy makes their money.

You can do the same thing. If you feel that you must sell in highly competitive markets, look at the products you’re selling, and think about the kinds of accessories that can go with them. Then, create package deals that you can sell on your Stores and Auctions. That’s how people who ARE making money in Electronics are MAKING that money!

Talk to your Supplier. Ask them what they carry that you can use to accessorize the products you sell, no matter what market you’re in. I guarantee you’ll find that the accessories carry a higher profit margin than the base products themselves, and that’s where you’ll make your money.

Creative Commons License photo credit: Peter Kaminski

Do your homework before deciding what to sell online!

Tuesday, March 6th, 2012

handbags
I LOVE Coach Handbags. They are among my favorites in designer handbags. I have a few in my collection and I’m always on the lookout for another style that I like.

Since I love Coach Handbags so much, wouldn’t it make sense that I should sell them?

But, before I set my heart on something to sell, I should look at all the factors involved.

First, Coach doesn’t allow their handbags to be sold online by just anyone. They restrict their sales to prevent counterfeit products. So they only prefer to work with stocking retailers, specialty stores and catalogs that can meet their criteria.

Second, they are not looking to setup new wholesale relationships. They already have the stores they want to resell their products, and they aren’t looking to expand into new territories.

How do we know this? It’s on their website in the company information section.

Coach isn’t the only company like this. There are many other brands and designers that restrict sales and the product types don’t just stop with trying to purchase wholesale handbags. Electronics, baby items, clothing and more are restricted by many brands.

Make sure to do your homework before you decide on what product to sell, because there is a big chance that you cannot sell that product! Check out their websites, look at their FAQ’s, policies and procedures to determine if the company will even work with you at all.

We here at WorldwideBrands.com know and understand the difficulties that many online retailers face in locating products that they can sell. We only list in our Directories products that are available to online retailers and small based home business owners.  We verify the legitimacy of these companies to protect our members from scams, middlemen and counterfeit products. We do our homework so our members don’t have to waste their time running in circles and just focus on what is important; selling products online.

Creative Commons License photo credit: WTL photos

What is a SKU?

Monday, January 16th, 2012

Picture Frames
I have seen this question from time to time my friends, so here is the answer.

A SKU refers to a Stock Keeping Unit and is unique to the company that issues it. The SKU is then assigned to each individual product.

So for example, let’s say that I make collage picture frames. I have one black picture frame, that holds 5 - 4×6 photos so my SKU for that product would be Blk546 (or any other number I make up).  I have that same picture frame, but in brown. So my SKU for that product would be different, I might use Brn546. This would carry on until individual product has its own unique SKU.

SKU’s assist warehouses in keeping track of their inventory. So knowing the number of SKU’s that each wholesaler has, tells you how much inventory they have.

If you have any additional questions about SKU’s, please ask them below!

Creative Commons License photo credit: ricardodiaz11

Working Within the Process – Setting Up Accounts with Wholesale Suppliers

Wednesday, November 30th, 2011

paperwork
Currently, in our Worldwide Brands Product Sourcing Tool, we list thousands of genuine, verified Drop Ship and Light Bulk Wholesale Suppliers. We’re very proud of those numbers; it took a long time and a great deal of difficult research to get there. That’s more genuine Wholesalers, by far, than are listed in all the other lists and “directories” out there combined. We continue to add new distributors all the time.

However, once in a while we lose a distributor or two as well.

Why? Do they decide they no longer want to sell to home-based business? Do they go out of business? No. They decide that they don’t want to deal with the number of people we send them who do not follow their instructions when setting up a new account!

This can be a bad thing for both of us.

For us, it’s bad because we spend a great deal of time and money researching genuine Wholesalers. We don’t just pull these companies out of a quick trip to a Search Engine, like all the other lists and “directories” on the Internet. As you know from reading our site, we put a great deal of effort into our research, and spend a lot of money on large numbers of “raw leads” that we develop into just a few real Wholesale Suppliers that “make the cut” into our Product Sourcing Tool. We don’t like to lose those companies, but if they tell us to remove them, we remove them.

For you, it’s bad because every Drop Shipper and Light Bulk Wholesaler that drops out of our Tool is a lost opportunity for you. You won’t find most of these companies listed anywhere else, in any other list or “directory”. As I said, we don’t just search the Search Engines. Our “raw leads” are lists of thousands of manufacturers and wholesalers across the USA and around the world. We buy those lists from high-powered Research companies, and then we contact every manufacturer and wholesaler on those lists in order to find out if any of them Drop Ship, sell in Light Bulk Quantities, or will consider doing either or both.

We spend a lot of time, money and effort researching these wholesale suppliers and we love what we do!

The one reason, more than any other by far, that a Wholesale Supplier requests to be removed from our Tool is because they get tired of dealing with people who do not pay attention to their instructions on setting up new Accounts.

Let’s look at it from the Suppliers’ point of view. They think it’s wonderful to be in our Tool. We do not charge them a cent to be listed with us. If we did, there might be many companies who would not be willing to pay a listing fee. We would be short-changing you, our Members, by excluding legitimate Suppliers from our Tool simply out of greed. That’s not the way we operate. We list all qualified, genuine Wholesalers for free.

Again, the Suppliers think that’s great. We get emails and phone calls from them all day long, telling us how wonderful they think our Product Sourcing Tool is for their businesses. However, you have to understand that they are now getting a lot of new Account sign-ups, from our Members.

To the Supplier, that means Paperwork, and sometimes lots of it, depending on how they have their business set up. They all need to know who you are, so they have to process your New Account information. That takes them time. Most of them have to assign you to a specific Sales Rep. More paperwork; more time. Nearly all of them need to get a copy of your Tax ID. More paperwork; more time. After they have your New
Account fully set up and processed, they have a certain amount of time invested in you.

In the reality of the Business World, only about 10% of a Wholesale Supplier’s New Account sign-ups will ever do business with them. We know that a lot of our Members, when they get our Product Sourcing Tool, go a little wild and start signing up for accounts with nearly every Supplier we list!  That’s NEVER our recommendation, but it happens anyway! Those people who sign up for so many Accounts only tend to end up using a small number of them, once they finally decide what they want to sell.

As a result, about 90% of the New Account sign-ups that a Wholesale Supplier gets from our Members end up being unused; that Member will go off and use Accounts they set up with other Suppliers instead.

That, in itself, is not a bad thing. Wholesalers in general are used to this kind of thing. It’s a normal part of the wholesale-retail relationship, and the Wholesalers can handle that. The point at which some Wholesale Suppliers begin to get upset is when some few of our Members don’t bother to follow the Suppliers’ instructions.

I was talking with one of the owners of a Drop Ship wholesale company in our Product Sourcing Tool just a few days ago about this issue. He said that they have a very clear and simple sign-up process outlined on their Web Site, and that they had spent a good deal of money setting up and automating that process. I went to their web site to look at the process myself. It couldn’t have been simpler.

“I get emails all the time from your Members asking about New Accounts”, he said, “and that’s great. I have a standard email I send back, with instructions on how to go to our web site and sign up. But then, many of those people write back, asking more questions about the Account Signup Process. It’s all explained right there on the web site, where I told them to go in the first place. It seems that they just don’t want to take the time to read it. We don’t mind answering calls and emails from our Retailers. That’s part of our Customer Service. But, when we have to take time away from helping our existing Retailers in order to tell someone something that is already very obvious, it gets frustrating”.

“Then”, he went on to say, “we get people who are incredibly impatient. I get phone calls from people who say, ‘I emailed your company three times already about setting up a New Account, and nobody got back to me!’ We know our Customer Service is better than that, so we check our email Inbox. What we find is that they emailed us three times within the past hour, and we just haven’t had time to get back to them yet!”

We then talked about the thing that frustrates him the most. “People just bypass the whole process sometimes”, he said. “We’ll get emails that say ‘my name is Joe Smith, here’s my address, and this is my Tax ID. Set me up a New Account right away’. We simply will not do that, when we have a process already in place that’s designed to save us time, and save them time as well. They can go through the process on our site in just about five minutes, and our Database automatically sets them up with everything they need. We didn’t spend time and money developing that system so that we could go back and manually enter an Account for anyone who doesn’t feel like following our process.”

As you can see, there are reasons for following the processes laid out by the Wholesalers we list in our Product Sourcing Tool. This gentleman was considering asking us to remove his company from our Tool. Of course, we did not want to lose him, so I told him that I would write this article in order to help all of our Members to understand what suppliers like him go through in order to set up new Accounts.

We know that most of our Members do follow the processes that our Wholesalers ask them to. This article isn’t meant to chastise anyone. It’s just meant to help everyone understand these things from the Wholesalers’ point of view. The better you understand the companies you work with, the more successfully you can work with them! :)

So, here’s a quick list of things to remember when signing up for a New Account with a Wholesale Supplier, or with any Service or Supply company you might use in your business:

  • Read the company’s web site before calling or writing with questions. Most of the time the answer is already there for you.
  • Don’t get impatient! In the real business world, things take time. Many companies can set you up with an Account either instantly, or within a day or two. Sometimes it takes a week or two. Again, you’ll usually find Processing Time information right on their web sites.
  • Don’t try to shortcut the process! There are good reasons for the processes that Suppliers use. They generally do not like it when someone tries to “move to the front of the line” by calling or emailing outside of their process.

As I said, these tips work well for any company you work with, not just your Suppliers. You need the goodwill of the people who service and supply your business, so work within their processes, and you’ll find them very easy to work with!

Creative Commons License photo credit: Keith Williamson

Sourcing Liquidations: The Ups and Downs of Reselling Them

Thursday, October 13th, 2011

boxes
Liquidated products are Customer returns and overstocks at retail stores. These types of products can be an excellent channel for acquiring merchandise at rock-bottom prices. Both provide distinct advantages and drawbacks you should consider when deciding which is right for your eBiz:

Customer Returns
Advantages: These tend to be popular, in-vogue products—they were purchased for a reason. Many were returned only because the size, color, or model was wrong, and are in perfect shape.
Drawbacks: You’ll get a higher rate of items cosmetically damaged or defective. Some didn’t work to begin with. Some the customer broke or defaced.

Overstocks
Advantages: Over 90-95% of overstocks should still be in perfect condition. Many are even in their original packaging.
Drawbacks: There wasn’t enough demand for the original retailer to move these items, even at deeply discounted prices. So it might be more difficult for you to sell them as well.

Many resellers feel these are acceptable risks. When you’re buying product pallets for pennies on the dollar, you’ll likely have plenty room for a solid profit. Plus liquidated products are great for loss leaders in your store.

When selling online, it is best to look at all different channels for getting products, drop shipping, buying in bulk and liquidation. All of these channels together can result in a very profitable business.

So how do you find liquidations? In our Product Sourcing Tool at http://www.worldwidebrands.com we have a liquidaiton section, as well as liqudation auctions that you can view and purchase.

Sometimes you can also locate local warehouses that offer liquidated merchandise by the pallet load from local businesses. A simple search in your Yellow Pages would help you find them.

Creative Commons License photo credit: timsamoff

Product Sourcing with a Pro: Expert Answers to 5 Common Questions

Thursday, August 18th, 2011

Every e-biz owner deals with similar Product Sourcing issues. From finding reliable sources to figuring out what will sell, online retailers all face the same challenges. The following are insights on the five most common questions we get from internet sellers:

5 E-Tailer Questions:
Question 1: Isn’t drop-shipping risky—if a supplier turns out to be unreliable, I could have missed deliveries and angry customers?

Answer: No matter where you get your products, running short is always a possibility. You can minimize your risks by following some simple steps:
1.) Place at least one test order with any drop shipper you’re planning to use, to see what your customers will experience in respect to product delivery.
2.) Identify your best-selling items, and buy some in bulk—that way you’ll always have a few on hand, in case your drop shipper runs out of product and can’t fill your order.

Question 2: How do I decide what to sell?

Answer: There’s no short cut—you have to do your market research. Look at the demand for a product, the competition you’ll have, and whether or not you can be profitable. SimpleMarketResearch.com provides a great eBook at other resources to help you create a successful product line.

Question 3: Should I attend wholesale trade shows?

Answer: Trade shows are a good idea, but be careful which ones you attend. Some trade shows are simply glorified flea markets. If you want to do that level of product-sourcing research on your own, we highly recommend going to the bigger shows in and around the major cities.” To find news on upcoming wholesale tradeshows go to www.Tsnn.com. Remember, you’ll typically need your tax ID to register for these shows & sometimes they require a business card.

Question 4: What is a “light bulk wholesaler”?

Answer: A light bulk wholesaler is a term for any wholesaler that will sell in bulk with low minimum orders, under $500, as opposed to carrying minimums of $10,000 and $25,000.

Question 5: Why is importing so complicated and expensive?

Answer: The process is intricate and costly for several reasons:
Your products aren’t made until you order them, so you have to allow 25-30 days just for the goods to be manufactured. On top of that, you can expect to wait 2-3 weeks for shipping, if everything goes smoothly.
There are numerous expenses and paperwork involved with overseas shipping, customs clearances, and warehouse space.
For good solutions and information, check out www.ImportExportHelp.com.

The More You KnowProduct Sourcing with a Pro
As an internet retailer, product sourcing will always be an area of concern, but if you ask questions and seek out the answers, you’ll be much better prepared to prosper. This is the most common point of failure for online businesses. So many people aren’t aware how important research is. Understanding your market is key to your online selling success.

Creative Commons License photo credit: » Zitona «

Trade References

Friday, July 3rd, 2009

When you ask a genuine wholesale supplier for an account with credit terms, the wholesaler typically asks you for Trade References.  When supplying a Trade Reference your provide a telephone (fax or email address) that allows the new wholesale supplier to contact people your have purchased from in the past to determine your payment history and credit worthiness. 

A new business will not have any prior credit history.  You will have to pay up front or using your credit card until you have built up a good credit history with your wholesale supplier.  That wholesale supplier then becomes a Trade Reference for you (provided you have a good payment history with that wholesale supplier.)

What Is Buying At Cost?

Monday, June 29th, 2009

A genuine wholesale supplier might use the term: At Cost.  Do your research carefully on this before you go ahead and buy at cost.  When a wholesale supplier sells ‘at cost,’ it means they are making no profit on the sale since they are selling at the same as it cost them to buy from the manufacturer.

Also, if the wholesale supplier’s customers are NOT buying the product, you may want to check out the demand using your Worldwidebrands.com Product Sourcing Tool before you place any orders.  Unless people want to buy, you may be the next person selling ‘at cost’ or probably much ‘below cost.’

Click to review more of Chris Malta’s “Wholesale Tips”

SKU? It’s Just a Model/Product Number.

Friday, June 26th, 2009

When you deal with genuine wholesale suppliers, you will frequently hear the term: SKU.   A SKU is the unique number a wholesaler assigns to a product type.  It may be a model number or a product number.  If a wholesaler carries 8,000 unique products, in the industry they talk of the wholesale supplier carrying 8,000 SKU’s.

A model with three colors is likely to have three SKUs to identify the product, one SKU for each color.  Note this is not a number that is unique to each product (like your Social Security Number).  It is a number that is unique to each product description.

It’s as simple as that.

Click to review more of Chris Malta’s “Wholesale Tips”

RA or RMA – “Return Authorization” or “Return Merchandise Authorization”

Tuesday, June 23rd, 2009

What is RA?  You need to know the wholesale term, RA or RMA.  Either refers to product returns.  RA means “Return Authorization”.   RMA means “Return Merchandise Authorization”. 

Most wholesale suppliers have a strict process you must use to return any item.  When wanting to return an item, you must contact your wholesale supplier to obtain an RA Number.   The reason for the return may affect the method of return.  The wholesale supplier may set up a UPS or FedEx, pre-paid pick up.   You must clearly mark the RA number on the outside of the return package.  Once the wholesale supplier receives the product, they will pass you a credit. 

The process is similar with wholesale drop shippers.   Your customers must contact you requesting a replacement.  You then contact your wholesale supplier to request an RA and submit a replacement order.   In some cases, the drop shipper will ship the replacement product even before they receive the damaged product.  This saves the customer having to wait for their replacement to arrive.

UPS, United Parcel Service, has some very helpful hints on handling ‘Returns.’  View this UPS video now

Click to review more of Chris Malta’s “Wholesale Tips”