Thread: Starting My Business

Buying in large volumes will always get you a much profitable price than drop shipping, but drop shipping is very low risk, where as buying in bulk is high risk, especially if you have no idea about the market.

Originally Posted by Digital Me

Do I go with what I personally love or do I try to keep up with trends?

What You Like: If you are in business for the long haul we would recommend to go for what you love. Selling what you love means that you already have knowledge of the product, you will be enthusiastic about selling it even after the novelty of selling wears off, and in time you will be able to build a competitive advantage that few competitors will be able to match (in the form of efficiencies in your business logistics, profound knowledge of your product ranges, high customer loyalty, etc).

Also when you sell what you love you start building a niche that you can then choose to expand vertically or horizontally (vertical expansion is when, for example, you started selling fishing tackle and you decide to expand by also selling fishing reels, fishing bags, fishing clothing etc; horizontal expansion is when, for example, you started selling fishing tackle for carps and you decide to expand by also selling fishing tackle for trouts).

By narrowing down your market you create efficiencies in your business which reduce your costs, and also you create loyalty with your customers because they see you as an expert source in your field. This in turn means that you will get more repeat orders (it is much more costly to acquire a customer for the first time than to get an existing customer to purchase again).



What Others Like: If however you want to make a quick buck, then go for the high demand items. Just make sure you know that with the high demand associated with hot items you will have to offset against the following:

1. High return = High risk: because hot items are in such high demand, there are far more scammers supplying fake in demand items than niche items.

2. High demand = High competition: items that are in high demand attract a lot of competition. This means that, while the quantities you will sell may be higher, your profit margins are likely to be tighter. Also high competition means that wholesale prices for high demand products change very often: this factor could leave you with stock that you purchased at a much higher price than your competition.

Take for example the Wii consoles back in September 2008. Demand was skyrocketing and resellers were willing to purchase Wii units at any price, just because Nintendo did not produce enough units and buyers were willing to pay almost any price. However if you were left with unsold Wii units in 2009 you would have found that the price has been decreasing constantly, which could have resulted in a loss to you. Another example is USB sticks and RAM memory, prices fluctuate constantly.

If you can anticipate these price fluctuations and buy when prices are low and sell when retail prices are high, it can be a profitable option (known as arbitrage), although it still carries high levels of risk.



Whether you choose hot selling items or niche items, just be sure you have evaluated all the risks and that you decide to sell goods you are comfortable with for the long run.

WholesaleForum.com Admin

I would do both. That way you can mix the two together and get some sort of Ménage à trois going on.

Here's something to think about.

1.) Female demographic sales are 2:1, women just have a knack for buying more clothes.
2.) Starting small at your local flea market will give you a better perspective of your market.

RESEARCH! RESEARCH!! RESEARCH!!!

The most important thing is to conduct research before buying, don't just look at how much you will save off the RRP, but find out how many people are selling that item and at what price.

Originally Posted by EnternationalTrader

RESEARCH! RESEARCH!! RESEARCH!!!

The most important thing is to conduct research before buying, don't just look at how much you will save off the RRP, but find out how many people are selling that item and at what price.

Well said, also the level of demand. Check out http://www.wholesaleforum.com/produc...rch-tools.html for a list of the most powerful online market research tools available today.

One thing I have learned is that women indeed buy more than their men counterparts, but that doesn't mean stay away from products geared toward men. You can sell products that are to be used for men, but market them towards women.