Just a few questions I'd like to pose:

1. What are the benefits of bulk-buying and what are the main pitfalls?

2. When negotiating with suppliers, how significant is quantity when determining a price?

... and finally,

3. In your experience, do smaller businesses enter into long-term contracts with particular supplier, or do businesses frequently research, compare and shop around for better deals.

Thanks in advance of your forthcoming pearls of wisdom.

Hi Samhol,

Welcome to Wholesale Forum

Quote:

1. What are the benefits of bulk-buying and what are the main pitfalls?

Some of the benefits of buying in bulk include:

- Substantial discounts per unit, which means a higher profit margin for you
- Knowing exactly how much inventory you have in stock
- The ability to add your own marketing materials (deals, coupons, promo codes, etc.) inside packages
- Being able to guarantee accurate shipping times

On the other hand, there are some drawbacks when it comes to buying in bulk that you have to factor in. For example, the power to be in control of most things will come at a price (time/money). This means you�re going to need room to warehouse your goods, track inventory, cover shipping costs, etc. The biggest disadvantage would have to be not selling anything. Most businesses go bankrupt when they put all their eggs in a single basket that doesn�t pump out at least a few clucks or shall I say bucks.

Quote:

2. When negotiating with suppliers, how significant is quantity when determining a price?

Quantity is very important when it comes to price breaks. For example, you need to know how much you want when you�re negotiating with a supplier. Prices will range greatly from the minimum order quantity (MOQ), to orders that are much more than that. So before anything else, always ask for their MOQ price, and from there you can begin the process of negotiating a better price for the quantities you need. The more you can buy, the more power you have.

Quote:

3. In your experience, do smaller businesses enter into long-term contracts with particular supplier, or do businesses frequently research, compare and shop around for better deals.

From our collective experience, we believe most small businesses out there benefit greatly from long-term contracts since they spend less time drumming up more business and more time working on the business. But most importantly, it means honing your system(s) down to prepare for new work in an well-ordered, repeatable routine that benefits all.

Hope this helps