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Faizan
Manufacturers sometimes sell their products in bulk at prices far below what they would charge for just one or two of the same item. However, depending on what you buy and where you have to go to get it, keeping the benefit of your discount is as much an issue as getting it in the first place. Shipping, inspections, permits and potential penalties could erase your discount and then some if you don't know what you're doing.
Step 1
Decide what you want to buy. If you're buying in bulk, chances are you intend to resell the items either in a brick and mortar store or in a virtual store within communities such as Amazon or Ebay. The product you choose must have a market, but you also must be able to find a reliable and legal source of supply from a manufacturer that offers bulk discounts a rates that allow you a resale profit. You also may need the help of other retailers willing to split the cost with you if you're a startup or not confident you can sell enough on your own yet.
Step 2
Select a manufacturer of your chosen product. The choice of manufacturer is where your greatest risk lies. Buying from a manufacturer located within the United States keeps you from becoming an importer, but may not provide the greatest discounts.
Locating Domestic Manufacturers
Search the Internet for U.S. manufacturers of your product. The traditional go-to resource for manufacturers, the Thomas Register of American Manufacturers, is now online as ThomasNet. Trade shows and trade publications also can provide leads to manufacturers of your chosen product.
Locating Foreign Manufacturers
Log on to a collective foreign manufacturer's site to find what you're looking for. Foreign manufacturers are becoming increasingly accessible via sites such as Alibaba. However, buying from these manufacturers makes you an importer, which means you must understand federal and local taxes on imports and the process required for clearing a shipment through customs. You'll also need to understand individual product quotas and be prepared to pay to store your shipments if they enter the country at a time when quotas for that product are exhausted. Even the shipping costs can be an issue if they are heavy enough to cancel out even part of your discount. The United States Customs and Border Protection site has numerous publications to help educate you on these issues.
Step 3
Negotiate a bulk purchase discount. This may require you understand how high you can price your product and still sell it, then calculate exactly how much profit you want to make off of each sale. These calculations will reveal what you can pay for each item in a bulk purchase deal and still have the desired impact on your bottom line. Ask the manufacturer how much of your desired product you have to buy to get your target purchase price per item.
Step 4
Finalize a purchase agreement with your chosen manufacturer. Memorialize the number of items and price per item for your bulk discount in this agreement, but also address the other issues that could erode or eradicate your discount savings, such as shipping costs, guarantees on order processing and shipping schedules, as well as the time frames and costs of returns.
Step 1Decide what you want to buy. If you're buying in bulk, chances are you intend to resell the items either in a brick and mortar store or in a virtual store within communities such as Amazon or Ebay. The product you choose must have a market, but you also must be able to find a reliable and legal source of supply from a manufacturer that offers bulk discounts a rates that allow you a resale profit. You also may need the help of other retailers willing to split the cost with you if you're a startup or not confident you can sell enough on your own yet.
Step 2
Select a manufacturer of your chosen product. The choice of manufacturer is where your greatest risk lies. Buying from a manufacturer located within the United States keeps you from becoming an importer, but may not provide the greatest discounts.
Locating Domestic Manufacturers
Search the Internet for U.S. manufacturers of your product. The traditional go-to resource for manufacturers, the Thomas Register of American Manufacturers, is now online as ThomasNet. Trade shows and trade publications also can provide leads to manufacturers of your chosen product.
Locating Foreign Manufacturers
Log on to a collective foreign manufacturer's site to find what you're looking for. Foreign manufacturers are becoming increasingly accessible via sites such as Alibaba. However, buying from these manufacturers makes you an importer, which means you must understand federal and local taxes on imports and the process required for clearing a shipment through customs. You'll also need to understand individual product quotas and be prepared to pay to store your shipments if they enter the country at a time when quotas for that product are exhausted. Even the shipping costs can be an issue if they are heavy enough to cancel out even part of your discount. The United States Customs and Border Protection site has numerous publications to help educate you on these issues.
Step 3
Negotiate a bulk purchase discount. This may require you understand how high you can price your product and still sell it, then calculate exactly how much profit you want to make off of each sale. These calculations will reveal what you can pay for each item in a bulk purchase deal and still have the desired impact on your bottom line. Ask the manufacturer how much of your desired product you have to buy to get your target purchase price per item.
Step 4
Finalize a purchase agreement with your chosen manufacturer. Memorialize the number of items and price per item for your bulk discount in this agreement, but also address the other issues that could erode or eradicate your discount savings, such as shipping costs, guarantees on order processing and shipping schedules, as well as the time frames and costs of returns.
Posted in: Products & Brands
