Online retail sales growth is trouncing the growth of traditional retail sales.
One analysis of U.S. Commerce Department data shows that online sales grew by 15 percent, up to $517 billion, year over year in 2018.
By comparison, traditional retail sales only grew about 4 percent.
But hanging your online shingle isn't good enough when chasing a cut of the e-commerce boom.
Online retailers need to scale up quickly, get on to buying wholesale and moving that product ASAP.
Here are five other things to remember when buying wholesale.
1. Make Sure You Have the Basics in Order
Several basic business requirements need to line up to make your business work: getting a federal tax ID, state tax license, a registered corporation, and online payment and bookkeeping systems.
If anyone of these things hit a snag, a business could suffer unnecessary damage. For example, without the proper documentation, businesses could unnecessarily pay the retail tax on otherwise exempt items. You could also inadvertently collect a tax on products without state authority.
Also, it's 2019. Everything should be done online and digitally so that the function of buying wholesale is as easy as a few clicks or keystrokes.
2. What's Worth Buying Wholesale?
Take the thinking back to this: PROFIT = SALES - EXPENSES. And selling on Amazon isn't free. The lowest costs for storing, picking, packing, and shipping are for small items that don't take up a lot of space and don't weigh very much.
See Amazon's pricing page for the specifics.
But FBA Fox users can get help on this front by getting an early look at winning items here.
3. Centralize What You Can
Everything is at scale with wholesale, but that doesn't mean that the process of buying inventory and getting it to Amazon fulfillment centers has to be a big problem.
Once you purchase a bulk order, then what? You have (maybe literally) a ton of stuff to ship. Click here to see how the FBA Fox process works.
4. The Price Is Right?
Wholesale purchasing questions should be informed by how much you want to sell and make off of each sale. Nearly everyone online shopper will compare prices for the same or similar products because shopping is now a matter of keystrokes and clicking a mouse or trackpad — you used to have to go to stores to compare prices.
Further, retailers had the benefit of store location and local scarcity to help set higher prices. Everything is nearby online.
There is a whole body of science out there dedicated to pricing. At a basic level, start by identifying your competition and how they price products as comprehensively as you can.
5. Don't Get Whacked by Seasonality
There is a time and a season for everything. People don't want reindeer tchotchkes in May. What you buy today based on today's demands and trends might not line up with tomorrow's demand.
Luckily, a lot of seasonality is predictable but varies for different locales and populations.
Do It All in One Place
Selling online and buying wholesale is just as much about the hard work and drive as it is technology and data.
Help us help you simplify the hard work partly by putting over 500,000 items from wholesalers at your fingertips and taking care of getting products to FBA centers.
Register today and worry about one less thing.