Getting a reselling business up and running comes with fewer responsibilities than manufacturing products on your own. But this does not mean reselling is that much less complicated.
One of the most demanding tasks of this process is making the right decisions when sourcing inventory.
Sourcing inventory for reselling is complicated, and it is one of the most important elements that will dictate success in the industry. Sourcing, marketing, and generating revenue are incredibly tough if you don’t make the correct decisions every step of the way.
If you’ve been struggling with sourcing inventory, you’re in the right place. In this guide, we’ll teach you how to make the best selections when sourcing inventory for reselling.
Let’s get to it!
Inventory Sourcing
Inventory sourcing is a complex task that involves vetting, selecting, and managing suppliers who can provide goods for your business. In this particular case, you need to find partner suppliers for your reselling business.
Now, we know there aren’t shortages in terms of suppliers for buying clearance pallets. But it makes it even more challenging to select the right one.
Why Selecting the Right Supplier Is Important
Partnering with the right supplier makes it easier to deliver high-quality products to your customers. Reliable suppliers stock their products safely and fulfill orders on time, with little to no logistics and delivery issues.
The bottom line is that a reliable supplier will reduce your workload and limit customer complaints. These issues are big reasons why reselling businesses fail to deliver on their brand’s promises.
Make the Right Decisions When Sourcing Inventory for Reselling
Sourcing inventory requires you to work with a third-party supplier that will provide the goods you want to resell. Your supplier is one of the most critical elements that will dictate your future success, so you must make intelligent, practical, and efficient decisions.
To make this aspect of your reselling business easy to handle, follow these tips that will help you choose the best supplier:
1. Consider Your Niche and Business Model
Your niche or chosen business idea should center on a particular product or industry. Your products should be easily sourceable and shippable to limit logistics issues.
Once you know what you want to sell, you will understand the requirements of your business and narrow your list of suppliers.
2. Assess Your Requirements
Once you know what niche you will specialize in, you should consider these important details:
- Customer preferences
- Demand
- Product pricing and profit margin
- Business channel
- Shipping method
- Marketing costs
You must understand the ins and outs of your business to find a reliable supplier that will meet all of your needs.
3. Vendor Analysis and Market Research
Do your due diligence and conduct research on all your potential suppliers. Look for quality vendors and make sure to check these aspects of their work:
- Experience
- Shipping methods
- Communication practices
- Frequency of updates
- Minimum order quantity
- Product quality
- Order fulfillment
- General workflow
- Shipping costs
- Product costs
- Additional costs
- And more
Make sure to look at online reviews for the suppliers you’re interested in.
These details will give you key points to negotiate contract details with your supplier later. You’ll also better understand the potential profit margin to expect and aim for.
4. Study Your Competitors
It is also a smart idea to learn who your competitors are at this point. Look for reselling businesses that cater to the same target audience or sell similar products.
Once you know your competitors, focus on those operating on your scale. Learn as much as possible about what they offer, their inventory sourcing, and their overall business model.
Look at the things your competitors are doing, good and bad. Note down things that work and things that don’t. Do your best to avoid their pain points and expand on their successful methods.
We also suggest noting down features you liked from suppliers that didn’t make the cut. It will help you buy clearance pallets after negotiating for a lower price.
5. Compare and Test Product Standards
Products with common features within the same price range are often of the same quality. However, there may be minor differences that can make a big difference in your customers’ experiences.
Compare products and test products to determine what you want to sell to your customers. Remember that your brand depends on customer satisfaction and reviews.
6. Compare Prices
Product pricing and your contract with your supplier will determine your profit margin. Discuss these details thoroughly with your shortlist of potential partners and decide on the best pricing plan in the long term.
Product pricing is an intricate balance between different factors: acquisition cost, market demand, customer preference, overhead expenses, and more. This is a crucial element of reselling that you should continuously work on and adjust once in a while.
7. Negotiate Contract Terms
At this point, you should be sure of suppliers you can and cannot work with. It’s best to narrow down your list to 2 or 3 excellent options that fit your requirements and pricing range.
If you’re still unsure, try looking at some clauses that could be negotiated in your contracts. If a supplier allows more room for such negotiations, you’ve got your deal!
Our advice? Go with a liquidation marketplace such as Direct Liquidation that is retail-ready and will provide access to top-quality national retailers.
Final Thoughts
In an ever-changing industry, it takes a lot of hard work to generate consistent profits and find success in the long term. You must be dedicated and determined to provide the best products to your consumers and keep up with market trends. Having the right partners alongside you will make this process much more manageable.
These long-term partnerships are necessary for your business’s health in the long run. This is why it’s important to always look for better alternatives for clearance pallets for sale and stick with ones that work for your business.
Do you have your own criteria for sourcing inventory? Let us know!
