After all, that’s why people go into reselling – to make money! And the bigger the profit margins, the more money you will make. But sometimes it can be tricky to make a healthy profit margin on resale. For instance, if you are trying to find Apple products, like an iPad, to resell then you’ll probably only be able to find this from a wholesaler at marginally less than it’s RRP. Although you’ll probably receive a lot of interest on your advert when you post it (as these are very popular consumer items) you may not have that much opportunity to mark up the price. If you bought it at just below the RRP your opportunity to make money on every unit is low. You’d have to resell a lot of iPads to make a big profit!
So how can you make larger profit margins? Well the main thing is sourcing stock at cheap trade prices. Let’s say you contact a wholesaler and find a product for 50% off its RRP. If you buy in bulk you could potentially double your money in a few days – so the lower the price on purchase, the higher the chance of profit on resale. There are a few other factors too. Here is your guide on how to increase your profit margins:
Buy in Bulk
One of the best ways to increase your profit making opportunities is to buy in bulk. Most wholesalers will require this anyway (not many allow one-off purchases) but showing a wholesaler that you are willing to buy in volume will almost certainly gain you a better deal. If a wholesaler can sell a large amount of stock in one go they are more likely to offer a discount. This discount can sometimes mean you are doubling your profits on resale as opposed to the profit you could make if you were to buy one unit.
Buy Wholesale Pallets
Wholesale pallets are a great way to make more money on resale because they are usually sold off at rock bottom prices. Wholesale pallets normally consist of liquidation items, clearance items or returned goods. The items are all bundled together in a package and sold off for well below their RRP. There are definite bargains to be had here but there’s a reason for that. Most wholesalers will sell off pallets of goods without giving you the chance to open them – so if you buy one of these you might be unable to examine the goods and their condition before purchase. Usually a pallet will have the basic information so you’re not completely left in the dark. You’ll know what type of goods are in there, like electronics, you’ll know whether they are clearance or returned goods, you’ll have an idea of their condition and you’ll know roughly how many products you are buying. But apart from that, you’ll be buying a fairly unknown package which is why the prices are usually so low on these items. It’s a gamble but if you can find one at a very low price it could be worth it – the stock inside could be almost as good as new and there could be some gems in there that will be popular on resale!
Negotiating with wholesalers can be tough but it’s a must if you want to gain the best deals. If you buy a product from a wholesaler at face value then you may get a good deal but if you negotiate with them you will probably get a much better price. To negotiate you need to build rapport – so you may need to have made some repeat purchases with this supplier to have built a buying relationship with them. You should also offer to buy in bulk or mention that you are looking for a regular wholesale supplier to work with – buying in bulk and the opportunity for repeat business are all factors that could make a wholesaler lower their prices. But if you can’t negotiate don’t be disheartened – some wholesalers will have set prices for their products and won’t budge. But it’s worth trying.
List Items Low on Auction
Listing your items on sites like eBay are a great way to get them views and consumer attention. But as there can be a lot of competition on these sites and people looking for bargain deals, it might be tough to gain a high profit margin. But if you try listing your items for a very a competitive price you may end up seeing your profits soar.
When people see a product on an auction site that is listed as almost the same as the RRP they may watch the advert, but they probably won’t be in a desperate rush to outbid competitors because it won’t be seen as much of a ‘bargain’. But if they see a product at well below its RRP they are more likely to keep a keen eye on it and start bidding. What you usually find in situations like this is you have a few people watching the item and starting to increase their bids towards the end of the auction. This can sometimes lead to a bidding war, where a few people try to outbid each other to win the ‘bargain’ item and this can sometimes lead to the sale price of the item increasing at the last minute. The competition and the need to win a bid can also lead to people making rash bids so it could be a tactic that can improve your profit margin. Be wary though, it’s a risk!
And lastly you should never give up. Making profit can be tough and can take a long time so the important thing is to keep trying and persisting – the wholesale forums did a piece on this a while back and the article has some good advice worth noting.