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As most of you know, I have worked with wholesalers both on and offline for many years and a number of my websites are based around helping people find and trade with wholesale suppliers.

I receive a fairly constant stream of emails from customers and potential customers asking various questions about buying from wholesalers and this has been the case for the past few years. These questions always increase in volume around this time of the year as people try and grasp a bit of buying madness that surrounds Christmas. In view of this, I would like to throw a few do's and don'ts out there which will benefit anyone new to trading.....

1. One of the most common 'gripes' I get from people is that they can't find low prices for popular products online. It never ceases to amaze me how little effort some people want to put into making money....

The fact is that it is highly unlikely that you will find the best prices for the majority of products online - this is especially the case in the UK as many of the larger wholesalers don't even have websites. More often than not, an online wholesaler is merely someone that has gone to an offline wholesaler and purchased a load of stock to mark up and offer to online buyers. If the wholesaler you are buying from online doesn't have a trade warehouse or premises that you can visit and purchase from, there is every possibility that they are not a wholesaler at all but simply a middleman.

Cut out the middleman and pick up the phone or better still, visit prospective suppliers and build a relationship with them. Buying wholesale stock online may be convenient but in most cases you won't be getting the best deal and you may also be missing out on additional stock that isn't advertised online. Note that this isn't so much the case in the US where many big wholesalers do have excellent online 'warehouses' - we are yet to catch up in the UK :-(

2. eBay is an excellent venue for buyers and sellers BUT it is also the biggest marketplace in the World. This means that if you want to sell there, you will be in competition with some of the largest traders in the World. Don't be surprised if you can buy products cheaper on eBay than you can from your local wholesaler. Chances are that the seller has negotiated a massive discount for buying in huge bulk or they may even be importing the products themselves (or using their buying power to source direct from the manufacturer). Unless you are in the position of being able to buy in similar quantities, you simply won't be able to compete on a like for like basis with many popular product lines.

3. People often email me asking where they can find a wholesaler for a really specific, niche item (for example horse-riding saddles). With something so specific, it is highly unlikely that you will find an individual wholesaler that deals solely in that product. Often time it will be necessary to make your wholesale purchases direct from the manufacturer. Therefore, if you are having trouble locating a supplier for a particular item, don't be afraid to pick up the telephone to the manufacturer and simply ask them who their main distributors are.

4. I've said it so many times before but I still get emails about this one - avoid products such as DVDs, computer games, electrical goods etc like the plague. The profit margin is tiny and you won't be able to compete with the bigger sellers. I don't know how much clearer I can make it - unless you want to work for peanuts, just steer clear of these products. The only exception is if you can add value in some way and differentiate yourself from the other larger sellers.

5. Remember too that if you are struggling to find a product at a particular price, there is every possibility that what you are looking for just doesn't exist. I have lost count of the number of times people have emailed me asking where they can buy 'product A for 'x each' and when I have asked them why they think they should be able to buy it at that price, they reply that 'it sounds about the right sort of price for a wholesale purchase'!! Seriously - they have just made up the figure in their head that they 'think' they should be able to buy at!! Usually in these situations, the figure is wayyyy off.....

6. As with everything, buying and selling products takes a bit of effort (in fact, it can often take a lot of effort) but those willing to put the work in are the ones that benefit financially.

If you want to sit at home and buy stock online to resell on eBay, then don't be surprised if you find yourself working hard for minimal profits. If however you are prepared to visit a few wholesalers, check out the latest stock as it arrives, build up a relationship and negotiate a great deal with your new business partner, then you have every right to expect to see a good return on your investments....

Copyright 2005 Richard Grady