The Profitability of Wholesale Products | The fundamental aim of starting a business is to make a profit, but once the seed idea of the business is fleshed out, how exactly does an organization maximize profits and turn a great idea into a going concern?
To some who don’t plan in advance, this not only remains a mystery but is also likely the reason for the failure of their new business like sepstream.com.
But to those who create and follow a robust business plan, an idea with tremendous potential can be grown into a profitable venture for years to come.
One of the cornerstones of the consumer retail business model – bricks and mortar, online or both – is choosing the right products from the outset.
This is where wholesale products fit into the consumer retail business model.
In this article we’ll be discussing the criteria for sourcing profitable wholesale products from OEM (original equipment manufacturers) and then move on to looking into some of the evergreen products that are all but guaranteed to help your new business create sustainable profit, year-on-year.
Ways to Analyze Whether a Wholesale Product is Profitable or Not:
For the purposes of this article, we’re going to focus on OEM wholesale products from China.
There are three fundamental things to take into account when analyzing the long-term viability and potential upside of a product.
Buying an existing product direct from a Chinese manufacturer in a non-exclusive bulk or wholesale agreement is one of the most profitable and scalable business models available to entrepreneurs looking to launch a new brand.
The Manufacturer has already completed the R&D (research & development) of the product, a stage of the process that is hugely time and resource-intensive – bottom line, they’ve already done this, so you don’t have to.
They have a proven product available to ship and ready for you to buy in bulk at a discount to sell on to your customers – regardless of which sales channel you are using, Amazon FBA for example.