What About Rack Jobbing?

Robert at WholesaleU.com has a great post about a form of reselling that I didn’t think was this widespread.? It’s called rack jobbing, and it might be something for you to look into.? And, I couldn’t stop myself from reading it as jack robbing.? Why would I want to be a jack robber???? There! Now you’ll do it too!? Enjoy!? 🙂

Basically, rack jobbing is a relationship between a you and a retailer where you display your goods in their retail location.? The retailer only pays for products sold, and you each benefit with a little profit from each sale.

The only point I disagree with is that he says, “There is no reason for a store owner or manager to turn you down when you offer to place merchandise free of charge. There is no risk involved for him, therefore it is not hard to get you initial accounts setup.”? The next sentence warns that you’ll have to tell the retailer they’re responsible for stolen items.? It’s not the most terrible thing in the world, but it is more merchandise they have to keep from being stolen.? Depending on where you’re placing your products, they might not be used to watching out for thieves.? (ie. hair salon or other service business)? Most businesses should accept your proposition of being a rack jobber, but be prepared to put them at ease over this point.? Also, I want to mention that this policy is very important for you to stick to.? If you don’t hold the retailer responsible for stolen items, they could fudge the sales numbers and report them as stolen, thus shifting profit from your pocket to theirs.

In addition to Robert’s ideas for getting started, here are a few of my own:

  • Sunglasses at hair or nail salons
  • Car accessories at an auto body (tire gauges, air fresheners, etc…)

It was a very interesting article that I hope inspires a few readers to give it a try.? If you do, let us know how it goes.

If you’re looking for some great products to sell as a “rack jobber”, here are a few good sources:
Salehoo.com – Wholesale Supplier Listings and Product Research
Liquidation.com – Wholesale Auctions (Individual pieces to truckloads)
DOBA.com – Drop Shipping Source

Wholesale LCD TV Prices Falling

A warning to anyone preparing to get into the wholesale TV business. The New York Times has an article stating that wholesale TV prices are getting ready for a big drop. Companies have excess inventory and need to make room for new models.

What does this mean for you?

Basically, be very careful if you’re getting ready to buy a lot of LCD TVs. You might get a great price that will turn out to be very high by the time you’re ready to resell them.

They’re also reporting a lower-than-expected demand for LCD TVs. That means, if you have a bunch of TVs that you just bought at too-high-a-price, you’ll probably have trouble moving them. 1. You’ll have to price them higher than your competition because you didn’t wait for the price drop. And 2. Nobody’s buying them anyway. (Not “nobody” but you get the picture. High prices and low demand generally doesn’t work out in the wholesaler’s favor.)

What is Wholesale?

If you’re reading this blog, you may already have a good understanding of what the word “wholesale” means.? However, it seems that more and more people are losing sight of what wholesale really is.

According to the United Nations Statistics Division: “Wholesale is the resale (sale without transformation) of new and used goods to retailers, business-to-business trade, such as to industrial, commercial, institutional or professional users, or resale to other wholesalers, or involves acting as an agent or broker in buying goods for, or selling goods to, such persons or companies.”

Basically, “wholesale” simply means someone buys a product, and without doing anything to the product, sells it to someone else.

Many consumers want to buy products at wholesale prices, but don’t want to bother buying a palette of the product they want.? When I was running SellSunglasses.com, I had a minimum order of 5 dozen pairs.? Regardless of this policy, I would frequently get requests for one dozen or even one pair!? Whether I caved depended on the tone of the request.? Now that I have this wholesale blog, I can explain why the policy existed.

  1. There just wasn’t that much profit in selling one pair or even one dozen pairs of sunglasses.? I offered free shipping, so most of my profit was eaten up by that.? Add in the time to handle the transaction, and it just wasn’t a winning proposition for me.
  2. It’s the wholesale community’s responsibility to not compete with the retail community.? If I sell a real customer 10 dozen pairs of sunglasses, which they hope to sell for $20/pair, how would it look if I started stealing his customers by selling them 12 pairs for $20?

When I started in wholesale, I would tell a potential supplier that I couldn’t buy “a lot” of their product now, but once business picked up, I’d be able to buy “a lot” more.? The reason “a lot” is in quotations is that it’s entirely relative to whomever is saying it.? To me at that time, 100 dozen was “a lot”.? Unfortunately, it wasn’t a lot (yeah, enough with the quotes already), to the suppliers.? In order for me to get wholesale prices, I was going to have to prove that I was buying on a “wholesale” level.? I got a small discount, which was enough to get me started.? As my orders grew, my price went down.? I was moving from retail prices to more “wholesale prices”.

I suppose this blog post can be taken as a warning of what to expect when you’re getting started.? You can’t just call a wholesaler out of the blue and expect to get their rock-bottom prices, unless you’re willing to plop down a stack of cash for a boatload of merchandise.? You’ll need to prove that you can move a substantial amount of product before they’ll consider you a genuine customer.? Substantial is another one of those relative words.? You’ll need to figure out what that means to you as well as to your supplier.

Here are your takeaways:

  • Wholesale is simply the buying and selling of goods.
  • When buying a small quantity of products, don’t expect “wholesale prices”.
  • If you want wholesale prices, be prepared to spend “a lot” to achieve the desired discount.

Good luck, and now if you have a customer ask what your wholesale price is for one item, you can roll your eyes and smile.? 🙂

Highest Wholesale Prices in 27 Years

According to CNN Money, “The Labor Department reports that its Producer Price Index increased by 1.2% in July and by 9.8% in the past year.”? The annual Producer Price Index for finished goods rose almost 10 percent in the 12 months that ended in July.

How are the concerns about inflation and recession affecting your decisions to make money online?? Are you more motivated to build a second income, or does the fear have you tightening your pocketbook too much to invest in such endeavors?

In my opinion, we need to continue pushing ahead.? The economy will rise and fall, but at a very micro level, we each control our own finances.? Sure, a bad economy might make it difficult to get financing or reduce the amount of discretionary income you have to “gamble” with.? If you’re looking for excuses, there are plenty.? However, if you want to succeed, YOU need to take the steps yourself.? Now is not the time to cut back on advertising.? If you have an advertising system that’s providing decent returns, Google AdWords for example, you need to stay at your current level or INCREASE your ad spend.? If you’re getting a positive ROI on your advertising, more money out means more money back to you.

Now don’t be afraid.? The economy, especially the media’s depiction of the economy, can be scary, but if you want to be successful, you need to remember one thing.? The economy works on averages.? The truly successful people in this world aren’t hurting like the average people are.

Review of WholesaleCentral.com

WholesaleCentral.com is basically a directory of wholesale suppliers and products. You are also able to use their “Wholesale Power Search” feature to search the site for specific wholesale products. For a fee, you can list your items in their directory, currently $299 for 6 months. Overall, this is a good place to start if you’re trying to find your place in the wholesale market. Also, if you’ve ever searched for the term “wholesale” you’ve probably seen their site before.

When I started selling wholesale merchandise, WholesaleCentral was a great resource for me. The directory is clearly laid out, and the Wholesale Power Search actually returns mostly relevant results. It was good for researching potential products to sell. You can easily zip through and compare several wholesale sources before deciding who has the best price and terms.

Once you have a supplier, be it from WholesaleCentral or another source, you probably want to start selling those items to make some money. Once you’re ready to go, you can sign up to sell your items on their site. If you have an acceptable profit margin, and can actually make a few sales per month, the $299 fee really isn’t that bad. Over 6 months, it’s only $50/mo. If you’re not making $50 per month in sales, you need to rethink your offering, or ramp up your marketing and advertising.


This isn’t a paid ad of any kind. It’s an honest review of WholesaleCentral.com. When I used their services in the past, I truly got results. The additional sales I received because of my listing with them paid for the fee many times over. I encourage you to do your own due diligence, but SellWholesale.com officially endorses WholesaleCentral.com.

"How to Run a Wholesale Business at a Profit" – Book Review

Wholesale Book Cover
Wholesale Book Cover

I recently found “How to Run a Wholesale Business at a Profit : Plans and Methods for Cutting Down Expenses and Increasing Sales–Helpful, Comparative Cost-Of-Doing-Business Figures Based on a National Investigation Made by the Bureau of Business Standards” on Google Books.? You may find the information a little dated, being that the book was published 90 years ago (1918).? However, there are still plenty of principles that can be put to use today.

First, here are the technical details of the book:
By: A.W. Shaw Company
Published: 1918 by the A.W. Shaw Company
222 Pages

Contents:

Part 1: Selling Methods That Have Beaten Rising Costs

  • Chapter 1: How Fast Are Wholesalers’ Costs Rising?
  • Chapter 2: The First Step in Overcoming Rising Costs
  • Chapter 3: Is There a One Best Way to Pay Salesmen?
  • Chapter 4: Fixing Profitable Sales Quotas That Stimulate
  • Chapter 5: Getting the Sales Force Ready to Go “Over The Top”
  • Chapter 6: How to Advertise to Win
  • Chapter 7: Direct Advertising That Hits Its Mark

Part 2: Keeping Overhead Expenses Down

  • Chapter 8: Plugging Little Leaks May Save Big Losses
  • Chapter 9: Cutting Down on Wasted Labor
  • Chapter 10: Ways to Speed Up the Shipping Room
  • Chapter 11: Saving Money in Handling Stock
  • Chapter 12: How Better Buildings Lower Costs
  • Chapter 13: What Should Heat, Light, Power, Insurance, and Taxes Cost?

Part 3: Can Profits be Maintained Despite Higher Costs

  • Chapter 14: Can Bad Debts Be Made “Good”?
  • Chapter 15: What About Local Deliveries?
  • Chapter 16: Equipment That Helps Pay Dividends
  • Chapter 17: Making Your Dollars Work Faster

Part 4: Actual Cost Figures That Will Help You Win Out

And of course, the Index.

This book is great for a historical look on the wholesale industry.? At its core, the book is full of principles that will help you run and optimize any business.? If you’re new to wholesale, or business in general, or if you’re tired of reading hype-filled “start your own business now!!!” books, this is a refreshing look at how our ancestors did business nearly one hundred years ago.? If you want to do the math, any dollar figures in the book can be multiplied by about 16 to represent 2008 dollars.

For those that missed it at the top, here’s another link to Google Books where I discovered this unique look at wholesale businesses of the past.

http://books.google.com/books?id=LN8cAAAAMAAJ&printsec=frontcover

Let me know what you think by leaving a comment.

– Jason Green
SellWholesale.com