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! 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.  🙂

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