Scoring cheap wholesale products for resale is a surefire way to increase the profits of your reselling business.
However, finding cheap wholesale products is more challenging than it seems. After all, you still need to market and sell high-quality products, which cannot be acquired at truly rock-bottom prices.
This is why it is important to estimate the profitability of certain products and work from there. This is a long process involving finding wholesale items, calculating their ideal selling price, understanding profit margins, and more.
Learning how to identify profitable wholesale products at a glance can be difficult. It is the expertise that takes years to truly develop and sharpen.
This guide aims to help all types of resellers and retainers with this. Keep reading to learn some easy ways to find profitable wholesale products for resale.
How to Find Profitable Wholesale Products for Resale
Finding profitable wholesale products is all about picking the items that will make you the most profit upon resale. And this can be done by reviewing the following factors when you're considering a wholesale order:
1. Buy Products With the Potential for High Profit Margins
Profit margin is the measure of profitability for a business from its activities. It is calculated as the percentage of profit generated for every dollar of sale. It is often referred to as the Return on Investment (ROI).
The lower the price of the goods, the higher the profits earned after selling them at a markup. The bigger this difference is, the higher your business's profit margin.
No matter what industry you're operating in, you can only bump your selling price up to a certain limit. And on the other hand, you need to calculate non-negotiable investments in sourcing, shipping, packaging, and delivering the products to the final consumer, which further increases costs.
This is why a lower purchase point is a good deal when buying wholesale, with the ideal profit margin between 10% and 20%. According to a 2022 analysis of profit margins by sector, net margins range between -28.56% (hotel/gaming) and 32.61% (bank/money center).
So when comparing wholesale products, do a quick profit margin calculation.
Place bulk orders by truckloads to get discounts from your supplier and a lower cost per unit. Additionally, higher order quantities are often accompanied by free shipping.
2. Select Products With Mid-Range Pricing
Finding profitable wholesale products centers on the sales element of business operations—you must find items you can easily sell. Such products are easily identified by their selling price range, which is the price at which a product can be sold in the retail or resale market.
A low-price range product, such as a pen, can be easy to sell and give you a good profit margin. But the price of each unit is too low for you to make significant earnings unless you sell hundreds or thousands of them.
In contrast, a premium price range can generate high profits from selling a small number of units. However, selling premium products requires more aggressive marketing and time.
This is where products with mid-range pricing shine. They are relatively affordable, so they don't need much marketing, and the profits can be substantial even if you sell a reasonable number of units.
Mid-range pricing includes product units that demand a selling price between $15 and $200.
3. Pick Niche Industries/Products With Low Competition
Some industries, such as consumer electronics, can have too many competitors selling the same goods to the same market. This means your business will have to provide competitive pricing for a smaller set of units sold, reducing net profits.
A niche like refurbished electronic wholesale is much less saturated. So your business can enjoy a higher market share without sacrificing profit margins.
4. Pick Popular Products With a Strong Demand
Products with a strong or growing demand are easier to sell and will give you scope for higher profits. They're also hot sellers that sell for low prices on the wholesale market.
Niche products with limited demand can be difficult to sell. This is why it is crucial to do your due diligence and study the demand for the product you want to sell. And one easy way to gauge demand for your products is by searching for live ad campaigns on Meta Ad Library.
The Meta Ad Library tells you what ads are running across all Meta technologies. You can access metrics on demographic reach, category filters, ad funding, and more, to gauge the demand for a product.
Other tools for product research include:
5. Choose Durable, Easy-To-Ship Products
Shipping costs make up the next big expense in securing wholesale products. And the harder the products are to ship, the higher their shipping costs, regardless of the distance.
This is where easy-to-ship products make their winning case—they are durable, small-sized, and lightweight. You can get them for a smaller shipping fee and risk less damage to the products while in transit and storage.
Since the products are durable, they'll also attract lower warehouse, storage, and delivery costs, thus increasing your scope for a higher profit margin.
6. Look for Evergreen Products
Evergreen products are items that have a consistent market demand throughout the year. This definition is in contrast to seasonal products that sell only before or during certain times of the year.
Due to their consistent demand, evergreen products often come at much lower wholesale prices than seasonal goods. And since these products attract a consistent demand regardless of changes in market factors, they should guarantee steady revenue for your business.
You can easily offload evergreen products compared, so you won't be stuck with units occupying precious warehouse space for a long time. And you don't have to ramp up seasonal or special advertising endeavors to promote them either.
In the electronics market, evergreen products include mobile phones, refrigerators, washing machines, earphones, computers, etc.
To Sum It Up
This concludes our list of ways to find the most profitable wholesale products for resale. We hope our guide will give direction to your sourcing process and make it more efficient and profitable.