Misconception about Middlemen/Manufacturers
There are several distinct types of wholesalers or distributors and each one has it's unique place in the market.*Depending on your circumstances and what your goals are you can just one type or a mix of them.
First there is the manufactuer of the product.*This the organization that actually create the*merchandise that is to be sold.*However, most manufactuers especially large ones do not deal with small businesses directly unless buying in large quantities.*They use a distributor or middle man to sell their products. If find a manufacturer that is willing to sell individual items and ship for you.*You hit a gold mine!*In reality most do not. So almost always you have to deal with a distributor.
Second there is the distributor.*These are the guys that buy from the manufactuer in large quantities and*add on a small percentage to the price.*They will sell the products in a smaller volume.*For example: The manufacturer sells 5000 watches to the distributor for 15 dollars a watch. He will then sell in quantities of 250 at a price of 23 dollars apiece.*If you*have that kind of money and storage then these are the ones you want to deal with.*Alot of times you can contact the brand such as Microsoft and ask them who there distributor is.*They normally give item discounts the larger the purchase volume.
Third there is the wholesaler/dropshipper(middle man)- The wholesaler and dropshipper*are sometimes one in the same.*Some*companies are strickly wholesale and buy in a light bulk from different distributors and sell them*after they tack on their percentage.*Remember those watches , well the wholesaler will sell them to you for 30 dollars a piece and maybe dropship it fot you or with a minimum order of 10 watches at*26 dollars apiece. It seems everyone wants to make a little money.
Forth there is closeout/liquidation - There are items that large retail chains pulled for some reason such as seasonal items, store returns, overstocked, etc. You normally buy these items by the box, pallet, or truckload. You normally can get pretty good deals on these items but there is the risk of not knowing what you are getting.*Always see if the pallets are manifested.
Lastly there are Trade Forums - this is where you can list what items you are looking for and wholesalers, distributors, and sometimes manufacturers will contact you.*
Almost forgot about these - This is informational products. The neat thing about these is that there is a onetime cost to obtain these items such as ebooks, software, and graphics and then you can turn around and resell the product as often as you like. You can just send a link to the file or send it in an email.
I personally have added these to suppliment my hardgoods. If anyone is interested I can hook you up.
So depending on your circumstances and goals you will need to decide on your suppliers. For example, say you have 10 good ole american dollars to kick off your dream of financial freedom. You are somewhat limited to the types of suppliers you can use. You most likely will need the services of a dropshipper/wholesaler. They will get a small cut of the sale but you are not having to worry about buying in bulk and having your money tied up in a bunch of items. You are also not having to store anything and fill your garage full of items.
If you have some money to invest in your business I would still suggest using a bulk supplier or overstock supplier.
I know this was long winded but I just wanted to shed some light on why using a middle man is not all that bad especially if you are on a tight to no budget.
Good luck and God Bless.
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