Bulk Purchasing for Maximum Profit on the Market Stall
When purchasing your items for selling on the market stall you will eventually need to consider Bulk Purchasing. Even the process of hand making items will, at some point, cause you to consider the bulk purchase as a necessary cost factor.
So what is bulk purchasing, chasing the ‘best’ deal and should you do it?
Bulk Purchasing Defined
Wikipedia has this simple definition:
Bulk purchasing is the purchase of much larger quantities than the usual, for a unit price that is lower than the usual.
Simply explained, when you go to a store and buy one roll of toilet paper it is at a higher price than if you buy the same toilet roll in a pack of twelve.
In other words, selling something at an individual price costs more, which is what you are doing on your market stall. You are selling one individual item to your customers for a higher price than you bought it.
The Rule
The rule here is very simple
Buy low, sell high
That’s all you have to remember when it comes to choosing your products. Obviously there are a few other recommendations to ensure you are providing the best service possible but generally this is the rule you need to follow.
EXAMPLE TIME
If I wish to make a profit I need to source goods that are lower priced and be able to sell them at a higher price. If I choose to sell vegetables then I need to get those vegetables at a price that I can sell for a higher price.
If I go to a supermarket and buy 12 cauliflowers at £1.00 a cauliflower, that is £12.00 I need to first pay out. Then I need to sell those same cauliflowers at my market stall. I could sell them for £1.25 each. At the end of the day my profit would be £3.00 on 12 cauliflowers assuming I sold them all.
If I use the rule above, then it would be better for me to visit a fruit and veg wholesaler and buy a box of cauliflowers for £5.00. In the box are 12 cauliflowers. You take them to market and sell each cauliflower for £1.25 again. Now you will have made £10.00 profit all because you sourced your products from a wholesaler.
The above example could be taken even further. You could think about visiting a farm and buying direct from the farmer. He may sell 12 cauliflowers to you for £2.00 and your profit would go up again. The only consideration here is convenience.
Convenience
This is what needs to be considered with every purchase you make. As a market stall trader you are making it convenient for customers to buy products from one location. A wholesaler, makes it easy for traders to bulk purchase. The source of the product is normally the cheapest, but may located many miles away from your location.
Everyone needs to make a profit on what they sell, or else there is no point being in business and you wouldn’t have a roof over your head or food on your table. The ‘middleman’ is creating a stop gap between producer and customer. Therefore it is reasonable for someone to want to ask for some profit on what they have in bulk.
How you arrive at a figure both you and the ‘middleman’ are happy with, will depend on the effort that has gone into the transaction. Don’t neglect the fact you can buy wholesale today and sell the product today! That is speed. The wholesaler, on the other hand, may have made arrangements many months before to have the products today for you to purchase so consider the effort, storage and planning cost involved.
Time is precious!
The only thing you have less and less of each day is time! So make each moment count! If you can buy fresh produce for only slightly more from a wholesaler, than you would if you drove 200 miles to the farm, pay the additional charge!
There will be less wear and tear on your vehicle, you will have more time to sell or find better deals, and you can develop your growing business to source cheaper goods when you have the flexibility to do so.
If you think growing your own vegetables is the cheapest option, it probably is, but you will have to wait for a few months, will have to layout on equipment and, should your crop fail, you will be left with nothing.
Going for the cheapest option is the goal, but consider your time too.
Factor in your costs
Keep a focus on what your outlay is all the time. That needs to be added to your markup on every item you sell!
Remember the rent for the pitch, your stall/gazebo, table and stretch tablecloth. Wrapping goods, bags and boxes. Your fuel in the car and then the products themselves. All that needs to be broken down to be able to pay for everything you have and to still make a profit!
Don’t forget that the lowest you can sell something for is your final asking price. Anything below means you are making a loss overall.
As the saying goes:
If you are always a penny above, you will never be in debt, but just a penny below and you will always be in debt.
Wholesalers
There are a number of places to buy items from. If you find someone online selling an item you like, email them directly to ask for a BULK purchase price. You will be surprised at what you receive back!
You could visit Etsy and look at what handmade products are on offer. Amazon offers free shipping over a certain price for most items, use that to ensure you have stock available.
Don’t forget The Trader or Alibaba for bulk purchases. These are excellent sites to get your products from. Note, check the quantities, and delivery dates though. Some could be 2 – 8 week delivery times and you would need to plan for this in your sales timetable.
For fresh produce, visit your nearest fresh fruit and vegetable market. You can also make arrangements with online wholesalers on a ‘cash on delivery‘ basis. Remember to store your food appropriately and avoid contamination!
Quality
We have left this final item to last because this, we think, is the main reason of starting and running a business. As a business owner you want to provide quality to your customer, as a customer you want to receive the best quality product for the money you spend.
If I spend 10 pence on a mobile phone charger and it blows up, why would I expect to sell that same charger to someone else for £2.00 and have it blow up on them. First they will come back and return the item, AND, more importantly, they will tell everyone that you sell cheap, low quality products and your sales will drop!
Buy the best you can for what you are selling. I don’t mean buying a gold plated turnip, but rather buy fresh turnips for a few pounds more than the nearly out-of-date turnips that will result in a poor quality product for your customers.
If you offer a wrapping service, put good paper on the item and rather charge an additional £1.00 than to give an item that looks low quality.
If you are purchasing makeup to sell, buy quality. It would be better to sell less than sell a whole load of junk that will cause you problems and a poor reputation later on!
Pitfalls
With every opportunity there will always be a negatives you need to consider. The same is true for bulk purchasing. Consider the distance and time you are dedicating to gain the ‘cheapest’ deal. It may initially be cheap but other factors may make it vastly more expensive and cut into your profit.
Storage space will at some point become an issue. If you only have a small apartment you will need to keep items that you have purchased in bulk somewhere and living with them all around you may inhibit your own life. Consider a lock up or a self-storage option for a smaller cost. Maybe even a friends garage, while you get set up!
Planning your sales is key too. If a product has a lead time of 6-8 weeks, that means you cannot sell that product for 6-8 weeks. So what will you sell in the meantime? You will need to start organising your time and selling schedule a little more systematically. (Look at the resource page to help you get started)
Fresh food products MUST be stored correctly. You are selling potentially hazardous items to the public and you do not want to injure anyone. If your stall sells food, then take all the proper precautions to ensure people are safe.
Conclusion
Bulk purchasing is what you will be doing if you are going to make a profit on the Market Stall. Even if you hand make items, you will still bulk buy where you can to keep your costs low so when it comes to selling your item you are making more of a profit.
Consider your options when it comes sourcing the best items. Time, and distance are just as important as storage and strategic planning.
