One of the really strange questions I get asked a lot is “How can I do EXACTLY what you do?”, (meaning sell bulk wholesale / liquidations). ....It’s kind of a crazy question, because I doubt the asker wants me to give them a 9-hour on-the-spot crash course in starting a wholesale company, so I am never sure HOW specifically to answer this question… it kind of reminds me of when people ask me “What’s it like being so short?”.... *blank stare*...

With that being said, I thought this is the perfect blog topic: Pros and Cons of Selling Bulk Wholesale. Let’s begin!

There’s two main methods of sale; “B2C” and “B2B” (trust me, you need to learn this, otherwise I wouldn't bother with bringing it up). Let’s first discuss “B2C”.

B2C means “Business to Customer” also known as “Business to Consumer". B2C Sellers are those awesome, hardworking, up-early eBay, Amazon, Poshmark, Mercari, Walmart.com, Bonanza and Sears.com Sellers who usually sell items by the piece. For example, when you go to Etsy.com or Depop.com you usually buy a listing for 1 cute yellow, delightfully fluffy sweater for your pet chicken:

The PROS of being a B2C seller are:

• Way friggin higher profit per piece!! I mean, way, way, waaaaayy more profit. We will discuss this in detail in a little bit but here's a quick examp for ya:

as you can see, in the example above, the seller who listed this cotemporary-chic chicken-gear for $25 ended up with 20 bucks that they can blow on a Frappuccino and an Amazon Kindle book and still have $5 left over to buy another poultry sweater with to resell all over again. 

• Substantially lower inventory cost
• You really CAN have a big product offering off of a smaller budget - Super easy to make someone LOOKING at your site think you're a big, huge company!
• You don’t need insane amounts of storage space. You really can operate an online store that makes 6-figures-a-year or more from your basement!  No joke!
• Because the items are individual, they are much easier to store. Need storage advice? We got you covered: read our article How to Shelve and Store Your Inventory (Part 1)
• Less attacks from scammers.  These credit card fraudsters are people who steal credit cards then aim for bulk wholesale companies because they want to get the biggest quantity of goods possible before the card is reported as Stolen.  These people royally suck and can utterly destroy a small business.
• SO MUCH LESS COST TO SHIP! A wholesale bulk lot can cost $100 or more to ship, whereas a single shirt can cost as little as $3! Got a little bit of time to better yourself? Learn How to Ship FAST AND CHEAP Through USPS (Stuff you HAVEN’T HEARD!)

CONS

• Way pickier customers and quite a bit of Batsh*t Crazies (yes, we also wrote an article about those dreaded types). Because these people are buying it to keep, AND paying good money for it, they can be Level 9 or even Level 10 psychos.  I was once told the two things people are most picky about are their food and their hair; okay, I'll agree with that, but I totally think "online purchases" needs to take 3rd place!  If you have never seen a woman have a total meltdown through email, try sending her a "beige" bra that you're listing foolishly referred to as "brown".  You would be amazed that a single intimate could "ruin her life". 
• Because of the pickier customers (and nuttiest-of-nut jobs), listings must be really, really thorough. Because listings must be mega-thorough, listing the item takes longer (if you don't make it thorough, plan on investing endless hours into dealing with Life-Freshly-Ruined-Karen... the woman who needs a therapist and a Valium way more than she needed your $9.99 T-Shirt Bra).

Now let's discuss B2B; "Business to Business".  This is what we do here at BigBrandWholesale.com - we sell in bulk so 98% of our customers are resellers who are purchasing our Lots with the intention of (re)selling them to other people.  

PROS: 

• The amount of profit you make off 1 purchase is usually larger than 1 item being sold via B2C.  

For example, an ebay seller pays $5 for a blue striped Squirrel Sweater.  They then sell it for $25, so they have made $20 gross profit (just like with the chicken sweater.  As you can see, this person is REALLY into animal sweaters.  Don't judge them!) Whereas a wholesaler would sell 20 Squirrel Sweaters for only $5 each (=$100 total sale), but the wholesaler paid only $3 per sweater (=$60 cost), so the wholesaler makes $40 profit off 1 sale, like this:

• Most customers who order come back over and over... year after year. We have some customers that have been with us since. With that in mind...
• It isn't that hard, when you sell bulk wholesale, to gross $10,000, $20,000 or more a month. In 8 years time we were bringing in $65,000 - $85,000 a month.... 

CONS:

• ...BUT, keep in mind that your profit margin is LOWER, so even though you are bringing in big money, you have to realize you're not actually as cool as you think. If you "make" $60,000 a month, you might only REALLY be "MAKING" $12,000 whereas a B2C seller who sells $60,000 in gross profit might take home actual pay of $30,000+! VERY BIG DIFFERENCE.
• Cost-Per-Listing. Although a wholesaler might make $40 off the 20-piece-blue stripe squirrel sweater sale, the wholesaler had to invest $60 in this ONE listing.  So, if you are a wholesaler and you want to have only 1,000 total listings on your site, you will need $60,000 just for the cost of the products.  For reference, our website, BigBrandWholesale.com has 3,500 - 5,500 listings on a single day, depending on the month and how busy we are.
• To have only 1,000 listings with only 20 items per piece, a wholesaler has to store 20,000 items.  For reference, our warehouse is 7,500 sq ft with ceilings that are over 20-feet high.  We also have a second floor.  As of July 2020, our warehouse is almost full and we are constantly trying to figure out how to be more space-efficient. 
• If you want to have multiple quantity of a listing (for example, if you want to sell a 20-piece-lotion and you have 100 total lotions, you could list five 20-piece lots) you will have to store 50,000+ pieces. 
• When you sell wholesale / bulk you become a target of scammers. I am not referring to "bad customers".  I am referring to illegal criminal enterprises that use stolen credit card information to place millions of dollars of fraudulent orders online.  When the victim of the credit card theft realizes their card numbers were stolen they file a chargeback dispute with their bank, then 100% of the money is instantly taken away from the wholesaler and given back to the victim... even though the wholesaler was also a victim.  The wholesaler has now lost the money, lost the inventory and paid a $40 "chargeback fee" as punishment for accepting a stolen credit card number as payment.... even though the wholesaler has absolutely no way of knowing the info was fake.  As reference, BigBrandWholesale.com gets $15,000 - $40,000 per YEAR of "fraudulent orders". In fact, we have so many scam orders placed that we PAY "Fraud Prevention Specialists" to review EVERY order for us to make sure it's legit! YES, we pay for EVERY ORDER to be reviewed for authenticity. That is another big cost!
• When you sell some types of wholesale you have a large amount of loss, especially if you sell Liquidations or Store Returns.  You should expect 10% - 30% of every truckload you buy to be totally unusable trash. There is nobody to take of security sensors or refund you for imperfections.  Whereas most B2C buyers are used to buying through a wholesaler who has already sorted the merchandise for them and removed imperfections.  
• Speaking of truckloads; shipping is substantially more expensive when you buy your merchandise.  A single pallet is going to cost $275 - $800+ IN SHIPPING AND DELIVERY CHARGES.  This does not count the cost of the inventory. 
• When the wholesaler ships to their buyer, shipping is also much more expensive than shipping an individual item.  As mentioned earlier, if you ship a single top, it might cost as little as $3, but if you are shipping 30 tops shipping is going to be $20-$35 (on average).
• No matter how cheap you price the merchandise, people still think it's too expensive.  People expect THE WHOLESALE to INCLUDE free shipping in addition to fast shipping (and fast delivery), great thorough packaging and coupons / discounts.  I kid you not, we have listings for 5 M*CYS designer shirts for $24.99 with free shipping + an extra 5% off AND a free $18 designer cosmetic bag and people still ask for more discounts.  Yes, they are getting over a $200 value for $21 and it's still too expensive for them.  Want to know our actual cost?  We paid $19.  So, if the customer pays $21 total (using the coupon code) and gets the free bag + free shipping, we end up making 89 cents after credit card processing fees... but after we pay staff it is a total loss.  

BUT... my goal is NOT to discourage you.  My goal is simply to educate. So, if I have peaked your interest and if selling wholesale sounds like a business you think is the right choice for you, stay tuned because coming tomorrows article: HOW TO START SELLING SMALL BULK LOTS ONLINE