Dear readers, venturing into trading business means having to buy stock. Maximizing margins means more profit for the trader. To gain this we usually come across MOQ (Minimum Order Quantity) which is the minimum amount that the trader would have to buy from the manufacturer or the wholesaler to get a good price or to be sole/independent distributor. This is where it gets a bit difficult. Manufacturer usually put a very high MOQ so they are able to clear their stock quickly. This is for them to get their ROI (Return on investment) faster and reduce their risk and putting it on others.
Traders usually aren’t exactly prominent in buying large MOQ so usually dealers or distributor would buy them, mark-up the price and sell it to the trader in smaller quantity. It’s a BIG race in this battle to maximize profit. Usually traders’ ends up buying items with less than 30% margin which should be around 100% to sustain a good cash flow.
The source of the stock is really important for many reasons; either to get stocks that are good in quality, confirm orders in other words won’t cheat you, on time delivery. For wholesalers, they obtain stocks in large orders from manufacturer all over the world and mainly China and Taiwan because of the cheap labour and which equals to cheaper pricing. For us we get from the wholesalers, for apparels, it’s everywhere Petaling Street, ChowKit, PJ.
Warning!! Don’t try to get to creative and start trusting some parties on the internet especially those from the B2B (business to business) market place such as http://alibaba.com/ . If you’re unlucky and not experienced enough, they would most probably ask for money upfront and you would end up with no stock and would be waiting forever. Note: This is a personal experience
In short, if you believe a business trade would work, work out your capital first and then do purchase the stock upfront rather than buying it from the wholesalers, only if you’re going for the long term.
Traders usually aren’t exactly prominent in buying large MOQ so usually dealers or distributor would buy them, mark-up the price and sell it to the trader in smaller quantity. It’s a BIG race in this battle to maximize profit. Usually traders’ ends up buying items with less than 30% margin which should be around 100% to sustain a good cash flow.
The source of the stock is really important for many reasons; either to get stocks that are good in quality, confirm orders in other words won’t cheat you, on time delivery. For wholesalers, they obtain stocks in large orders from manufacturer all over the world and mainly China and Taiwan because of the cheap labour and which equals to cheaper pricing. For us we get from the wholesalers, for apparels, it’s everywhere Petaling Street, ChowKit, PJ.
Warning!! Don’t try to get to creative and start trusting some parties on the internet especially those from the B2B (business to business) market place such as http://alibaba.com/ . If you’re unlucky and not experienced enough, they would most probably ask for money upfront and you would end up with no stock and would be waiting forever. Note: This is a personal experience
In short, if you believe a business trade would work, work out your capital first and then do purchase the stock upfront rather than buying it from the wholesalers, only if you’re going for the long term.
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