3 Principles of Open-to-Sell Wholesaling
Open-to-buy has been the practice in retail for many years. It’s based on historical trends. You can predict what will be popular for Christmas by analyzing what has been popular for Christmas for the past five years. But what about Open-to-Sell?
Open-to-Sell isn’t so much about historical trends. Rather, it’s about what is hot right now. What are customers buying today? To manage that process effectively, we recommend keeping an eye on these three primary aspects of your wholesale business.
- Margins – Revenues won’t pay your bills. Margins will. So watch your analytics and look at how much profit you can make on each piece of merchandise. To manage this process effectively, you’ll need to buy at the right price and sell at the right price.
- Buy in Bulk – The only way you’re going to get the price down far enough in wholesale to make your margins grow is to buy in bulk. If you buy enough product, you’ll take advantage of discounts. That increases your margins. But you’ll have to buy the right products in bulk or you’ll end up holding inventory for a long time, maybe forever. That will surely affect your bottom line, er, your profit margins.
- Watch Consumer Buying Trends – To know what customers are buying today, you need to keep your ear to the ground. To do that effectively, you need to monitor social media and know what customers are talking about. Don’t just watch new technology announcements. Just because it is manufactured doesn’t mean it will sell. Watch product reviews and sales data in retail stores across the nation as well as locally. Listen to what consumers are saying. If you can catch the wave of popular items before you start selling, you’ll keep your margins high and your profits steadily increasing.
Wholesaling is more efficient when you focus on an open-to-buy sales mentality. Rather than watch what has sold historically, because trends can change on a dime, take a look at what is selling the most right now. You can stock much more of what is popular and increase your margins rather than stocking broadly and hoping your inventory sells.