Dilemma: buy from wholesaler vs. trying to find overseas manufacturer

[whitebelt]

I had posted a previous thread regarding finding a manufacturer overseas of a particular product that I find to be of very high quality. As I search for the manufacturer I am stuck between waiting it out until I can find the origin of the product, or buying directly from a US wholesaler and selling the product. There is no definitive date of when I would be able to find it, and even if I did I don't know if I would be able to buy direct from the manufacturer (may have a trade agreement with current US importer).

The product I want to buy I can purchase for about $1.00/unit shipped. If I could get it directly from the source I think I could get it for $0.50 or less. It is not perishable and the weight is very light. It's not a food item or any kind of product where I would need to worry about any kind of strict regulations or rules (e.g. FDA approval). I could store it inside of my house very easily and should be able to distribute pretty easily as well. No risk of breakage with shipping and definitely would not need insurance. They are products that, depending on usage, would need to be replaced after 6 months to a year. The items are usually purchased in packs of 5-20.

Based off of my market research I think I could charge about $2.50-3.00 per unit, not including the cost of shipping.

So essentially my question is, do I buy US wholesale now and continue to search for the product origin, or do I hang tight until I find the manufacturer? I don't know if those profit margins would be considered sustainable.

 

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[G-Man]

Buy the MOQ from the US wholesaler to test the market, and if it's good, you can buy from OEM

 

[biophase]

How do you plan on selling these?

 

[whitebelt]

How do you plan on selling these?

I was considering selling on Amazon and using that to build a brand and drive traffic to a website. The long term goal would be to become independent at some point once I have enough traffic/customer base.

You asked a very simple question (and I think intentionally) and the wheels are spinning in my head now. Do you start off with a good product first or do you figure out the proper channels to sell? My concern is that each link I add in the chain (Amazon, Shopify) that I may become dependent on them.

The initial step I was trying to take was to figure out if that looked like a reasonable profit margin to work with or if the project wouldn't be feasible.

 

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[biophase]

I was considering selling on Amazon and using that to build a brand and drive traffic to a website. The long term goal would be to become independent at some point once I have enough traffic/customer base.

You asked a very simple question (and I think intentionally) and the wheels are spinning in my head now. Do you start off with a good product first or do you figure out the proper channels to sell? My concern is that each link I add in the chain (Amazon, Shopify) that I may become dependent on them.

The initial step I was trying to take was to figure out if that looked like a reasonable profit margin to work with or if the project wouldn't be feasible.

I ask because any product that you are buying for $.50 or $1.00 is going to be a nightmare to sell on Amazon.

You better figure out how to sell it first, before you buy it. Buying the product is the easiest part of ecommerce.

 

[whitebelt]

I ask because any product that you are buying for $.50 or $1.00 is going to be a nightmare to sell on Amazon.

You better figure out how to sell it first, before you buy it. Buying the product is the easiest part of ecommerce.

Sorry, I should have specified. I would ONLY sell these in groups of at least 5 units. There are similar products available on Amazon but they are cheaply made and tend to be those "pop up" stores with weird names and fake reviews.

I guess it's the same principle as buying a bag of M&M's, but no one is going to buy/sell just one piece of candy.

 

[biophase]

Sorry, I should have specified. I would ONLY sell these in groups of at least 5 units. There are similar products available on Amazon but they are cheaply made and tend to be those "pop up" stores with weird names and fake reviews.

I guess it's the same principle as buying a bag of M&M's, but no one is going to buy/sell just one piece of candy.

you are still talking about a $15 product that you source for $5. It will be tough.

 

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[whitebelt]

you are still talking about a $15 product that you source for $5. It will be tough.

Would you recommend any other channel or you don't think it would be worth it in general?

Would you say it's the dollar amount in total that would make it difficult (meaning only charging $15) or because there isn't much of a profit margin?

 

[AgainstAllOdds]

Take @biophase 's advice.

In regards to your question:

You start with the U.S. manufacturer. Build the market even at break even. If there's a market, then you monetize.

For my business, I'm starting to buy certain products from a competitor and sell them off at cost as they come in. Low risk.

If there proves to be a market, then I'll be importing the products myself and cashing in.

Same way that stores "private label" their own products once they see that there's value to be captured.

 

[biophase]

Would you recommend any other channel or you don't think it would be worth it in general?

Would you say it's the dollar amount in total that would make it difficult (meaning only charging $15) or because there isn't much of a profit margin?

Well, if you buy a $5 product, sell on Amazon for $15, you will get about $9.50 from Amazon for each sale. So that leaves you with $4.50 on each product for PPC, storage, etc...

So what will you really make per product? $1-$3?

 

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