Running a wholesale business can be incredibly profitable and rewarding. However, when you’re first starting out, it’s important to carefully consider which products you sell.
The good news is that there are a wide variety of options to choose from that can result in a profitable wholesale business. Learning about the most profitable product categories can help you narrow down a handful of key business decisions and establish a model that is most likely to bring in revenue.
In this post, we’ll discuss important factors to consider when choosing wholesale products. Then we’ll provide a list of six of the most profitable wholesale product ideas and explain what makes them so effective. Let’s get started!
What Makes a Profitable Wholesale Business
The products you decide to sell through your wholesale business can have a significant influence on your success. Careful research and consideration are necessary in order to set yourself up to earn the most revenue possible.
There are a handful of factors that you should take into account when determining the wholesale products you offer. Some of the biggest ones include:
- Profit margins: Profitability refers to how much money you make from selling a product. The higher the profit margin, the more money you’ll make with each sale.
- Seasonality: Seasonality means that some products will only be in demand during certain times of the year. Some products are suitable to sell year-round, while others are best for certain months of the year.
- Competition: This is how many other sellers are offering similar products. While a market may be expansive and continuously growing, it’s important to consider how many other brands and companies you’ll be competing with. However, you can also look at what others are offering to set your pricing competitively lower.
- Size and weight: Size and weight affect how much it costs to ship your products, and this affects your bottom line. The size and weight of your products can also influence how much space they take up in inventory, which can affect your warehousing and storage expenses.
- Chances of reordering: Sellability refers to how likely customers are to buy a product again after they’ve already purchased it once. For example, while electronics are in high demand, they may not often be reordered. On the other hand, products with expiration dates, such as beauty items and cosmetics, are often reordered.
These are just a few examples of the areas you need to consider when deciding which wholesale products to sell. Once you understand the nuances of each of these factors, you’ll be better positioned to create a profitable wholesale business.
6 Most Profitable Wholesale Business Product Ideas
Now that we understand the importance of considering which products to sell, let’s take a look at some ideas to get you started. Below are six of the most profitable wholesale product ideas.
1. Clothing and apparel
There are a few key reasons why selling clothing and apparel can be profitable for wholesale businesses. For one, the global apparel market is huge and growing. It’s estimated to be worth $1.3 trillion, and is expected to grow to $1.5 trillion by 2025.
Another reason is that clothing and apparel are generally low-cost items. For example, if you sell t-shirts for $10 each and have a profit margin of 50 percent, you would only need to sell 10 t-shirts per day to make $500 in profit.
2. Luxury and designer items
There are a few reasons why luxury and designer items can be good products to sell for wholesale businesses. One reason is that there is often less competition in the market for these items.
Additionally, luxury and designer items often have a high-profit margin, meaning you can make more money per sale. Many people are willing to pay a premium for luxury and designer goods, so there is often strong demand for these products, even during tough economic times.
However, there are also some drawbacks to selling luxury and designer goods. One challenge is that these products can be expensive to purchase in bulk. This means that businesses need to have a strong financial foundation in order to be successful in selling these items.
Additionally, luxury and designer items are often seasonal. Demand for them can fluctuate depending on the time of year, so it’s important to be aware of these fluctuations and plan accordingly.
Jewelry is a timeless product that will always be in demand. It can be very expensive, so selling it at a discount can still result in a high-profit margin.
It’s also not seasonal, meaning you can sell it year-round. It makes for an excellent gift, and you won’t have to worry much about the size and weight. Typically, these items won’t take up a lot of inventory space.
On the other hand, jewelry can be highly competitive. However, there are so many subcategories and niches that make selling these products for profit possible.
Jewelry also has a high markup potential. Wholesale businesses can charge a much higher price for jewelry than they could for other products.
The global electronics industry is worth an estimated $2 trillion, making it one of the largest industries in the world. There are several reasons why selling electronic items is a good idea for establishing a profitable wholesale business.
With high markups, they let you make a decent profit off each sale. Also, in this digital-first environment, there is a high demand for electronic items. People are constantly upgrading their phones, laptops, and other devices, meaning there is a constant need for new electronic products.
Third, competition in the electronics industry is relatively low. There are a few large companies that dominate the market, but there are also many small businesses.
Finally, electronic items tend to have a long shelf life. This means that you can buy them in bulk and store them until they are needed, without having to worry about them going out of style or becoming obsolete.
5. Beauty and self-care products
For starters, the global beauty industry is worth an estimated $532 billion, and it’s growing. This provides plenty of opportunities for businesses to get in on the action and make a profit.
There are several reasons why beauty and self-care products are good for wholesale businesses. Beauty and self-care products are generally high-margin items. For example, the average markup on cosmetics is 78 percent.
The beauty industry is relatively fragmented, with many small businesses competing against each other. This provides an opportunity for smaller businesses to gain market share by offering competitive prices.
Beauty products are also profitable wholesale products because it’s easy to communicate their benefits. You can easily package and ship them and there’s a plethora of sub-niches you can enter.
6. Pet Supplies
There are many benefits to wholesale businesses selling pet supplies. One of the most important is that it can be a very profitable venture. As with the other products on this list, they’re always in demand, and there is a large market for them.
Competition is relatively low, and there are often opportunities to sell in bulk or at a discount. Seasonality is not usually an issue with pet supplies and they’re generally easy to store and transport, making them ideal for wholesalers.
As we discussed in this post, the most profitable wholesale products to sell are those that have high-profit margins, low competition, and high chances of reordering.
As we discussed in this post, there are a wide variety of products to consider selling to build a profitable wholesale business. Some of the most popular include:
- Clothing and apparel
- Luxury and designer items
- Beauty and self-care products
- Pet supplies
Do you need help building and managing your wholesale business? Download Wholesale Suite today to get started!