Wholesale Sourcing in Australia.

Product sourcing is the most fundamental block in starting a successful retail business. Whether you are an online trader with your own website reselling goods or a physical store owner stocking up your shelves with resalable merchandise, your business can not go ahead, let alone succeed if you don’t actually have any means of obtaining the stock.

Naturally, the products and/or product lines must be obtained at wholesale prices in order for you to make a profit from reselling the goods. Let us now explain simple principles and definitions of the wholesale market and the process of wholesaling in Australia and worldwide. You will be surprised at how different websites and individuals for that matter perceive the Australian wholesaler concept.

Wholesaling Definition:

Wholesaling involves all the activities in selling goods and services to those who buy for resale or business use. Wholesaling excludes manufacturers and farmers because they are engaged in primary production and this excludes retailers.(Kottler, Prentice Hall 2007)

Wholesalers (also known as distributors) differ fro retailers in a number of ways. First wholesalers pay less attention to promotion and location hence the difficulty in finding them. You will notice that true Australian wholesalers are positioned in warehouses usually located in suburban industrial areas that are not frequented by passing consumer traffic. Retailers on the other hand rely on good store locations to attract consumers who concentrate in those areas for reasons such as convenience, accessibility and a good range of outlets. This can be interpreted both in a physical means and if you are an internet store owner. Ideal physical store placement would be at a shopping mall or plaza. (recently homemaker centers have also become a favourable means for the distribution of bulky goods)
For internet store owners, the prime position would obviously be a top position in a search engine result or other related directory such as online shopping malls.

The Growth and types of Wholesaling in Ausrtralia:

Wholesaling has grown in Australia at a rate of 3.25% (compound) since July 2000. Although this is below the average of mass producing world factories such as China and USA, this positive growth in the Australian Wholesale market can be attributed to strong economic growth and international consumer demand for our rich pool of natural resources. States such as Western Australia and Tasmania are experiencing economical booms due to the number of new manufacturers shifting their focus towards local production instead offshore raw materials export.

In the past, Australia has been known mainly as an exporter of raw materials such as uranium, coal, metals, paper and woodchip.

Over the past several years we have seen more and more finished product manufacturer’s popup onto the scene, driving the wholesale market to a state of competition.

Domestic wholesalers of non-domestic products.

A lot of people question whether Australian wholesalers can in fact be compared to those of other economies such China and USA. The quality of a wholesale contact is always determined by the availability of products that are in demand, and the pricing of those products. With the Internet flattening out international borders and allowing people to trade on a global scale, we have noticed a growing number of importers and wholesalers distributing foreign produced consumables within our Australian Market.
This is great news to people who are starting their online businesses and want to concentrate on reselling high demand electronics and fashion merchandise. This is not always the best choice of products to be reselling as the profit margin is minimal even when the product is obtained at true wholesale prices. Smart retailers simply use these products to attract consumers to their sites rather than to make huge profits from them. We will discuss the details of profit margins and goods available within our Australian market in later articles.

In conclusion, the Australian Wholesale market is a developing one with a growth rate that is comparable (per capita) to other global industry giants such China, India and USA. The good news for Australian online business owners is that more and more products can be sourced locally at wholesale prices, even if they are not produced locally. The current wholesale mix in Australia is a lot different than from one let’s say in China. Australians have a means of generating healthier profits from the resale of specialized goods rather than mainstream, high competition consumables who by the rule of thumb, should be left for distribution by retail giants such as Harvey Norman and Myer. Trying to compete with those retailers is a naïve approach to starting an online business.

Please read other specialized sourcing tips and news contained within our Australian Wholesale Network website.