If you are thinking about opening a retail store that sells designer handbags then I would be very cautious to consider the pros and cons. Retail is a tough business and there are a lot of unknown costs and risks associated. If you have a bit of experience, you may want to consider the wholesale designer handbags business. Although you have to buy in bulk, a wholesaler can get a much better discount from the manufacturer then a retailer can get from a wholesaler. In other words, the person who buys a higher quantity is going to get a better deal because the seller will make up the difference in bulk. For example, if I buy two designer handbags for the price of $150 ($75 each), then I would have to sell those designer handbags for almost twice the price to make money as a retailer. Not only do I have the cost of goods to deal with, but I also have rent, insurance, payroll, etc. But if I buy 100 wholesale designer handbags at $20 each , or $2,000 total, I only have to sell them for maybe $30 each to make a nice profit because I am selling in bulk.

The following is generally how it works in the wholesale business. The manufacturer creates the designer handbag and sells it to the wholesaler. Subsequent to this transaction, the wholesale designer handbags are sold in bulk to the retailers. Each retailer might buy five or six designer handbags for their store. If they sell them relatively quickly then they will likely be calling you to order more.

Remember that the higher up the chain you move away from the manufacturer, the more expensive the designer handbags will be. And the closer your purchase chain is to the manufacturer, the cheaper the designer handbags will be. So if you have a little experience and a small cash flow reserve, you may want to consider the wholesale designer handbags business.

You’ve heard the saying from the financial gurus who tell you that the investor makes a profit when they buy, not when they sell. Sounds contradictory but it holds true as long as you are buying below the market price and you have the ability to sell in a relatively short period of time. For example, Bill buys a pair of 500-piece wholesale jewelry lots from Ken for $2 per jewelry piece (or a total of $2,000). If Bill can procure a buyer for $2.50 per jewelry piece (a total of $2,500) then he will make a profit. So in theory, Bill was able to lock in his profit on the $2,000 purchase knowing he could sell for $2,500. Sounds like a good plan. This could be an example of Bill buying wholesale and selling retail. Or maybe he is a very shrewd business man. However, it is unlikely that he could flip his wholesale purchase to another wholesale buyer. Not impossible, of course, but still not likely since most wholesale buyers are knowledgeable enough to understand the market value for the jewelry.

So if you are in the retail jewelry business and you make money be selling volume, it is in your best interest to buy wholesale jewelry lots instead of one piece at a time. The reason is very obvious. Businesses that sell jewelry in large quantities have an incentive to sell at a discount to move the jewelry. It’s like any other business that deals in wholesale goods. They have a large quantity of jewelry, for example, that they either manufactured or picked up on a steep discount. They have a specific profit margin they are looking for but they need to sell the wholesale jewelry at a certain price to get that profit. If you are a retailer, you will need to sell it for a bit more than the wholesale price so that you can make a profit. No reason to be in business if you can’t make a profit, right?