Every type of commercial business has more or less the same goals – to maximise sales while minimising costs, in order to get the best profit margins possible.
For any business selling physical goods, inventory management plays a critical role in this formula. On the one hand, you aim to make sure that, whenever a customer comes looking for a specific item, you have it in stock so you are able to make a sale at every opportunity. On the other hand, a surplus of stock that you cannot shift represents waste, a cost burden that you are unable to convert into revenue.
This dilemma sums up the main pros and cons of buying goods in bulk. In addition to ensuring you can always meet demand, purchasing in higher volumes also tends to bring cost benefits in the form of a reduced price per unit. But this is a careful balance to strike, as a lower unit price is no good if you cannot eventually sell the products, or have to do so at a discounted rate that erodes your margins.
For used mobile phone traders, the benefits of buying stock in bulk by and large outweigh the potential pitfalls. Here are some of the main reasons why.
Cost savings scale up with higher value items
Economies of scale bring bigger benefits the higher the value of the goods in question. Snack shops might buy boxes of crisps in bulk, but they are still only measuring the saving in pence. With an electronic gadget like a mobile phone, the reduction you get per unit is measured in pounds, and for top end smartphones, you are looking at savings of tens of pounds per handset.
Neither shelf space nor shelf life present issues
The larger a certain product is, the more you have to take storage space into account when making bulk purchases. For all their power and versatility, however, even the very best smartphones capable of rivalling PCs and laptops for computing performance are still compact, lightweight items which pose few issues for storage even at high volume. In addition, there is no issue with storing them for however long you need, meaning you have time on your side for turning purchasing costs into revenue.
Reconditioning helps to protect margins
Following on from the point about a long shelf life, one concern with high value electrical goods – especially in a fast-paced market like mobile phones – is that they depreciate in value quickly as more and more new models are released. While this is a factor, the value of a used mobile phone is actually influenced more by condition. That means second hand vendors are able to protect margins over long periods by reconditioning the handsets they purchase and selling them in a better state than when they received them.
Meet demand in a crowded market
There are literally hundreds of mobile phone models available, with new ones being added all the time. With so much choice, it can be hard for vendors to predict consumer trends in terms of which fall in and out of favour. It is easy to be caught out by stocking just a handful of last year’s iPhones or Galaxies, only to see them fly out and not being able to meet further demand as a result. By doing all of your product purchasing in bulk, you can buffer yourself against sudden and unexpected spikes in demand like this.
To find out more about how Phoenix Cellular can supply your business with quality, graded, used mobile phones in bulk, contact our sales team on +441270 449999