what's wholesale? Business help!?

Hey everyone...



I'm planning on setting up a small computer systems business from home. I have the knowledge to do it and i can even create my own website...



However, to make at least some profit from selling each system, i was told i need to buy wholesale as buying from retailers just makes the systems being sold more expensive.



But i don't understand, i have looked on several wholesale websites and all the products seem just as expensive as the ones the retailers sell.



How do i make any profit if other companies/ businesses can make the same sort of systems for cheaper and still make profit?



oh... and whats the difference between a wholesaler and a distributor, and how do retailers buy their stock and make profit?



All answers are much appreciated.

Thanks, Tom :)

Tom, to be brutally honest you shouldn't start a business until you know what you're doing.
Computers have razor thin profit margins...you'll never compete with the big guys.
How will you provide warranty and tech support?

Tom,
I agree with the first post here. PC systems are rock bottom margins and you've got to sell loads to make any kind of reasonable profit.

To answer your question though, basically, the more you buy the bigger discount you can command so buying all the parts for one system will not get you any discount and will end up costing you as much (if not more) than it would just buying one retail. This is the concept of wholesale that you buy in bulk to reduce your costs to increase your margin.
A distributor is simply someone who buys wholesale (possibly direct from the manufacturer) in order to sell retail.
Retailers buy as much as they can for the best price and sell from stock. The main issue there is that they have to fund the stocking of the products they've bought until they sell them.

Technically, a wholesale purchase is any purchase made where the intention is to resell the product. A retail purchase is a purchase made by an end user.

People often use the term "wholesale" to mean "wholesale price", which is where you're getting products at the same price as wholesalers do. Note however that wholesalers generally get better and better pricing as their volume goes up, so buying say one motherboard at "wholesale price" is typically not going to be a lot different to buying one motherboard at "retail price".

In order to make a profit, you either need to buy cheaper in volume, and resell at a markup (a profit margin), or otherwise add some value and resell at a markup.

As others have stated, the margins in computers are thin, so unless you have some unique selling point you need to buy and sell in large quantities to make a decent income.