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How to know what to buy (part 1)

06/28/2007 11:27

...Before you try to choose what to buy, decide how you are going to get the products that people want to buy most. You can use the following strategy to build a package of fast selling products.
When I first started buying products for re-sale, I looked at everything as if I was buying it for myself. I don't like to waste money, and I would spend a lot of time trying to decide if something was really perfect before I would buy it. Sometimes, I only bought a few things; but I could spend hours agonizing over what was the perfect decision.

When I came away from one buying trip like this, I figured out that I had bought so few things that I wouldn't make any money for my time, even if everything that I bought sold right away. I had been so careful trying to save money and not risk a mistake; that I had ended up with no chance for making a profit on my time. I would have made more money working at a minimum wage job.

So I came up with the following strategy for buying things. It is not original: most other successful businesses have done the same sort of thing for a long time. It is a common sense way of building up a selection of products that customers will come to you for.

Instead of trying to make absolutely perfect choices on each product that I bought; I decided to look for products that I thought had at least a 50/50 chance of selling to any one of my customers. Anything that sold I would buy more of; and anything that didn't sell, I would drop the price on until I got rid of them somehow ... even at a loss.

If I bought ten new products, I would expect four of them to sell. The other six products would be sold off at a small loss, and I would never buy them again. I would buy more of the four products that sold, so that I kept these in stock for my customers. Next, I would buy ten other new products that I thought had at least a 50/50 chance of selling, and do the same thing over and over again. Soon I would have a bunch of products that my customers wanted to buy.

I could drop the price as low as I needed to get rid of the bad items, because my real goal was to sell more ... not to sell every single thing.

I would grow faster with more new products, because I would try lots more new things.

The bad part was that I would have more products that wouldn't sell fast and easy (especially in the beginning). But in six months or less, I would have sold much more than I ever could by being overly cautions.

After I started doing this, a lot of things sold that I would have never bought if I had stayed so conservative. There are big parts of our business that started out by trying out something new and different. If fact we would not even carry most of the products that are our best sellers now if we didn't try some different (and even sort of crazy) ideas on a regular basis.

If you haven't tried this, it is an experience that you need to get. If you are like me, you will be surprised by how many products can turn out to be best sellers.

There is an even better way to do things than this though. With even just a little experience, you can start choosing best selling products most of the time. Big businesses use some of these same methods for finding out what will sell the most. A lot of these are basically pretty simple for you to use. In the next article, we will talk about some of these more refined methods that will get you the best products with a lot less guesswork.

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