Most brand new consumer electronics and computers generate slim profit margins because of high manufacturing costs. The more expensive a product is to produce, the less profit there will be for the seller. Designer clothing and handbags such as Louis Vuitton, while much more profitable then electronics, can have specific compliance rules and capital expenditure requirements. Some high fashion lines require yearly minimum purchases in excess of 600,000 dollars.

    In addition to minimum purchase requirements, certain marketing restrictions can also be imposed as well. In most cases, you can forget about selling most branded items through your own website or Ebay auction. You may be required to invest in an upscale retail location. This can be an incredible expenditure in capital for either leasing or new building construction.

    Moreover, you will need to turnover product in a rapid and timely manner. This requires that you hold down a payroll and hire employees that have expertise in the sales and marketing of luxury goods. Trends and changing consumer tastes can kill your bottom line if product is not moving out of your store.

    Stagnant sales can turn this year’s hot product into next year’s dead stock inventory. Unless you have a financial golden goose to help you with start-up and infrastructure costs, then competing in the high dollar world of designer clothing and consumer electronics can be an uphill battle toward bankruptcy.

    So, what do you do if you are not blessed with unlimited capital? What particular product, or group of products provides a low financial barrier to entry, marketing flexibility, as well as a higher than average profit margin? One group of products that has a diversified marketing and profitability portfolio is  wholesale novelty merchandise.

    The wholesale novelty business provides options that are unique in the world of mass merchandising. Unlike franchising or investing in an expensive retail operation that requires monetary muscle, the financial hurdles in the wholesale novelty business are quite low. Minimum purchasing requirements imposed by some wholesale novelty companies can be as little as thirty to fifty dollars.

    The variety of product choices and marketing support materials are immense. The novelty industry sells millions of products each year. They service businesses that can range anywhere from a single store owner, to a multi-million dollar enterprise. Multitudes of new products enter the marketplace each year because of the relatively low cost of manufacturing.

    Depending on what type of advertising and business model you employ, you can test market a variety of merchandise with a relatively small investment.  If you own a retail store, some distributors of novelty merchandise are more than happy to set up a point of purchase display and take a portion of the profits from your walk in traffic.

    You can set up a website, and test a small amount of product to sell to the Internet masses, without spending thousands on a retail location. Finding wholesale suppliers of novelty merchandise is relatively easy. A simple Internet search can reveal sources for all types of novelty wholesale offerings.

    In this article, I will supply you with a small list of some of the larger novelty wholesale suppliers in the country. But, before buying any merchandise from a novelty wholesaler, it is always a good idea to study market trends.

Click here to read part two of “How To Be Successful In The Wholesale Novelty Business"- By Robert C. Potter.

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