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Running a retail business in bicycles faces numerous challenges. You have to meet the demands of customers in every way possible. Some people prefer athletic bicycles, while others opt for basic bicycles. They all have different requirements depending on the health and commuting benefits they want. From kids to adults, all buyers have something in mind that they look for when choosing bicycles. In these times, retailers must decide between bulk buying and local sourcing. These two sources have different advantages and disadvantages, which can affect a business. To elaborate further, here are some pros and cons.
The bulk purchase is the most common way of dealing in a retail business. The profit levels are higher in it. Moreover, you can get better relations with the supplier for long-term business success. If we expand on all the pros and cons, here are some key points.
The most significant advantage of bulk buying is the lowest possible prices you get. When you buy bicycles from a bulk supplier, you get the opportunity to do price locking. Then you can repeat orders at your decided-upon price, which is feasible and cost-effective. The overall shipping cost is very low for bulk buying.
Bulk buying allows bicycle retailers to replenish their stocks. The risk of stockouts is then reduced. Bicycle businesses with high demand can capitalize on it. They will not have to send their customers back because of a stockout problem.
When you choose bulk buying, you get customized service. You can ask your supplier for custom colors, designs, logos, and various features in the bikes. Even the quality of production is consistent in bulk orders. For instance, if a retailer requests a hundred bikes with different customizations in each batch of twenty bikes, the quality will be consistent within each batch.
Purchasing bicycles in bulk provides retailers in Missouri with flexibility in minimum order quantity (MOQ) selection. They can decide whether they want twenty or over a hundred bicycles. Bulk buying allows this kind of flexibility to retailers.
One challenge with bulk buying is that it requires a high investment. Since you are not buying one or a few bicycles but many. It means you will need a high investment to afford those massive orders. It is not feasible for someone who deals in a small number of units.
What if you buy in bulk, only to have a new model launched later? It rarely happens in the bicycle industry because there is not much to add or subtract from bicycles. Yet, at least one percent chance still hovers. If you overstock on bulk buying, and there is a sudden change in the bicycle technology, it will cost you a lot.
Bulk buying is typically conducted with international suppliers. There is a challenge in it, and that is international and political events worldwide. If anything goes wrong between two countries, and you or your supplier has a connection to those countries, it will have adverse effects on your deal.
There is another way, and that is the local sourcing of bicycles. Some retailers prefer to buy from local suppliers to keep the process simple and maintain a direct connection with their customers. They eliminate international trade hassles such as customs clearance and shipping costs. These are some primary reasons they prefer local sourcing.
A local supplier is easily reachable through references and connections. Retailers are familiar with the famous markets and industrial regions in their country for sourcing bicycles. It compels them to choose a supplier because the options are limited.
The transportation cost is low because it does not involve customs and vessel charges. Even if a global bulk supplier offers low prices and costs, there is still some advantage for local sources.
Bicycle retailers choose local suppliers also because they do not want to get involved in legal processes. These processes occur in the context of international trade. Moreover, there is no language barrier between a local source and retailer. They both belong to the same country and city, which helps them communicate more effectively.
When retailers choose local sourcing, they gain agile supply chains. Again, there is no international shipping time or obstacles. Local supply is shorter and agile, which means bicycle retailers can get quick deliveries.
The labor cost varies by country. Some countries have higher labor costs, and some have very low ones. In this way, the prices could be higher. If a country has higher labor wages, the production cost will be higher. Sourcing bicycles from a local source could be expensive because of this factor.
Local sourcing can offer some advantages in terms of minimum order quantities (MOQs). Since the production size is lower than that of most global suppliers, retailers can find smaller minimum order quantities (MOQs). However, the customization is low. Retailers cannot choose much customization, except for colors and stickers, unlike a global supplier.
Some economies are not very strong, and this affects their industries. Local sourcing can have disruptions in production and distribution. Damaged infrastructure and political challenges could affect the supply even within the country.
When comparing all these factors, bulk buying has more advantages. Since it is about quality, price, and timely service, bulk buying is more suitable for these benefits. In this case, a bulk supplier might be more beneficial for retailers.
