Profits are made in buying, not in selling. (2024)

Profits are made in buying, not in selling. (1)

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Jinu Nair Profits are made in buying, not in selling. (2)

Jinu Nair

Top Voice - New Vendor Development | Product Manager | Driving Innovation & Growth through Strategic Product Development & Management | Product Sourcing & Procurement | Passionate about Delivering Impactful Products.

Published Jul 7, 2023

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The statement "the profit is in buying, not selling,highlights the importance of obtaining products at a favorable price during the sourcing process. It suggests that securing products at a low cost provides greater potential for profit when those products are eventually sold.

In many business models, the price at which you acquire goods or products plays a significant role in determining your profit margin. If you can negotiate a lower purchase price or find a reliable source that offers competitive prices, it can positively impact your overall profitability. When you buy products at a lower cost, you have more flexibility in setting your selling price. This allows you to either offer competitive prices to attract customers or maintain higher profit margins compared to competitors who may have acquired the same products at a higher cost. Furthermore, buying products at a lower price can also provide opportunities for various pricing strategies, such as offering discounts or running promotions, while still maintaining a satisfactory profit margin.

Here's an explanation of why the statement holds true:

  1. Lower purchase cost: By negotiating favorable deals, sourcing products at a lower cost allows for higher profit margins when selling those products. When you acquire products at a lower price, you have more flexibility in setting competitive prices while still maintaining a healthy profit.
  2. Competitive advantage: Obtaining products at a lower cost gives you a competitive advantage in the market. It allows you to offer more attractive prices to customers while still making a profit, which can help you win over customers and gain market share.
  3. Increased flexibility: Buying products at a low cost provides flexibility in pricing strategies. You can choose to lower prices to attract customers during promotional periods, offer discounts, or run sales campaigns without compromising your profitability. This flexibility helps generate more sales and customer loyalty.
  4. Mitigating risks: By focusing on purchasing, you can mitigate risks associated with uncertain demand or market fluctuations. If you've acquired products at a favorable cost, you have more room to adjust prices and respond to market changes without experiencing significant losses.
  5. Scalability: With a profitable sourcing strategy, you can scale your business more effectively. When you consistently secure products at a lower cost, you can expand your inventory, reach a larger customer base, and potentially increase overall sales and profits.

Ultimately, the profit in product sourcing comes from a combination of strategic buying and effective selling practices.



1 Comment

Tim Cumming

Beautiful B2B video + A.I. = your best leads |


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Nice summary Jinu Nair - how far does this stretch into services would you say?

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Profits are made in buying, not in selling. (2024)


Profits are made in buying, not in selling.? ›

The statement "the profit is in buying, not selling,highlights the importance of obtaining products at a favorable price during the sourcing process. It suggests that securing products at a low cost provides greater potential for profit when those products are eventually sold.

Is profit made when you buy? ›

A common saying in the real estate industry is: 'Money is made when you buy, not when you sell'. Basically it means that the price you pay for a property is the major factor determining your profit later on.

What is it called when you buy something and sell it for profit? ›

A reseller is an individual person or business that buys a product, marks up the price and sells it for a profit. It's the middle-men between manufacturers and customers. Resellers can be 4 different people: Distributor: Buys a product from the manufacturer and resells to either a wholesaler or retailer.

What is buying and selling for profit? ›

It involves purchasing products or services (often in bulk or at a low price) and selling them to consumers at a higher price to gain a profit. This fundamental principle applies across different platforms and industries, from physical retail stores to online marketplaces and trading in the stock market.

What does it mean to make money on the buy? ›

The single most important phrase in the real estate investment business is “You Make Your Money on the Buy.” This means the profitability of a deal is actually determined before you close on the property, not when you start managing it.

What makes a profit? ›

Profit describes the financial benefit realized when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question.

What is the term for profit made from selling? ›

A capital gain refers to the increase in the value of a capital asset when it is sold. Put simply, a capital gain occurs when you sell an asset for more than what you originally paid for it.

What is a better word for buying and selling? ›

Synonyms: vend, retail , deal in, peddle, hawk , put sth up for sale, market , trade in, auction , auction off, wholesale , turn sth into money (informal), be in the sth business.

What is buying and selling of goods in order to make profit called? ›

The correct option is B Trade. Trade is the art of buying and selling goods and services. It helps people to make money. It can be done within a country as well as with other countries of the world.

What is the term for buying low and selling high? ›

Definitions of arbitrage. a kind of hedged investment meant to capture slight differences in price; when there is a difference in the price of something on two different markets the arbitrageur simultaneously buys at the lower price and sells at the higher price.

How to buy and sell for a profit? ›

As a general rule, you want to buy low and sell higher. This means buy your product at the lowest price possible and sell it for the highest price possible. This lets you make the most money.

What is the best product to buy and sell? ›

Electronics, beauty products, and fashion accessories are among the most profitable items to sell online that are not too bulky and used daily. That's not true. The markup on these items is often very small if you want to be competitive.

What is profit to sell? ›

Profit is the difference between the total revenue (selling price) generated from the sales of goods or services and the total costs (cost price) incurred to produce or deliver them. Profit can be calculated when the selling price is greater than the cost price.

Can you make money buying and selling money? ›

Key Takeaways. It is possible to make money trading money when the prices of foreign currencies rise and fall. Currencies are traded in pairs. Buying and selling currency can be very profitable for active traders because of low trading costs, diverse markets, and the availability of high leverage.

What does buying or selling mean? ›

Selling is the action taken by the seller or vendor to offer products or services, whereas buying is the action taken by the buyer or consumer to acquire those products or services. In a transaction, there is typically a seller and a buyer involved, each with their respective roles and responsibilities.

Have enough money to buy or pay for something? ›

To afford means you have enough money or time for something.

How are profits paid out? ›

Profit distributions to stockholders are called dividends. Dividends must be distributed in equal amounts per share. Most small corporations have one class of stock, called common stock, so all stockholders get the same dividend distribution at the same time.

What is considered profit? ›

Profit is simply total revenue minus total expenses. It tells you how much your business earned after costs. Since the primary goal of any business is to earn money, profit is a clear indication of how your company is functioning and performing in the market.

Is profit the money you make? ›

Profit is the amount of income that remains after accounting for all expenses, debts, additional income streams, and operating costs. While revenue and profit both refer to money a company earns, it's possible for a company to generate revenue but have a net loss.

How do you know when you made a profit? ›

The definition of profitability in accounting is when a company's total income is more than its total expenses. According to Iowa State University, this number is net profit or income minus expenses.


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