Wholesale Is Free

Most people don’t consider that wholesale is free. There is a good argument that it isn’t; especially since a wholesale price is a price after all. However, there are some special aspects about wholesale that are worth mentioning, especially in relation to Arbitrage, which is free.

Is Wholesale Actually Free?

Since you have to pay for the items to get them, even if you’re paying wholesale prices, it’s not actually free. However, the final result once you buy products wholesale and sell them retail is a net profit, which is technically free; especially if you have passive cash flow from your business.

Wholesale can be free when the wholesale price is $0, or when the product your selling is free. See Sell Stuff For Cash for resources to sell items that you can get for free. However, that’s not the main point of this page.

What especially makes wholesale free is when you have the buyers lined up at the same time that you purchase the wholesale products. It’s when you make money on the buy that makes wholesale free. You don’t get to keep any of the products in this case, but you’re making money with very little risk.

Wholesale Vs Arbitrage

The more wholesale is discussed, the more it begins to sound like arbitrage, which is also free. Sometimes they are the same, sometimes there are minor differences. They both involve buying something at a discount price and then selling it to a buyer at full price. Arbitrage is usually the process of buying in one market and selling for a profit in another market. But when you think about it, so is wholesaling. There is a wholesale market and a retail market, which are two different markets, so technically wholesaling can be considered arbitrage.

The most common difference is that wholesaling usually involves buying in bulk and selling the items individually. The bulk discount is the wholesale price and the price for the individual item is the retail price. Arbitrage might involve buying the bulk lot and selling the entire lot for a profit all at once. Arbitrage might also be buying the lot, keeping a few items, and then selling the lot for the same price as you bought it. See eBay Lot Freebies. Up-trading is also an arbitrage process that makes arbitrage free.

Wholesaling and arbitrage become more the of the same thing as the lot becomes smaller and smaller or when two different markets are used to make the profit.

Wholesale Is Free

Once again, wholesale becomes free once you arrange the deal so that you make your money at the same time that you buy what you’re selling. This means that you’ll have the buyer lined up at the time you’re buying the product. You could even have the buyer pay you for the product before you buy it. That way you don’t even have to pay money out-of-pocket. The buyer paid you first, you use that money to buy the product wholesale, then you deliver the product and keep the difference. This is actually free.

This could technically be applied for any product or service. However, real estate investors demonstrate the “wholesale is free” principle all the time. They look for distressed properties and offer to buy them at wholesale prices. (Only when the property or the property owner is in distress or in need of repair would the owner consider selling at a low price). If the owner agrees to sell then the investor puts the property under contract which includes an inspection period of about 2 weeks. The investor has a network of buyers lined up who would be interested in the property based on the numbers alone. Some of them will even buy the property sight unseen because they don’t plan to live there. A good investor will already have the property sold before the inspection period ends. The new buyer pays for the house and the investor keeps the difference between the wholesale and retail price, without having to pay anything out-of-pocket.