The solar sector is widely renowned for its long-standing partnerships. As industry experts, you’ve most likely worked hard to establish and maintain relationships with wholesale suppliers.
But are your distribution channels truly serving your company and clients to the best of their abilities? Have you discovered any gaps in your strategic partnerships? Or have you identified barriers that are costing you potential sales?
Even if you’re confident in your logistics, you should double-check your assumptions. Taking the effort to assess your processes may reveal costs and alternatives that you were unaware of.
In summary, when you purchase solar hardware from a wholesaler, you are getting reduced products in large quantities to resale at a higher price.
The more your order size, the greater your savings. You take the large inventory and portion it out into small batches to resell. The price you obtained should allow you to add the profit margin.
The gap between your markup and wholesale values determines your profitability, which varies depending on system scale, market prices, competitive landscape, import tariffs, government incentives, and product life cycle. The margin, often known as gross profit, is the sum of money earned from a sale.
The average market margin is 7%, which includes hardware, installation manpower, EPC expense, developer overhead, and so on.
Wholesalers typically need a minimum quantity order. This is normal for best-selling items. However, if parts are discontinued or manufacturers can assist in locating alternative parts, you may be able to make purchases for lower quantities.
Bear in mind that wholesalers are experts in distribution, regardless of their business strategies. This primary expertise makes them appealing to manufacturers who want to sell their brands yet prefer to focus on product development.
In addition to wholesalers, there are agent wholesalers. They do not own the inventory but instead represent manufacturers and other suppliers. They help with transactions such as receiving orders, negotiating contracts, organizing deliveries, and collecting payments.
Then there are resellers, who buy things from a range of suppliers, including manufacturers, various wholesalers, liquidators, and even contractors with surplus material. They may also collaborate with solar technology brokers to buy and sell items.