Businesses in the food and restaurant industry often benefit from buying in bulk. This practice guarantees lower prices and is optimal if the business has good storage options. When it comes to wholesale grains, it makes sense to buy large quantities. These products are often traded on futures contracts by wholesalers and other intermediary traders. Companies that need large quantities, like animal feed manufacturers, will find suppliers and buy wholesale products like grains for their mills. In this article, we’ll discuss the pros and cons to buy bulk grains, how your business can profit from it, and where to conduct these trades.
Where to Buy Grains in Bulk?
There are several places where businesses buy grains in large quantities. Recently, more and more trades are happening online. That is why producers that want to sell bulk grains are investing more and more in their eCommerce and digital marketing. This way, they are also not dependent on intermediaries. Here are the main places where you can buy bulk grains.
Wholesale Markets
Local wholesale markets attract a lot of businesses looking to buy bulk grains and other products. The reason why a lot of companies prefer to buy from these markets instead of online is that they can check the quality of the products. Furthermore, wholesale markets allow buyers to negotiate prices with sellers. So, if you’re a good negotiator, consider this to be the right place to buy bulk grains.
Grain Cooperatives
According to a 2017 census of agriculture, there are more than two million farms in the US. A lot of the farm owners offer their products at grain cooperatives. If you’re looking for competitive prices, assurances, and supporting local and individual farmers, these cooperatives are the right option.
Importers
As labor in other countries can be much cheaper, many importers ship grains to the US. Furthermore, some grains require a specific climate that can’t be found in the United States. These exotic types of grains are imported. One thing to keep in mind when you buy bulk grains from importers is that they usually do business with companies that require larger quantities.
Grain Suppliers
As the US food processing market is very large, there are numerous intermediary businesses. Grain suppliers are a good example of such an enterprise. They serve companies that are looking to buy bulk grains and arrange the logistics. That way, you don’t need to search for the right producers, negotiate the price with them, look for transportation, etc. You just need to pay and the grains are delivered to your business.
Online Marketplaces
In the last decade, online sales have skyrocketed. That is the case for grains as well. Marketplaces online offer a variety of products for food manufacturers and other businesses interested to buy bulk grains. One of the main benefits of shopping online is that you can compare prices and have a wide selection of products with just a few clicks.
Key takeaway: There are multiple places to buy wholesale grains. Each of them has its advantages. Consider the pros and cons of buying bulk quantities of grains as it’s not suitable for every business.
Pros of Buying Bulk Grains
There are numerous benefits to buy bulk grains. However, this is not suitable for every business. After we show the list of pros, we’ll go over the list of cons of buying large quantities of grains. Here are some of the advantages:
- Better price. Usually, buying in bulk means lower prices. This can help businesses maximize profit margins. This is probably the main benefit of bulk buying - wholesale prices are lower than retail ones.
- Consistency. Companies that require a lot of grains for their manufacturing process need to be certain that there’s a consistency of this material. Otherwise, they might need to stop the whole production process which results in big losses.
- Customization options. If you are a large client, wholesalers would want to keep doing business with you. Therefore, you can get additional discounts or other perks. Such privileges can be the chance to select the types of grains, the quality, the packaging, or how and when it is delivered.
- Sustainability and eco-friendliness. Refined and whole grains are packaged in small quantities for retail customers. However, when you buy bulk, there is little to no packaging. This reduces the environmental impact and the generated waste.
Cons of Buying Bulk Grains
There are several disadvantages to buying bulk grains. The main ones are:
- Grain storage. Buying large quantities means you need to have a lot of storage space. Furthermore, businesses often might need multiple types of grains and other materials needed for their manufacturing process. This means even more space is required. If your business isn’t large enough, perhaps buying smaller quantities can be more beneficial, even if the price is slightly higher.
- Big investment. If you plan to buy bulk grains, keep in mind that this can be quite an expense. Yes, this is an investment for the future manufacturing of your company, but consider the opportunity cost.
- Quality. You need to carefully assess the quality of the grains purchased. With larger quantities, it might be hard to do so.
- Shelf life. Grains can get spoiled or contaminated with pests if they stay in storage for too long. Additionally, some types of grains need to be stored under specific temperature and humidity conditions.
- Transportation and operations. Trucks, trailers, shipping containers, and other special equipment are needed to transport bulk quantities of grains.
Selling Bulk Grains
As previously mentioned, the US is a gigantic market and the food manufacturing industry is very well developed. That’s why there are grain suppliers that act as middlemen between producers and retail clients. A lot of businesses buy bulk grains just to sell them in smaller quantities.
If you’re planning to start such a business, here are some tips:
- Add value. This can either be packaging or arranging transportation for your clients.
- Don’t sell all types of grains. Instead, focus on the ones that have better profit margins or are easier to store. Also, most grains have seasonality and their off-season prices are higher.
- Consider dropshipping. The dropshipping model is suitable for selling grains too. You can set up eCommerce solutions and find reliable producers. This way, you’ll act as an intermediary but you don’t need to make big investments in storage. Keep in mind that such a business will be harder to automize compared to other dropshipping websites.
Frequently Asked Questions about Buying Wholesale Grains
If you are searching for where to buy grains in bulk, you might have some questions on the matter. Allow us to answer some of the popular ones.
What Are the Most Popular Types of Grains
According to customer data, wheat, rice, oats, and corn are the most popular grains in the world. Most people have heard about whole and refined grains. Whole grains are things like brown rice, quinoa, wheat, and rye. On the other hand, refined grains are the ones where only the interior of the grain is left. Like white rice for example. Flours are also refined grains. Whole grains are considered more healthy as they have a higher fiber content. That’s why many people enjoy a whole grain breakfast.
Is Starting a Wholesale Grains Business Profitable?
Yes, starting a wholesale grains business can be profitable. However, to become a successful business owner, you need to research the market, check the competition, find the right growth opportunities, and create a good business plan with all potential troubles. Keep in mind that a wholesale grains business can require a big investment.
What to Look for When Buying Bulk Grains?
If you’re planning to buy bulk grains online, make sure you get assurances or guarantees related to their quality. Additionally, do a thorough research on the price, and the storage conditions.