Knowledge Marketplace
My First Million

My First Million

The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.

Back to Mental Models

Start Retail, Scale Wholesale

Begin with higher-cost retail purchasing to prove demand quickly, then transition to wholesale pricing once model is validated

Decision Rule

If you can make the economics work at retail prices, wholesale will provide massive margin expansion

How It Works

Retail purchasing removes minimum order quantities and upfront capital requirements while testing market demand. Success at retail proves wholesale viability.

Failure Modes

Starting with wholesale before proving demand

Never transitioning to wholesale after proving concept

Underestimating wholesale relationship requirements

Example Decision

Porch pumpkin business starts buying decorations at grocery stores, proves demand with 100 customers, then negotiates directly with pumpkin farms for 50% cost reduction