Hypothetical example: 5,000 units at $8.00 versus 2,000 units at $9.50
| Item | Smaller order | Bulk order |
|---|---|---|
| Goods | $19,000 | $40,000 |
| Freight | $1,000 | $2,400 |
| Landed cost (per unit) | $20,000 ($10.00) | $42,400 ($8.48) |
| Cash used / funded | $20,000 / $0 | $20,000 / $22,400 |
| Hypothetical funding cost | $0 | $2,240 |
| Storage per month | $100 | $250 |
| Full sell-out at $16 and 500 units a month | 4 months, profit $11,600 | 10 months, profit $32,860 |
| Slow case: 3,000 units sell in 6 months | Sold out by month 4 | Profit $1,860, 2,000 units unsold |
Hypothetical figures with $30,000 cash and a $10,000 reserve target. The funded repayment of $24,640 is assumed, so use the numbers in your own written offer.
How do unit price tiers compare?
Compare the tiers on landed cost per unit, which includes freight, because the cheaper unit price can shrink once shipping is added.
The example's bulk price is $8.00 against $9.50, a gap of $1.50 a unit. After freight, the landed figures are $8.48 and $10.00, so the saving is $1.52 a unit. At $16 retail, the bulk margin is $7.52 against $6.00 on the smaller order.
Ask for every tier, not just the two you are considering. A middle tier, for instance 3,000 units, sometimes captures most of the saving with far less stock. The bulk inventory purchase guide explains how to read supplier quotes.
What do carrying and freight add?
Carrying costs grow with both the amount of stock and the time it sits, so a big order held for ten months can cost several times what a small order costs.
In the example, storage is $250 a month for the bulk lot against $100 for the smaller one. Over ten months, that is $2,500. Add insurance, shrinkage, handling and any markdowns if the product ages, and the bulk saving narrows.
Freight is the other line to check: a full container or pallet load may cost less per unit, which helps the bulk case, but only if the goods can be received and stored without extra rental space.
What does the funding cost?
Count the funding cost in dollars: total repayment minus cash received, and put that figure into the bulk column.
The bulk order is $42,400 landed. With $20,000 of usable cash, the example funds $22,400 and assumes a repayment of $24,640, which is a $2,240 cost. It could be paid as four payments of $6,160. Your real offer will differ; rate, term and schedule vary by product and by the strength of the business.
A line of credit for buying opportunities may suit owners who buy in bulk repeatedly, since you draw only what a given deal needs. Review the credit line for supplier deals page for how that works.
Before you accept any offer, read the written terms for the payment schedule and any fees, and ask your accountant how the purchase should be recorded. Then put the real repayment figure into the bulk column and rerun the comparison, since a small change in cost can move the break-even point.
Where is the break-even point, and what about the reserve?
Break-even is total cost divided by sale price per unit; if your realistic sales fall short of it within your holding window, take the smaller order.
If all 5,000 units sell over ten months, bulk costs $42,400 + $2,240 + $2,500 = $47,140. Divided by $16, break-even is 2,947 units, so you need to sell a bit under 60% of the lot just to recover costs. In the slow case, 3,000 units sell in six months: revenue is $48,000, cost is $46,140 and profit is only $1,860, while 2,000 units, worth $16,960 at cost, remain on the shelf.
Cash matters as much as profit. Both choices keep the $10,000 reserve, but the bulk order commits repayment of $24,640 while stock still sits unsold.
How should you decide and apply?
Choose bulk when profit stays positive in your slow case and the repayment fits your monthly cash flow; otherwise choose the smaller order and reorder.
Bring both supplier quotes, your sales history by product and recent bank statements. Funders typically give a decision within 24 hours of a complete application, and there is no obligation to accept. When you have run the comparison, apply online and describe the order and your deadline.
Frequently asked questions
Is a bulk discount always worth taking?
No. It pays off only when the stock sells within a window you can fund. In the slow case here, the bulk order barely breaks even while 2,000 units remain, so the discount can be a poor deal.
How do I count unsold stock?
Value it at landed cost and treat it as tied-up cash, not profit. Then ask whether you could sell it at a markdown and what that does to your margin.
Should funding cost be shown as a rate?
Compare it in dollars: total repayment minus cash received. That makes the cost easy to put beside storage, freight and the price saving.
What if I buy in bulk often?
A revolving credit line can fit repeat buying, because you draw for each deal. Terms vary by product and by the strength of the business.
Can I apply before choosing an order size?
Yes. Describe both quotes and the deadline, and the funder can review the file. Checking options does not affect your personal credit score.
Describe your purchase and deadline
Share both quotes and your timeline in one application.
Updated October 17, 2026 · Prime Funding Now Funding Team