What option do you think is a better purchasing situation to be in when buying products, please explain why?
Option 1: Purchase items in bulk for you can get a discount. They may sit in your inventory for months, or years before they are used, but at least you have them, and you saved money in the long run. Some products you may never be able to sell though.
Option 2: You only purchase the products that you need at that very moment. You won't get a discount, but at least you have no dead inventory sitting there.
Stop guess-timating. Learn how to estimate and make money! $$$
Here is my view. Just recently I was talking with a friend who runs a business and when presented with the opportunity to pay for his insurance for the year in advance for a 10% discount, he did. Then his slow season starts and he can't make the payment for his shop's lease. If he would have paid the monthly insurance payment, he would have been able to make his lease payments.
Ultimately, I think small businesses can run into too many unplanned disasters. Disasters that could be avoided if there was cash in the bank ready to work for you.
So therefore I think it's better to pay as you go and keep as much cash ready for when you need it, cause you never know when something might happen.