Early on its a huge mistake. If you spam prepared meals (trap components, gold/platinum furniture, decorate with gems, etc) you'll trigger a massive population boom. When you buy out the dwarven caravan, or at least make a -very- strong showing, it encourages migration. You can go from being ~15 strong when the caravan leaves to ~100 by the next summer. Since you've tipped that 80 mark so soon, you are barely a year into your fortress and already getting hit by sieges and megabeast attacks. So, not only are you 50 short on bedrooms and possibly stripping your food supplies bear, but you don't have proper defenses set up yet alone a proper military.
If you are going to push wealth early, it better be in cold hard steel. At the very least get a bridge set up to seal off your fortress and a civilian alert set up in your dining room. Cage traps are definitely overpowered and on the exploity side- Ginormous bronze colossi and FIRE BREATHING dragons shouldn't be foiled by some rickety wooden trap. The same wood that mighty hamsters defeat in weeks! However, you can set up pit traps and other less OP defenses easily enough. These just need to start asap.
Later on? Hell do whatever you want. If you have an established fort, a caravan will never bring anything useful except the occasional breeding pair of awesome from the elves or some bits of metal/flux stone you lack for your military. As has been stated, the more profit a caravan leaves with the larger it's showing next year. So if you are chasing specific materials, then buying out the caravan one year should encourage them to bring more of everything the next. However, if you don't want them to waste space (there are weight limits), you need to make sure you have enough food/cloth/wood stockpiles. I think its 5 food, 2 cloth, 1 log? Its on the wiki. Conversely, you can trick the caravans into bringing more if you just forbid -most- (I don't recommend forbidding all your food >.>) of the relevant stocks in the first few weeks of a caravan season. I find textiles a chore, so I love it when they bring bins of (preferably leather) for use.