Is My Supplier Ripping Me Off? Understanding Wholesale Pricing
If you want to purchase items wholesale and resell them for a profit on eBay or other web sales channels, then you need genuine wholesale pricing, right? But sometimes you will see items offered for sale at places like eBay and Walmart for less than that "wholesale price" on the price sheet you obtained from the supplier.
What's up with that? Does this mean your supplier is not a real supplier? Are they trying to cheat you? Not necessarily. There are several reasons why a selling price for a product can be lower than your wholesale price.
Wholesale pricing: What factors affects the price?
1. Price levels
As a small or home-based business, you can't always get the best possible pricing levels. Sometimes the pricing is '"stair stepped," meaning that the wholesale price changes depending on the quantity you purchase. For example, a product might cost $50.00 if you buy 1 to 10 pieces, but if you buy 11 to 25 pieces, the price drops to $47.50, and so on.
Sometimes upper pricing levels available to companies like Walmart are simply not made available to small and home-based businesses.
2. Rebates and incentives
Larger companies like Walmart have access to manufacturer rebates and pricing incentives that simply aren't available to small and home-based businesses. These are often financial incentives which allow these companies to sell the products for less than you can buy them for—and still make a profit.
3. Closeouts
Sometimes you will sell products selling for less than wholesale because the seller is trying to close them out. This is particularly prevalent on eBay and can be a factor when researching eBay data. When a seller decides to get rid of a product line, they may mark the product down below cost just to get rid of it and recoup some cash from it.
4. Imports
In the world of imported products, not all wholesale prices are equal. The wholesale supplier you are buying from might actually be one of many importers of the product and each one might set the pricing differently. If this is the case, you can simply try looking to other suppliers of the product.
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Wholesale pricing: Are you getting the best price?
So "wholesale pricing" is somewhat relative because there are various factors that influence selling pricing and profitably on any given product line. You don't always have to have the lowest price to sell a product because there are always other factors in your business (such as the level of customer service you provide and the value you can add to the product).
On the other hand, if too much product is selling at less than wholesale pricing, it might be a product line you want to pass up. As a small or home-based business, you simply can't compete in just any product line. But there are always niche products that have better potential. That's where good research comes in.
For access to hundreds of real wholesale suppliers that are specifically prequalified for small and home-based businesses, see www.WorldwideBrands.com.
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