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There are thousands of websites out there claiming to offer
products for sale at “wholesale price”.
Unfortunately, the vast majority of such offers are simply
dishonest. What they are in fact offering are products at
often grossly inflated prices. The starting wholesale price
has been inflated several times depending on how many layers
of middlemen there are between you and the original
wholesaler.
If there are 3 middlemen – not uncommon – and each wants a
10% commission, then a genuine wholesale price of $100 would
now be $133, a 33% increase.
If the middlemen were content with a 5% commission, this
would still represent a 15% plus increase over genuine
wholesale price.
The net result is that you simply cannot re-sell any
product, bought in this way, for a profit – as many
unfortunate newcomers find to their cost.
Here’s how genuine wholesale price is determined.
The manufacturer of a product sets its wholesale price.
This is the price at which an official distributor or
wholesaler should sell the product on in bulk to the
retailer. And this is done so that each of the official
distributors/wholesalers can compete fairly with one
another.
The official distributor/wholesaler buys his large volume
stock from the manufacturer at less than wholesale price. He
buys at Distributor’s Wholesale Price, which might typically
be around 8% below wholesale price.
This 8% represents the distributor’s margin, out of which he
has to provide, man, and service his warehouse.
The Distributor’s wholesale price is available only to
manufacturer or factory authorised wholesale suppliers.
You can only buy from an official distributor/wholesaler if
you are a legitimate business(Tax ID etc.), and if you buy
in bulk.
If a distributor/wholesaler is prepared to sell to you in
smaller lots, then he will have to charge you over and above
the wholesale price to cover the additional handling
charges.
So, if you’re serious about selling product in volume, get
yourself a business identity, and deal only with a factory
approved wholesale supplier.
Learn more about how to find genuine wholesalers and dropshippers.
