Hey there,
I have approached a few suppliers about selling their products in my shop and been told that certain products they make can't be made available through a wholesale relationship. I totally respect their position so I'm not asking for ammunition to argue with them. I just want to understand it better.
I understand margin and the difference between wholesale and retail prices. I know the manufacturer has to get a profit, the wholesaler/distributer needs to make a profit, and the retailer (me) does to. So I have the fundamentals. What they've told me is that a product costs too much to manufacture and they haven't been able to build in enough margin for a retailer to also profit. I guess this is a "what the market will bear" kind of situations, but... ?
Say you have a widget that costs $10 to manufacture.
The manufacturer sells it to customers for $15.
They can also sell it wholesale for $12 so that I can sell it for $15, but that would cut their margin so I understand why they don't want to do that.
Or they can sell it wholesale for $15 and I would mark it up to $17.
Why do they think that last sentence scenario is unworkable so decline to sell it wholesale at all?
I have approached a few suppliers about selling their products in my shop and been told that certain products they make can't be made available through a wholesale relationship. I totally respect their position so I'm not asking for ammunition to argue with them. I just want to understand it better.
I understand margin and the difference between wholesale and retail prices. I know the manufacturer has to get a profit, the wholesaler/distributer needs to make a profit, and the retailer (me) does to. So I have the fundamentals. What they've told me is that a product costs too much to manufacture and they haven't been able to build in enough margin for a retailer to also profit. I guess this is a "what the market will bear" kind of situations, but... ?
Say you have a widget that costs $10 to manufacture.
The manufacturer sells it to customers for $15.
They can also sell it wholesale for $12 so that I can sell it for $15, but that would cut their margin so I understand why they don't want to do that.
Or they can sell it wholesale for $15 and I would mark it up to $17.
Why do they think that last sentence scenario is unworkable so decline to sell it wholesale at all?
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