What are Wholesale Prices?

When you hear the words "wholesale price" do you  expect to see  50% off the retail price? It's no surprise if you do, as there are so many sources out there telling us that this is what wholesale is. For example, electronics stores selling  consumer products  make as little as 10% from each sale. It's the same for a lot of designer cosmetics. Just because you find a supplier to sell wholesale products, doesn't mean you're going to get a huge discount.  Usually, retail profit is made by taking a small profit from many sales.  If you would like to clear up a few things about what wholesale price really means, read on as I show you the real ins and outs of wholesale pricing, as well as how to ensure you are always paying the true wholesale price when you buy in bulk!

How is a wholesale price calculated?

It's really not that complicated:  wholesale pricing  is based on four different factors:

  • The commodity price. e.g. the price of the raw materials which are used to produce the product.
  • The manufacturing costs (including labor)
  • The packaging costs
  • And finally, the amount of profit the wholesaler takes  .

Why do wholesale costs vary so much?

Quite simply because the costs above can vary greatly from product to product . For example, an item which requires very little  skilled  human labor will cost more than an item that's pumped out from a conveyor line.  Likewise, a plastic bottle with the main raw material being petroleum will cost much less than a ring made from gold. Surprisingly though, a cheaper item made from plastic will often have a higher percentage mark-up than a luxury item such as a bottle of perfume .

How can you be sure that a supplier has true wholesale prices?

To get true wholesale prices, you need to buy from a true wholesaler. In order to be able to sell at or below wholesale prices, a supplier must be a well established wholesaler with a proper business set up (with a business license and tax ID) . The only way a supplier can sell to you at a price that is truly wholesale is if they buy from a manufacturer in massive bulk.

The difference between a true wholesaler and a  middleman  lies in who they buy from, and how much they spend. A true wholesaler will invest  many  thousands of dollars at a time when buying from a manufacturer . A fake wholesaler will buy from larger wholesalers in medium to light bulk and therefore, they won't get items at the best possible prices and be able to pass them on to you, the retailer at the best price possible.
Unfortunately, many retailers are fooled by individuals acting as wholesalers when really they are simply middlemen who don't have the money or the contacts to invest in huge bulk.

To really ensure that you are only dealing with true wholesalers you need to make sure  they are a trustworthy business  . The best way to do this is to access supplier databases from trusted sources. You can find these online by Googling "wholesale supplier directory". Most directories will charge a  subscription  fee, but this is worth it as it can save you a lot of money by preventing you from being scammed in the future.  You should also do your own due diligence and fully research any company before you get involved with them.  SellWholesale.com also has some good reviews of wholesale sources, and this is a good place to begin your wholesale research.

Why Good Design is the Life Force of Profitable E-Commerce Sites

So you have a great range of products you can’t wait to show the world and just as soon as your new website is up and running you can start getting rich. After all you just need to do is throw it up using a free or cheap template and then sit back and collect […]

Read More
How to Make E-Commerce Profit From Overseas Customers

While we all love the ease of selling stuff in our own country and indeed some of us may even be confirmed Euro-sceptics, there is no doubt that a sale is a sale and in the end once someone takes their credit card out to buy something, no-one much cares where the customer comes from. […]

Read More
How to Bring the Best E-Commerce Visitors to Your Site

Everyone now knows that, in the main, it is good quality web content that attracts even casual browsers and promoting your site certainly increases the total number of page impressions. But is all the effort it takes really worthwhile? Are sheer numbers of visitors to your site irrelevant? Probably. Unless you attract the right kind […]

Read More
phone-squareenvelope