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.
Brendan Forde runs website at http://www.wholesale-dropship-researchproduct.com/ , providing resources for online sellers to locate genuine wholesalers and dropshippers and to research products to sell.
