how certain distrubutors can sell cheaper than the factory or manufacture price

Question

I recently found a car that a distributor sells cheaper than the official company. How can the distributors in genral afford this decision financially?

In: 69

Answer 1

If you call up my company and need part number 123456, I’m going to quote you $200.

If Bob over at Bob’s Part House calls, he’s ordering 200 of them, so he’s going to get a better deal, let’s say $125.

He’s going to sell it for $175. He makes less per unit, but he’ll sell them quicker than me. I hold less inventory on hand and only have to do one sale, and only support one customer. Sure, I make less per unit, but a lot less headaches for me, so I can focus on making more parts.