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

It can be a number of things:

1. The distributor is taking less of a profit.

2. The item has been on the lot/warehouse for some time and the costs of keeping it in inventory are increasing. This makes the distributor want to get rid of it in favor of higher margin items.

3. The distributor has local competition that s pushing prices down.

4. The distributor is engaging in a price war. Unlikely for a car, but you can look into diapers .com v amazon for an example.

5. That car has some issue and the distributor is being shady.