What does wholesale mean, and how can companies charge a lower price per item because of it?

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What does wholesale mean, and how can companies charge a lower price per item because of it?

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14 Answers

Anonymous 0 Comments

Wholesale means supplying your product to someone who will then sell it on to the wider market. You can justify the lower price on the back of increased unit sales overall and reduced logistical costs such as transport, wages, postage/packaging etc.

Anonymous 0 Comments

Shops sell 1 bottle of fizzy pop at a time for $1 a bottle retail price, to sell 100 bottles requires 100 transactions each for $1 a time which costs the shop in staff time and other expenses. Wholesaler sells 100 bottles of fizzy pop in a single transaction for 90 cents per bottle or $90 for the 100 bottles in a single transaction, a lot less staff costs involved even though they take in less money they might make more profit.

Anonymous 0 Comments

Shops sell 1 bottle of fizzy pop at a time for $1 a bottle retail price, to sell 100 bottles requires 100 transactions each for $1 a time which costs the shop in staff time and other expenses. Wholesaler sells 100 bottles of fizzy pop in a single transaction for 90 cents per bottle or $90 for the 100 bottles in a single transaction, a lot less staff costs involved even though they take in less money they might make more profit.

Anonymous 0 Comments

Wholesale means supplying your product to someone who will then sell it on to the wider market. You can justify the lower price on the back of increased unit sales overall and reduced logistical costs such as transport, wages, postage/packaging etc.

Anonymous 0 Comments

Wholesale is the price a manufacturer uses to sell products to distributors and/or retailers. It is the base price of raw materials, labor, overhead, and desired profit margin *for the producer*. Retailers and distributors then mark that price upwards to reflect their costs and required profits for onward sale to consumers. There are other ways to determine “retail” pricing, but that’s the basic model.

Anonymous 0 Comments

Wholesale is the price a manufacturer uses to sell products to distributors and/or retailers. It is the base price of raw materials, labor, overhead, and desired profit margin *for the producer*. Retailers and distributors then mark that price upwards to reflect their costs and required profits for onward sale to consumers. There are other ways to determine “retail” pricing, but that’s the basic model.

Anonymous 0 Comments

Wholesale originates selling the whole case or pallette rather than individual items, basically. Mostly it originally applied to buying in large quantities to break the package and sell individually at a higher per item profit. So like…a comvenience store owner could buy a case of sodas at a unit cost of .50 per drink. They break the case, spend the time stocking them into fridges and sell for 1.00 each. They did other B2B stuff, too. If you’ve got a whole hotel or office building to stock the restrooms for, you don’t want to be buying personal use quantities of soap or toilet paper. You need that stuff by the case if not the pallette.

The big box store he buys from specializes in logistics and scale. They may sell their sodas for less each, but if they’re supplying cases to a pile of convenience stores, concessions stands and so on they get to sell a lot more sodas than anyone else does. They also don’t have to ship to inconvenient locations, spend wage hours breaking down or selling individual items, don’t need as many employees working per item sold, can build their big ass store in a less expensive area since they’re not worried about being convenient to the general public, etc…etc….

At some point folks that went through a lot of stuff figured out they could pay less per unit, especially for nonperishable goods they could load up on occasionally, if they went straight to suppliers like that instead of buying from their local grocer or whatever. Thus was born the Costco/Sam’s model. They still sell to local businesses, but many of their members are just people who are happy to six months worth of toilet paper or cokes, or whatever at a time in order to save money on it.

It’s a bit like buying straight from your grocer’s distribution center. They don’t have to pay for the last mile shipping and stocking of the product, you get a slice of their savings on that as savings in the cost of the items.

Anonymous 0 Comments

Wholesale originates selling the whole case or pallette rather than individual items, basically. Mostly it originally applied to buying in large quantities to break the package and sell individually at a higher per item profit. So like…a comvenience store owner could buy a case of sodas at a unit cost of .50 per drink. They break the case, spend the time stocking them into fridges and sell for 1.00 each. They did other B2B stuff, too. If you’ve got a whole hotel or office building to stock the restrooms for, you don’t want to be buying personal use quantities of soap or toilet paper. You need that stuff by the case if not the pallette.

The big box store he buys from specializes in logistics and scale. They may sell their sodas for less each, but if they’re supplying cases to a pile of convenience stores, concessions stands and so on they get to sell a lot more sodas than anyone else does. They also don’t have to ship to inconvenient locations, spend wage hours breaking down or selling individual items, don’t need as many employees working per item sold, can build their big ass store in a less expensive area since they’re not worried about being convenient to the general public, etc…etc….

At some point folks that went through a lot of stuff figured out they could pay less per unit, especially for nonperishable goods they could load up on occasionally, if they went straight to suppliers like that instead of buying from their local grocer or whatever. Thus was born the Costco/Sam’s model. They still sell to local businesses, but many of their members are just people who are happy to six months worth of toilet paper or cokes, or whatever at a time in order to save money on it.

It’s a bit like buying straight from your grocer’s distribution center. They don’t have to pay for the last mile shipping and stocking of the product, you get a slice of their savings on that as savings in the cost of the items.

Anonymous 0 Comments

Wholesale is the price that retailers pay for items they sell. When you buy a can of soup or a t-shirt, the store you are buying it from paid something like half of what you pay for it. The wholesale price of that can of soup is $1, and you pay $1.99 for it at the grocery store; the store pays the t-shirt brand $12 for the shirt they sell for $24. That markup covers the store’s rent and utilities, the store workers’ wages, advertising, discounts/coupons and shoplifting loss, plus the retailers’ profits. Typically, mark-up is about 100%, but once all those other expenses are covered, retailers have profits of 5-10% (and typically only 2-3% for grocery stores).

Because there is that spread, there may be ways that some companies find ways to pass along less mark-up to offer “wholesale” pricing. Or maybe they are able to sell a product at cost because they make revenue/profit elsewhere… maybe a plumber sells a customer a hot water heater “at cost” of $500, but charges another $500 in labor to install it, while paying the plumber who installs it $25/hr for the 2 hours it took to install.

Anonymous 0 Comments

Wholesale is the price that retailers pay for items they sell. When you buy a can of soup or a t-shirt, the store you are buying it from paid something like half of what you pay for it. The wholesale price of that can of soup is $1, and you pay $1.99 for it at the grocery store; the store pays the t-shirt brand $12 for the shirt they sell for $24. That markup covers the store’s rent and utilities, the store workers’ wages, advertising, discounts/coupons and shoplifting loss, plus the retailers’ profits. Typically, mark-up is about 100%, but once all those other expenses are covered, retailers have profits of 5-10% (and typically only 2-3% for grocery stores).

Because there is that spread, there may be ways that some companies find ways to pass along less mark-up to offer “wholesale” pricing. Or maybe they are able to sell a product at cost because they make revenue/profit elsewhere… maybe a plumber sells a customer a hot water heater “at cost” of $500, but charges another $500 in labor to install it, while paying the plumber who installs it $25/hr for the 2 hours it took to install.