Do you pay for retail or wholesale or what?
Today there are so many advertisements for purchasing services or products with significant discounts or buying wholesale, or even buying below wholesale. Really? Let's take a look at what exactly is happening in business. First we define the terms.
RETAIL. The final price, usually set by the manufacturer, is charged to the end customer "YOU" when paying at the box office. Whether car, clothing, jewelry, electronic gizmos or groceries. We Americans have become so indoctrinated that we have to pay that price, we don’t even question it.
And when the store puts "SALE", a 10% discount, or 15%, or 25%, or even 50%, we flock to the store to buy. This is a general selling idea. Many of us have become very exhausted when it comes to sales. They sell birthdays, anniversaries, holidays, the end of the month, the end of the year, and so on. D. And so on. These so-called sales have become meaningless today. When a manufacturer introduces a new product for the first time, he is trying to create great enthusiasm for the product, so people will want and want it. Some items will be one of those “I just received it” types. This is a buyers dream.
The pricing structure works as follows. Take a hot item, such as cell phones, iPhone, Blackberry, etc. Although it may have been invented in the United States, it will probably be produced in China, Korea, Mexico or another third world country where wages are about 50 per hour with little or no additional benefits or health benefits.
As an example, we use these numbers. This product costs $ 20 for production and delivery to the United States. The marketing department sets a good selling price for this product to the general public in the amount of $ 95. If they foresee through advanced marketing that the demand for this product will be large, they are likely to present goods for $ 145. They know that between 10% and 15% of the population will pay the price because it is “hot” and want to be the first to have it. When this crowd was sold, the price would drop to $ 119 to get the next package, which did not want to pay $ 145, but buy $ 119. When this crown is planned, then the price will fall to the original price originally planned, $ 95. When most of the US population will buy.
As the market gets saturated, retailers and stores, such as WalMart, are buying huge quantities of millions. They sell it for about $ 70. They probably paid about 35-40 dollars. It is also sold on the Internet, such as eBay, Craigslist and other auction sites, and even stand-alone sites. They advertise a 50% discount or even 60% off retail. But what is the retail price? They probably belong to the original price of 1415 dollars. So 50% is 72.50 US dollars. If they buy it for 30 or 40 dollars, they also get a good profit.
Therefore, when you see a brand new product, especially electronics, save the original advertisements and check in a year or two. And watch the price drop, as I just explained. Now there are many companies that advertise online, and through the Business Opportunities magazines they will create a website for you, and you can sell these products. Some advertise from 50% to 80% of retail sales. Big deal. One of these business opportunities that I heard advertised on the radio, boasted about their setup and for only $ 400 or so, you not only got your own website, but also the right to buy 40%. But 40% of what?
You can probably buy the same at WalMart for a similar price. With an 80% discount, you have a chance for it, but remember that a big surge in sales has already passed. Like the huge wave that the surfer is looking for, it is too late after the wave has passed.
You can commit a murder by stopping early, buying directly from the manufacturer, but you may have to buy thousands, if not hundreds of thousands, to get a good price. It is difficult to compete in consumer products with companies such as WalMart, KMart, Costco, Sams, etc. The secret is to find a product that is not sold in these stores. And it is difficult to do.
Therefore, I return to my original question: how good is this discount? If you are just buying one for yourself, you may overpay $ 20 or $ 30, but be careful if you are tempted to buy in bulk. Know your prices. Before you start working with the product, check it out. Big guys sell it? And what do they charge? Remember the old caution "Buyer Beware."
