By Karen Ali Whitten
How much cash can you really save if you purchase at wholesale rates? To answer this, try to look at the income structure of the retail market.
Most retail shops will mark up the cost of their goods one hundred percent, or double their own price. In this instance, you can clearly save fifty percent of your cash if you make your purchase straight from the wholesale provider, instead of purchasing from the shop. Basically, by purchasing directly from the wholesale supplier, you're not paying any service premium to the retail shop. The retail shop can charge more than the wholesaler as it is more convenient for the purchaser to locate most items in a retail shop than to hunt for a wholesale provider that does not have a principal storefront site in the middle of town.
In addition, many wholesale suppliers will not vend products to an individual buyer; they will only deal with an established industry that will purchase in volume from the wholesaler. Usually the wholesale supplier will have minimum purchase requirements that can be as low as five hundred dollars or as high as twenty thousand dollars. Essentially, most individuals accept retail rates as a fact of life as it takes some additional time and effort to discover how to reach the wholesale provider directly, and in many instances, it is impossible to do business with the wholesaler, unless you are a real business.
Now try to look at the discount pricing structure, which is what most individuals look for in saving their cash. When a shop offers discount rates, they will not mark up the product one hundred percent; they will proffer a discount from the full retail rate of twenty to forty percent. They still have to make an income, so they won't reduce the rate fifty percent, but they're making less of an income in the hopes of getting people to deal with them.
One more point about purchasing from discount shop is that you need to be cautious about how many of their items are actually being offered at discounts. A normal strategy is to attract shoppers into the shop with big discounts of normal retail rates on some popular goods. Then when you're in the shop, many of the other products will be selling at full retail rate. In many instances, you just won't be able to tell if a product in that shop is discounted or full retail, since it is not possible to do price comparisons on each product when you are in the shop itself.
In order to make money in business online, one of the core factors determining this would be the strength of your supply chain.
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