How do you negotiate with distributors/wholesalers on prices when your a new business looking to grow and they won't help?
First, I am dealing with one of largest distributors in the world and they hold many lines that others do not supply and second, they tend to charge higher prices than everyone else!
Certain manufacturers even state that they don't understand the distributors pricing and they cannot do anything about it!
As an example, a product has a MSRP/RRP of £929.99 and the price you have to pay the distributor is £845.99 which could make you £84.00 or approx. 10% profit but you may want to sell this product lower than the RRP leaving you a lower profit margin.
Does this profit margin seem low for such a high priced product which gives the distributor more profit?
Due to customer demands for certain products that offer low profit margins, is it worth dealing in these products, especially if you only sell one and what if you buy stock and get stuck with it and it doesn't sell?
For a new business looking to grow and introduce many new lines to customers, it is very difficult to purchase large quantities of stock due to low capital and storage space at present and the prices may come down if larger orders were placed.
It's a pity distributors don't help new businesses as much as existing businesses to build better working relationships because isn't building businesses better for all parties and for the economy?
Better prices from distributors/wholesalers means better profits and better prices for the customers but if the profit margins are too low, is it just a waste of time trying to sell these products?
More sales and more customers means more sales and more orders for stock but I don't want to wait yeas to build the business just to get better deals!
Buying direct from the manufactures is an option but they require higher quantity orders plus many will not deal with online stores plus there's the shipping and import costs to consider!
It's tough but it's also great to learn about growing a business and more funding is needed but that's another story which is even tougher!
Steve Jarvis | Proprietor/ Owner Of Figureland www.figureland.co.uk Tweet & Follow: @FigurelandUK Call During Opening Hours Mon-Fri 9am - 5.30pm Tel: 01895 349595 Email: firstname.lastname@example.org