I have put together all of the most recent and most interesting discussions on product prices so that you can find all of the information under one post.
But first let us define what retail price is so that we do not confuse ourselves when asking or rather complaining that the wholesale price is too high, when in fact we are seeing the retail price.
What is retails price?
We often see new members questioning some suppliers price being retail. Of course, what most people are doing is comparing that supplier's price with an eBay price (mostly dropshipping price as well). First and foremost, eBay is a wholesale marketplace, the prices there reflect wholesale or below in many cases, they do not reflect true retail price.
Because many sellers there are buying in large volume and selling at very tight margins to compete, hence pushing the sales price extremely close to high volume wholesale purchasing price.
You also have wholesalers themselves using eBay as a market place to shift stock at true high volume wholesale price
One of the most misunderstood reasons is loss-leading
Loss leaders are products being deliberately sold at cost or below cost to get exposure and gain market share.
So you have to take a step back and be careful when comparing a suppliers price with an eBay price without knowing how much that seller actually paid for the product themselves, because there are many different strategies at play with eBay sellers and without knowing all the facts, you end up comparing oranges with lemons and completely misunderstanding the market place and how it is priced.
Why are some supplier prices more expensive than what I can find on eBay itself?
Firstly, it's important to understand that eBay itself is a wholesale marketplace, it's not a retail price market. So most of the prices you will see there reflect the wholesale value of the product or even below that on some products, not the actual retail value of the product that you might pay if you walked into a bricks and mortar store to buy it.
So understanding that point about eBay, it's important to understand why it is a wholesale marketplace.
1. eBay is no longer the smallish community marketplace it started out as, it's now a massively competitive open marketplace that has some major players in the game. You have sellers so well resourced that they can afford to buy products in massive volumes from wholesalers or even manufacturers direct, giving them massive price savings, then sell at very low margins to keep the market tight and dominate it, while making their profit through high turnover.
2. You also have a situation where some wholesalers and manufacturers see eBay as a great place to move their own products as well. These types of sellers are the ones you will find in all the hot selling genres, especially the tech genres. These are your main competition on eBay and are why eBay is a WHOLESALE marketplace.
3. As if the first two points weren't difficult enough to over come, you are also up against sellers using the platform purely for marketing. This is called "Loss Leading" It's a marketing technique where the seller is selling the product at COST or even below in some instances. This is designed to create interest, where by the seller can then market and drive traffic from eBay to an off-eBay website of their own where they have other products.
In essence, the money they lose on the Loss Leader item they sell is considered advertising money and can be an extremely cost efficient and effective form of marketing.
So you see eBay or Amazon are like ducks on a pond. All looks like it makes sense on top of the water, but it's what is happening under the water that really matters. In other words, simply looking at a price on eBay and then comparing it with a suppliers price isn't always a fair comparison, because you aren't aware of the seller's method.
I've only covered a few different methods in play here, just to give you some examples of why some of the prices are as they are. Trust me, there are plenty of other techniques in play in these online platforms as well, all of them effecting the price down, down and down!
I see so many people just expect to turn up, place an order with a dropship supplier and then sit back and watch the cash roll in. It's really important to keep expectations in check, this is a business that you are in and I'm not aware of any business where it's that simple to be successful. Business takes planning, it takes dedication to the cause and most of all, it takes persistence and some might even say a degree of luck to ultimately succeed.
Not only are you up against the well resourced suppliers mentioned above, but when you are trying to use a dropship model to go head to head with these sellers, you have very little chance. Actually, I'm being far to conservative, you actually have ZERO chance of beating them head to head.
Dropshipping has many advantages for sellers wanting to get into the market on the cheap, but Dropshipping isn't Wholesale and that is a fact you have to remember. Those buying in volume to get big volume discounts do that to get the very best price possible, dropshipping can never, ever provide you with the best price possible, because you are not buying in the volume required to secure those sorts of prices.
Now dropshipping can be successful on eBay, we have members here that prove that point everyday, but if eBay is your marketplace, then you have to find ways to position yourself in the marketplace and that often comes down to research, research and then even more research.
How to Negotiate a Wholesale Price?
Contact your supplier and ask how many you would need to purchase to secure a better price, that might be an option for you. Of course it costs nothing to try, so if you want to be cheeky then you could always just offer 6.500 a unit on a 100 purchase, something like that. The worst they can say is no, so nothing to loose by asking.
As a new customer it may often be harder to get the best or lowest wholesale prices so you have to persevere. But as a repeat customer you may have more leverage which you could use to try and get a better price.
Difference between Sale Price and Buy It Now Price
If you're talking about Ebay, auction listings sometimes have an option to "Buy It Now"...meaning that the buyer will not bid at auction, but pay the stated price. Many sellers sell only with a fixed price and don't even list at auction at all. When I started as a seller I played with auctions but it became clear to me that consistent and repeatable sales were the only way to make a living at this. I focused on products that would sell in volume. I was fortunate to own my inventory, but for those who don't have their own inventory, drop shipping is the way to go. Your margin will be slimmer - because you don't own the inventory - but if you do enough volume, you'll get to full time income.
Pros and cons of using Fixed Price over Auction Style and vice versa
You can actually use both to help boost your listings. You list your products using Fixed Price, then add a couple of listings Auction style so your items are bumped to the Top of the search engine. Auction style listings are best used as advertising for your fixed price and store listings.
So when someone searches for items like the one you sell your item will show in the Very first Pages and you will get more exposure....
More Exposure = More Traffic
More Traffic = More Sales.
Even better, try and source a couple of brand name items to use as these auctions, as they have even more pulling power.
How to set product prices on eBay?
This is mainly for use with eBay but can be put into usage for stores and other websites how it works is this
1. Enter in the category
2. Enter the price you brought at
3. Enter shipping price
4. Enter how much minimum profit you want to make and it will automatically calculate the bear minimum on how much you should charge as it includes eBay fees and Paypal fees into the final price of the item.
You can do profit by net profit,return and margin as well the website is: Link hidden: Login to view
Hope this post helps you get a better grasp of what a true wholesale price is, how to get the best wholesale price and how you can effectively price your products on eBay, Amazon and your stores.
If you have other helpful tips, do share by posting it here. Thanks!