What is the lowest price for this?

Procurement: Wholesale purchasing question: Lowest wholesale price is just above street price. What gives?

• On multiple occasions, we've gotten wholesale pricing from brands that we want to carry in an e-commerce store, only to find that their wholesale pricing is right around the retail price some of our competitors are selling it for. The brand/company tells me that there is no lower price or additional discount available. One product I just looked at: -Wholesale price is $17.92 -3 online retailers are selling it at below wholesale -Multiple other online retailers (including walmart are selling for <$20) Additionally, many of these retailers are offering shipping at a price that they are clearly losing money at. I doubt these products are being used as loss leaders. I don't see how they can possibly make any money selling a product at ~10% above wholesale and lose money on shipping. What gives? Could the brands be offering a secret discount that they won't tell us about? Or do you think our competitors are really selling the products at 10% above what they are paying for them? Some brands we look at the street price is 30-50% above retail, while others are very low like the one above. Any suggestions would be welcome. ~Adam

• Answer:

  E-commerce is getting hit hard with these kinds of rates because large competitors both, physical stores and other e-commerce, are willing to purchase many items close to their street price if they're under $50, sometimes up to $100. They're using these smaller items to build loyalty so customers come back for bigger purchases. You have to ask about these upfront. Discuss the volume you're willing to buy, the speed of the shipments you want, and other factors of your supply chain.  You can also discuss size with them - they'd be happier to fill a full truckload for you and try to make a less-than-truckload move or have to split up some distribution, and sometimes the size and variety of objects purchased can make getting a full container or truckload easier. Don't forget the power of the bundle either.  Some of your large competitors buy services in bulk, not just items, so some of their shipping and distribution is at a much smaller cost than you'd expect. Guaranteed business at guaranteed volumes makes everyone happier and more willing to lower prices slightly across the gamut. When looking at Walmart, you have to remember that they've got their own fleet, which is one of the largest private fleets in the world. I've also noticed that when some companies sell to smaller online retailers, prices are a little higher to cover some tax burdens - both existing and potential depending on where you're shipping from/to.