I have been looking a lot into financial competence lately, because it is much better than having to give everyone advice. You should be able to make financial decisions on your own. I have found an amazing infographic for what constitutes people with better financial competence.
One of the most important things that a consumer can do is look for ways to save money. A person may have a certain product in mind that they would like to purchase, and would like to get it at the lowest price. As they do price comparison shopping on the web, they may notice that several stores will be priced much higher than others for the same exact items. However, there will be a choice few retail companies that are able to sell the same product for a substantially lower price. There is a reason that some companies are able to not only sell products at a lower price, but make more money when the price point is significantly lower. This article will discuss the difference between wholesale versus retail pricing and why it can help consumers save money every year.
What Exactly Are Retail Prices?
When you go to a regular store in order to buy groceries, merchandise, or even purchase a vacation on the web, you will notice that, the more that you look, that the same exact items can be purchased at much lower prices at some of the stores that you find. And as you look a little further, and you compare all of the prices that they sell merchandise for with the same companies, regardless of the products they are selling, certain stores can sell items for less. What your research will lead you to is the understanding that the larger the story is, the lower the prices will be. An example of this would be going to a national store like Wal-Mart and, no matter what product you want to buy, it will almost always be for a lower retail price than you can find at any other store online or off-line. Why is this? How is it possible that a larger national store can actually offer products for much lower prices? The answer is found in understanding wholesale prices.
Wholesale Prices Overview
If you have ever owned your own business, you know that when you purchase products from a manufacturer, or a main distributor, the prices that you pay will be significantly lower than the prices that you will sell your merchandise for. This is a standard across the board, regardless of the country you’re in, or the product you are selling. In order to make a profit and run your business efficiently, you must always sell the products that you buy at wholesale prices for a higher price retail. In fact, every business works in the exact same manner. The question is not why we buy wholesale goods at wholesale prices. The question is how is it possible that some companies are able to sell their products for retail prices at almost the same price that they buy the merchandise? The answer is found in the concept of volume. A store like Wal-Mart, or Target, is able to buy thousands of items at a time which means that they legally can purchase all of those products for substantially less than someone who is not buying at the same volume or level. For instance, if Wal-Mart decides to buy Cuisinart blenders, if they purchase 1000 of them, they can always purchase them for far less than someone who owns a smaller business that is only purchasing 10 or 20. Their ability to buy large quantities of each product that they have in their store allows them to not only get a better wholesale price, but it also allows them to sell their products a lower price and still profit because they have so many stores to sell these items at. The sheer volume of sales that they will make each and every year from these products allows them to earn billions of dollars in profit, opposed to the few thousand dollars that a smaller store will make with the same exact merchandise. Also, small online re-sellers that buy things such as, handbags wholesale, can make massive profits from price points. Now how can you use this information to help you save even more money as a typical consumer looking for the best deals?
How Volume Wholesale Pricing Can Save You Money
When you go to a large retailer, you now know that the prices that they charge are just above what they pay when they purchase the merchandise wholesale. The way that you can save money is by comparing all of the other stores that are of comparable size that are selling the same type of merchandise. Moreover, by searching on the Internet and looking at websites like Amazon.com, you can save even more money because Amazon, and sites similar to it, or not paying the overhead involved with running a traditional business. Amazon does have employees that stock their warehouses, and ship their products. But it does not have checkers in check stands that are doing business transactions with customers coming into a store. Amazon does not have to pay for the heating of the building that is being used to house the merchandise, or the rent and other bills associated with running one of these superstores. Online websites are able to bypass what most stores have to pay for in the real world, and therefore you can save even more money by shopping and purchasing products online. Additionally, some of these companies offer free shipping on the products that you purchase which means you won’t have to waste your time, or your gas driving to the stores, which means more money in your pocket when you do your shopping online.
In conclusion, the benefits of understanding wholesale versus retail can lead you to finding some of the best deals available on merchandise on the Web. You now know that larger stores are able to purchase products at wholesale prices far less than smaller stores. However, because of the overhead cost involved with running a real-world store, the best deals are going to come from the largest online stores that sell products because that overhead is not there and they can pass the savings onto you.
I’m not the first person to tell you how to spend you money and I won’t be the last. However, I’m only trying to give you information that will help you make decisions! My whole point is to bring up case studies around finance and how certain people buy things for reasons other than necessity. I will be posting the first case study soon!