Margins from wholesalers in the red?

[kingpd@businessprints.net]

Ok, so I'm looking through this month's edition of Carolina Wholesale's sales flyer and I think to myself...self: how good are these prices? Could I make money drop shipping stuff from them to the end user?

So I decided to look up a few prices on things...not just copiers and printers, but toners, laminators, calculators, etc.

I looked up pricing at various places such as staples, amazon, and general google searches, etc.

Take the GBC Ultima 35 laminator for $399 at carolina, plus shipping on 35 lbs. weight. Amazon had the same thing for $412 for free shipping.

We also had a TK1142 kyocera toner for $69.95 at carolina, and $77 free shipping on Ebay. Note that all price comparisons were sellers doing this as a business and not just having one or two lying around.

There's more examples but it seems to me that no one is going to make any money drop shipping through the distributors. I'm no dummy to retail...I understand many of these places buy direct, but little secret not all of them do...some big names like Office Depot actually buy a lot of their product skews from wholesale distributors.

But then again, I know a lot of distributor and manufacturer sales reps hide behind the excuse that others get better pricing because of their sheer size and volume...this is often only a half truth.

So what do you guys think? Are distributor prices too high? Is anybody able to move product at drastically higher prices?

I know we try to sell ourselves and our high quality service, but let's not bullshit ourselves; most of these smaller ticket items there's little to no added value that an independent could add.

[ZeusGT]

Re: Margins from wholesalers in the red?

Hey KingPD,

Yes, I have run into this problem many times over and I have to say that we as a small business and independent had to stop trying to compete in the toner war. I feel that the geographic location that we are in (Tennessee) has a lot to do with it. I would quote a bottle of toner and the first thing the customer would say is "We can get it from dippy do's website for $3 cheaper." My first response to that is, I strongly encourage you to do that if that is all your budget will allow you to do however, my warranty will be voided if you use toner from an non reputable source via the internet. I also tell them that I refuse to play the toner war because most of the time the toner that is online is either out of date or is an insurance claim in bulk. However, if 3 or 10 dollars means you will go bankrupt then I suggest you gamble with that.

As an independent, I refuse to give away my services and machines. I know that I loose a lot of deals because of this, but I have a lot of love and passion built into my business and into the machines that I recondition. I invest an average of 6 hours of labor into each machine tearing them down and rebuilding them. I refuse to just give them away because some tight wad wants to play Donald Trump and Let's make a deal. I explain this to every prospect that I sell to and the ones who purchase our equipment are very happy and feel that they got exactly what they paid for. I would rather run a business that sells quality reconditioned machines than a business that shoves machines strait from the off lease warehouse to the customer door for $1000 less. No, I'm not the one plastered all over the billboards and making Memphis's top 100 small business list, but I do have a good name out there. People know that when they use us their machine will be right and perfect.

[kingpd@businessprints.net]

Re: Margins from wholesalers in the red?

I like your reply and totally agree...

...I'm thinking more of we're getting or trying to get into some e-commerce stuff and I noticed that we'd lose some of our selling points and can't compete on price on a lot of things.

Surprisingly though there is a lot of stuff we can beat Amazon on if we have to, which I find interesting in and of itself.

[copiman]

Re: Margins from wholesalers in the red?

We are a small business ourselves. Just got started from scratch last year. We sell, service, and supply copiers, printers, faxes, as well as office supplies and cartridges. I had a customer comment to me the other day that a web site sold the same cartridges for their small all-in one color machine for a good bit less than we did. Our mark up is low, for we want to grow our business. I will help those who buy cartridges from us by offering to provide service on the unit for free. When I say free, I mean general things like if its jamming and all that is wrong is cleaning something, then no charge. We provide the labor, and I don't mean alot of hours though. They pay for parts as well. My response was this: If you have an issue with the cartridge, how will you handle that? Does the cartridge come with a tech? I am not going to chase a dollar or two.

[allpoints]

Re: Margins from wholesalers in the red?

You all bring up good points and i totally am on the same page. I am a wholesaler and no Im not the size of ICE or some of the other big boys. But everything goes back to and old saying "you get what you pay for" If you offer chicken shit product you get chicken shit prices. If you treat people the way you want to be treated and charge a fair price you can make a good living selling ice cream to eskimo's. If you put your best foot forward with your customers then 99% they will come back on a regular basis. The ones that don't usually aren't worth missing.