Unprofitable salesmen

[royal_blue_angel01]

Hey Ebay! I ran across some disturbing news today talking to a Wholesaler. Straight to the point, she told me they and alot of Wholesalers aren't dealing with Ebay sellers any more. They say we undercut each other so much to the point that items are becoming unprofitable.  This was a Wholesaler i dealt with for a long time from when I started my website. 

Now there was occasions where I've seen prices so low that I know there was no profit made. The item basically was sold for was they bought it for. IJS....i agree with the wholesaler.

[timemachine777]

---

@fuzzface50wrote:

i've been going to an old type diner lately and the  gas wars were brought up. the one guy was a mechanic at one station said that quite often the station owners that had garages would ban together and start their own gas wars, set   .17 gas prices to run the gas only sellers out of business or limit their income at least. They didn't care about selling gas at no profit, they had garages that was making them their money. 

---

We never get gas wars around here. We just have lots of price fixing, Everyone will be off by a penny or two on 2.50 a gal gas. This way you just get your anywhere. Who cares about saving 15 to 20 cents on a fill up. 

[timemachine777]

---

@rosie247wrote:

---

@timemachine777wrote:

I had a friend in NYC that designed clothes back in the 80's and 90's. They had price ranges on their lines. In order to keep their clothing line high value, they would not allow their pieces to be wholesaled out below a certain price. They would end the MFG of an item if stores were not willing to pay their price. 

If they discounted on their end it would devalue their brand. Unsold inventory would be used for scrap material on other design ideas, given away as gifts, or tossed in the trash. Their pieces sold for hundreds of dollars each, and a few in the thousands.

---

This is what Hermes does. Every year they shred the items that don't sell. 

---

I thought about something. Even Walmart gets blocked from cutting prices. Every year they use to do 50% off the seasonal candy the morning after the holiday and then down to 25% and 10% over time. Some brands like Snickers, didn't like it. They made Walmart start shipping them back about 10 years ago. No deep discounting any of their candy. 

Even toy MFG'ers started doing that as well with Walmart. You never see Hotwheels for instance go on clearance for a deep discount. They get shipped back. When you look at Walmarts toy clearance aisle, the big name brands are marked down about 10 to 20%, no 50% deals. 

[bigchief2472000]

---

@rt_21_trading_cowrote:
"MSRP = Manufacturer Suggested Retail Price

MAP = Minimum Advertised Price"

Yeah, it was 2:30 in the morning, wrong one.

Anyone can find this all over the internet:

****Resale price maintenance (RPM) (US) or retail price maintenance (UK) is the practice whereby a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices (resale price maintenance), at or above a price floor (minimum resale price maintenance) or at or below a price ceiling (maximum resale price maintenance). If a reseller refuses to maintain prices, either openly or covertly (see grey market), the manufacturer may stop doing business with it.****

---

I'm not an expert, but I did some research on this topic a while back and if I remember correctly, a manufacturer/distributor cannot create a binding contract/agreement to set prices that a third party may sell their products for.  They skirt those laws by merely implementing internal "policies" which state that they will refuse to sell to someone if that person sells the product below a minimum price.  In other words, they can't ask you to agree with their "policy", but they can refuse to sell to you if you sell their product cheaper than what they want.  The end result is still the same...the manufacturer/distibutor achieves their price fixing goal, but without breaking any price fixing laws.

[d-k_treasures]

---

@timemachine777wrote:

---

@luckythewinnerwrote:

1st...You need to get your forum account checked for a bug. Every time you reply to my post, I get 3 to 4 notices, but it's only from you, nobody else.

LOL. Like this is my problem, and I'm going to waste my time calling customer support for something that is happening to you? 🙂

---

Tell one of the mods. It pretty much just happens with your post.

---

No, it happens with a lot of posters.

I even get them from myself to myself if I'm quoted in a reply I'm quoting.

[timemachine777]

---

@d-k_treasureswrote:

---

@timemachine777wrote:

---

@luckythewinnerwrote:

1st...You need to get your forum account checked for a bug. Every time you reply to my post, I get 3 to 4 notices, but it's only from you, nobody else.

LOL. Like this is my problem, and I'm going to waste my time calling customer support for something that is happening to you? 🙂

---

Tell one of the mods. It pretty much just happens with your post.

---

No, it happens with a lot of posters.

I even get them from myself to myself if I'm quoted in a reply I'm quoting.

---

I guess I'm lucky, because I don't those. 

[pburn]

---

@bigchief2472000wrote:

---

I'm not an expert, but I did some research on this topic a while back and if I remember correctly, a manufacturer/distributor cannot create a binding contract/agreement to set prices that a third party may sell their products for.  

---

I'm interested in the kinds of agreements companies like Estee Lauder and Clinique, for two, might have with their retailers. Their products never go on sale in stores and are always exempted from store coupon discounts. (They have their own gift-with-purchase deals, etc., but not traditional "sales.")

Can anyone shed some light on that kind of arrangement?

[ted_200]

1st...You need to get your forum account checked for a bug. Every time you reply to my post, I get 3 to 4 notices, but it's only from you, nobody else.

Yeah... I got 5 yesterday!

If they discounted on their end it would devalue their brand. Unsold inventory would be used for scrap material on other design ideas, given away as gifts, or tossed in the trash. Their pieces sold for hundreds of dollars each, and a few in the thousands.

Right.

Speaking of Economics 101, someone ^^^ need to go study supply & demand curves wrt pricing and they'd know those curves are variable in elasticity, and there is a point on the demad curve where you (no one, mfg., wholesaler, eBay flipper) do not want to go because the price is so low no one is making any money.  As you explained, that's when you stop manufacturing it, you just can't forever discount the price, and the people manufacturing it certainly do NOT want to reach that price or they're bankrupt.  

The reason there's dumping on eBay is that there are a lot of small time sellers with non-exclusive product who come to make their fortune here, but they soon forget profit-loss, and are instead focused on cash flow (revenue).  They took out a loan to fill a building with dead end product, the loan payment and rent is still due, and they need to sell stuff - even if at a loss - to pay.  People making an exit don't care, they'll sell at any price just to cut their losses, and anything unsold will be picked up for 10¢ on the $ and subsequently liquidated into the market even cheaper.  Preventing that is part of the reason some whse./mfg. will take back unsold product - it protects pricing for the rest of their successful seller clients, and their brand.

[bigchief2472000]

I had one a couple days ago where I got 4 notifications for 1 reply.  I did notice that the reply had been edited, so I just assumed that maybe the person had edited the reply several times and I got a notification each time they resubmitted it.  Could be wrong about that though.

[percgrabbe-0]

So here is the thing OP you made the mistake of "talking" to your wholesaler and she found out you are turning a profit selling her items on ebay that she wholesales. 

Now why would hse want YOU to make ALL the money when he could easily do the same thing himself and reap the profits.  You made the mistake of telling other people in sales your business. You got undercut. 

[bigchief2472000]

---

@pburnwrote:

---

@bigchief2472000wrote:

---

I'm not an expert, but I did some research on this topic a while back and if I remember correctly, a manufacturer/distributor cannot create a binding contract/agreement to set prices that a third party may sell their products for.  

---

I'm interested in the kinds of agreements companies like Estee Lauder and Clinique, for two, might have with their retailers. Their products never go on sale in stores and are always exempted from store coupon discounts. (They have their own gift-with-purchase deals, etc., but not traditional "sales.")

Can anyone shed some light on that kind of arrangement?

---

I did a quick search on Estee Lauder, but wasn't able to find specifically what you were interested in, but I did find this... https://www.elcompanies.com/~/media/Files/E/Estee-Lauder/investors/corporate-governance/governance-p...

In section 1-D they touch on the subject of antitrust laws, but never mention any specific pricing structures in this "code" for dealers.

Here's a minimum prining "policy" from a company I'm a little more familiar with... http://www.krollcorp.com/Files/Forms/2014%20U.P.P..pdf

Again, it doesn't get too specific in writing, but by comparing the MSRP to the price that most online retailers sell their products for, I've determined that their "suggested minimum price" is 15% lower than MSRP.  I would assume the companies you referred to have a similar arrangement with their dealers.

[timemachine777]

---

@percgrabbe-0wrote:

So here is the thing OP you made the mistake of "talking" to your wholesaler and she found out you are turning a profit selling her items on ebay that she wholesales. 

Now why would hse want YOU to make ALL the money when he could easily do the same thing himself and reap the profits.  You made the mistake of telling other people in sales your business. You got undercut. 

---

Wholesalers are not in the business to sell one item at a time, they sell in bulk. They make their money in volume per sale. 

[percgrabbe-0]

Then why would a wholesaler care what people are reselling his items for on ebay --- unless he also sells them there and isnt telling you?

[rt_21_trading_co]

Exactly. But there are other reasons. Regardless of what ebay sellers thinks about ebay or how proud someone may be of their "ebay business", there are many companies who do NOT consider an ebay "seller" a business. They consider a business a stand alone operation. They want a commercial address with signage, a company website, etc.

Some do not care as long as they make a living selling to retailers, but there are a lot that do. I have distributors that will allow ebay sales as advertising or as a small additional sales platform, but they have rules that state that persons buying from them MUST be a legal business, MUST have independent sales platform, MUST hold RPM pricing, etc.

Wholesalers get into that business because they do not want to responsibility of charging sales tax, keeping ridiculous retail records, dealing with whining and sniveling, shipping one little item to one person, the constant attempting to return every item, the extra laws that govern retail sales, etc.

And they certainly do NOT want to pay ebay and paypal 13% to 18% of their sales, their markup is not that much. Real true wholesale companies deal in small percentages, and large volumes. That's why they don't want extra expenses.

Manufacturers do NOT want their brands diluted with cheap pricing. Anyone who has been in business knows that it is very difficult if not impossible for prices to be kept at pricing tables high enough to get sustainable profits when some jack is selling them for pennies profit, ebay or otherwise. Major US motorcycle manufacturer caught a long time dealer in this area (over 30 years) selling OEM current production parts and accessories for less than retail and called in the financing on the floor plan, cancelled the dealership, and sued for brand dilution. And won on everything.

I get a kick out of the people who buy from LTD and have tons of that china junk they are trying to sell on ebay. Anyone ever looks at those listings then goes to LTD's website will find the same products on their website at cheaper prices than on ebay. Because LTD claims to be wholesale but sends the same china garbage catalog to EVERYONE who wants it. One price fit's all, junk is so cheap it falls apart before you get it out of the box. Sally in Seattle pays the same price as her next door neighbor silly Sue, and they all live in houses, no business of any kind. And both are trying to sell that junk on ebay.

The biggest problem is that ebay has marketed themselves as a worldwide garage sale for many years, ever since the beginning. Now they want the big money, and they have turned to Amazon's business model. I remember not so many years ago that Amazon had an auction platform to steal ebays users and sales because ebay sellers were tired of ebays line of **bleep**. Then when Bezop figured our that the garage sale label was hurting the retail side the auctions went away. Amazon has been so much better at making profits than ebay that ebay is scared in my opinion. I think they believe their model is going under and they are trying to change it.

But they are killing sellers to do it. I don't know, maybe after the get their "catalog" all done with stolen images from sellers they will suddenly just change business models and become like Amazon where they warehouse, sell, process payments, ship orders just like Amazon has. It sure looks like their headed that way.

[annindallas]

I know how to make a tremendous amount of money on ebay. And it will only work on ebay. It bothers me that ebay hasn't come up with it. 

The work you do amazes me. I am truly impressed and im sure others are too. I would not sell someone else's product, for what? Crumbs?

I realized what to do when i went to ebays home page. They had a bright red couch on four little pegs with half inch screws. Two things came to me immediately: its a piece of junk from China and twenty-year-olds will love it.. Bright red. Wait until they sit on it.

And then i thought, " i guarantee ill be seeing that bright red junk on the side of the curb a year from now". And then i thought of all the other crapolla wayfair and amazon are selling. Pretty pretty pictures. The kind you buy when you're 20 and dont know better..

What are they going to do with it when they realize its junk? 

Thats right. Sell it on ebay.

 Now i cant envision or articulate the commercial, but it's there. Its right there. Im not doing it. But someone will. Probably make more money than wayfair and amazon when they sold it new.

[rt_21_trading_co]

"Now why would hse want YOU to make ALL the money when he could easily do the same thing himself and reap the profits. You made the mistake of telling other people in sales your business. You got undercut. "

Wholesalers are not going to undercut and sell on ebay. They don't make enough money, and their business is not oriented around retail sales, charging tax and breaking open cases of products.

Pretty silly response with no truth whatsoever