Originally Posted by stick
You're an idiot. The point of the volume discount is to get individuals to buy more items, not to consolidate orders.
Volume discount is to incentivize a larger total order. You combining with other people's orders to get a larger discount from egocomplex does not contribute to the overall order size. The "savings" you're getting are not being passed on from Silent, but are coming out of egocomplex's already small profit margin.
This is exactly right. It's important to understand what drives the entire cycle for wholesaling.
The supplier sells goods to a third party , (egocomplex) who will sell the goods on to the consumer. We are a startup e-boutique, which means we have not many overheads, but we still have to make investment in stock. We are not an established retailer, we are not a department store, so we simply cannot afford to retail without support from a pre-order system.
Taking orders is extremely daunting task because it involves dealing with each order individually, handling hundreds of prices and details of delivery with the supplier to name a few things.
Typically we would calculate the price that the garment will need to be sold for in order to reach a mark-up price. As you know, the markup price is the difference between the selling price and the manufacturer's cost price, however you should notice that the pricing we are dealing with here is not a typical selling price. Note* a retail selling price is typically 2.5 or 3 times the price of the our cost price. We are dealing with prices that are not even at 1 times the manufacturers price. Even if we were dealing with typical markups of 2.5 times, we still would not make a large profit from this mark-up simply because the proceeds are used to cover many costs we have!
Simply put, our pre-ordering system is a rare opportunity to a consumer in this market.
Based on how much he/she is willing to pay, we have determined the optimum cost price which is simply unrealistic to any retailer that operates behind the premise of making the largest profits for their company. We are lucky to break even after freight costs and import duties. However, we are not dwelling on the fact that we are not profitable yet..what we want to do is make this buy happen at the lowest possible margin to stay afloat and order from future collections.