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Selling products for no profit to make store look full
Selling products for no profit to make store look full
morettir




msg:4468132
 8:58 pm on Jun 21, 2012 (gmt 0)

I am opening a store selling regionally made widgets, targeting buyers outside my region. I have several manufacturers selling to me, but I only have about 10 different products now. I would like my store to look a little more "full". There are a couple manufacturers who have told me they would not sell to me due to direct competition. These manufacturer do sale wholesale to other brick & mortar stores, just not to online retailers.

I am thinking that to make my store look a little more "full", I can purchase these items at retail somewhere and list them slightly higher than others are selling it for. This would make my store look a little "fuller" and if I do actually sell one of these items, I would still make a profit. I don't intend to sell many of these items, but it would be good filler to make profit on my other widgets.

Does anyone know if the manufacturer can legally stop me from selling their product that I bought at retail? Could I be sued for this?

 

Automan Empire




msg:4468209
 2:35 am on Jun 22, 2012 (gmt 0)

Sounds like a new chapter for your business... chapter 11.

I think it could backfire; if customers see a familiar item on your site for above what they consider retail, it can create a perception that ALL items on your site are "expensive here" before they've shopped your unique items.

Pricing AT retail- "Loss leader" pricing only works if customers are very likely to purchase other normal-markup items, once drawn in by the loss-leader price.

Better to populate the store with products you can sell the usual way- buy low, sell high.

jwolthuis




msg:4468216
 3:54 am on Jun 22, 2012 (gmt 0)

Welcome to Webmaster World!

I think your idea of listing items at a slightly-higher price has merit, to achieve the "fuller" look you want. And there are a lot of regions in the world who shop based on availability, not price.

You want to find a niche market. I'd suggest you focus on export markets, where you might see little-to-no competition.

If you are based in USA, focus on Australia and Great Britain. They are English-speaking countries with generally-loose import laws. They are hungry for your products, and they are looking for stores like yours who ship internationally with low friction.

Become an expert with First-Class International shipping, and Customs Form 2976. Lots of stores don't want to bother with the hassle, so there's your opening. Cater to them, and your higher price won't as much of an issue.

You can also cater to domestic shoppers, even with a higher price, if you offer benefits that your competitors don't. Offer a 365-day return policy, or a price-protection policy (customers seldom bother using them). If your widgets are light, offer free shipping via first-class parcel. Or try free return-shipping.

There are lots of opportunities to succeed, even if your competitors have lower prices for the same items. Think globally, and test various promotions/policies to find out what works for you.

Does anyone know if the manufacturer can legally stop me from selling their product that I bought at retail? Could I be sued for this?

No and no. However, you should think about how you honor a warranty. Customers want stores who stand behind a product, not simply boot them to the manufacturer for resolution. Are you prepared to take returns on damaged/defective/unwanted products?

lucy24




msg:4468220
 4:13 am on Jun 22, 2012 (gmt 0)

Nothing wrong with carrying only ten items. Boutique vs. big box. Just make sure every aspect of the site is designed to look as if you only want to sell 10 items-- not that you wanted to carry 1000 but couldn't find any more.

Do some searching and you will probably find sites that only sell one item.

cliffud




msg:4468296
 11:39 am on Jun 22, 2012 (gmt 0)

I wouldn't worry about it. Buying products at retail and then selling online is how Zappos got started actually.

jsinger




msg:4468302
 11:46 am on Jun 22, 2012 (gmt 0)

Buying products at retail and then selling online is how Zappos got started actually.

And didn't Zappos lose like a bazillion dollars a year for the first bunch of years?

dpd1




msg:4468464
 6:09 pm on Jun 22, 2012 (gmt 0)

If you can make up for the lack of products by having great info on the stuff you do have... I think that would be fine. Personally I couldn't care less how many products a store has.

lgn1




msg:4469800
 7:32 pm on Jun 26, 2012 (gmt 0)

Does anyone know if the manufacturer can legally stop me from selling their product that I bought at retail? Could I be sued for this?


No, It falls under the first sale doctrine, and exhaustion of rights. (At least in the USA and Canada).

But, rather than buying retail. Enter into a partnership (profit sharing) relationship with a retailer. Some of the merchandise will be diverted from the retail side to the online side. It is best done, if you have friends, family, relatives in the retail industry; rather than approaching any retailer blind.

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