Using New Supplier - How Can I Possibly Compete?

[olimits7]

Hi,

I just signed up with a new supplier, and I know I have no "sales history" with them yet; so it will be hard to provide me with further discounts.

I've been doing some research on some item prices against competitors on Amazon, and it's ridiculous, I can actually buy the item cheaper from someone on Amazon than I get through this new supplier.

How do these suppliers expect you to sell their items, especially on Amazon, if they are not even providing me with good wholesaler pricing?

I'd rather just buy them off these other Amazon sellers for less!

It's just frustrating to see items like this because you can have everything working perfectly with your website, but if I'm not receiving good pricing due to a lack of "sales history" then I will never be able to build any "sales history" based on the prices they are offering me.

Thank you,

olimits7

[rocknbil]

Are you sure this supplier is the original source? Sounds like a reseller or importer . . .

My wife's business has the same problem. Supplier A is a large importer and sells her an item at say, $10. The items come from say, Egypt. Then we go on eBay or Amazon and see the exact same item on eBay from Egyptian sellers operating out of the U.S. for $5 - $8. The retail price for my wife is stupid at anything less than $20, and her retail competitors are selling for $25-$30. Lose-lose.

The only thing you can really do (which she has done, when she can find them out) is find the original source and save up pennies to buy in volume. Then that $8 price makes sense.

[dpd1]

Yeah, I would make sure they really are the original source. If they are, why not tell them exactly what you just said. See what they say. If they can sell way lower, you'd think some sales is better than none.

Also... I make most of my products, but I do sell one line of stuff that somebody else makes. They're the typical 'have it made overseas then sell in the US' operation. Their prices are pretty low, but I see people selling their stuff all over the net for ridiculously low prices. They have two brand lines. Most dealers go for the cheaper one. The way I get around it is that I buy the lesser known more expensive line, then I simply sell it with a generic name. So nobody really knows the brand name, thus they can't price compare. I've been doing this for years and nobody has said anything yet. I typically sell the stuff for quite a bit more than most people. But I know some manufacturers have strict rules about that stuff.

[jwolthuis]

With Amazon pricing, make sure you include the cost of Amazon shipping when you price-compare.

We sell a lot of items on Amazon below-cost, them make profit on Amazon's high shipping rates that they charge the buyer. First-class Packages can ship for much less than they charge.

[Planet13]

@ dpd1:

The way I get around it is that I buy the lesser known more expensive line, then I simply sell it with a generic name.

Question for you:

How do you get people to search / find your product? Wouldn't most people search for the manufacturer (whose name you AREN'T showing)?

Or do they find the product by searching for something else?

It seems to me that "brand awareness" is so important to online sales nowadays that I am having a hard time figuring out how I could implement something along the lines of what your wife is doing with the higher end line of products.

[dpd1]

You know, for most products, brand probably is a big deal, if not everything. My niche may be weird. It's something in electronics that can be both consumer or commercial, yet brand recognition isn't that big a deal. There are well known brands people know, and they probably do look for specific products from them sometimes. But there is also room for others. So rather than people knowing exactly what they want and searching on ACME brand widget all the time... They often just search on the widget type, or they search for something that will help the widget they have work better... and there I am. And rather than put all my trust in somebody else's products, I work hard to make my own work well... So that makes people happy, which translates to positive comments, which then reinforces the products I don't make myself. But if you sell jeans or something like that, then I could see where that would be hard. It would be like... OK, Joe Blow jeans, who the heck is that? But even with something like that, you never know. I think it depends on how you market it. If you had custom made stuff yourself that filled a high end niche, then reinforced that with some stuff from other people... I think that could sort of shore up the trust they have for you as a whole, and be willing to pay more for something. Even if it didn't have a big time name behind it. In other words... 'Hey customers... We have these awesome jeans that we get from a small vendor that we love, and they're all cotton, and blah blah blah'... So customer trusts you as a whole and takes the chance. But of course you have to back it up with a good product. I don't know... probably won't work for everything. It's probably only going to work for people that have a very personable website.

[Planet13]

@ dpd1:

Thanks for the explanation. I can see your point.

Using the clothing example (which is the focus of one of our sites), I wonder if it is possible to get the "initial exposure" through SEO or Adwords without using branding.

We do have some great quality pants that people LOVE when they try them on in our stores. they are blown away by them (but they are a SMALL market niche item). They are from small independent designers, and those designers don't have any advertising budget.

It is hard to use SEO or Adwords to compete in the "style" because no two people that I ask can agree on the the style. There are literally a dozen "niche" styles that they might fit into, but no single style would get enough searches that it would be profitable to market to that one individual style.

I'm wondering if in a situation like this, content network advertising would be more effective than search advertising?

[dpd1]

Yeah, I will say that in my biz, I think stuff like AdWords has done little to nothing. I do a little of it just to get the word out. My SEO is decent, but that just kind of happened on it's own somehow. I have a lot of side content. But in some instances, I think stuff like AdWords can almost be a hindrance. It kind of lumps you in there with so many other people. Maybe social networking would be better? I'm not sure. I think if you have a very stylized site and sort of create that vibe of being something special... You know, offering something more than just a cookie cutter site that is battling it out for SEO and prices... then that's how you can start bringing in those people who are willing to pay more for stuff and also trust your judgment. I think the more high-end people look at it as an experience overall. So once you have that rep, then that's when you might be able to just offer stuff for what it is, as opposed to WHO it is. It's what the music gear biz refers to as 'boutique'. So it's kind of like custom boutique shop vs Guitar Center. One is small and unique. The other is just a big chain looking to unload stuff to people who want a deal. But there are people on the net a lot richer than me, so who am I to say. :-) Going the 'boutique' route is probably more work. I know I work my butt off. But I think it might have more longevity in the end.

[Planet13]

@ dpd1:

I think if you have a very stylized site and sort of create that vibe of being something special... You know, offering something more than just a cookie cutter site that is battling it out for SEO and prices... then that's how you can start bringing in those people who are willing to pay more for stuff and also trust your judgment.

Thanks for the input. Yeah, I see your point pretty clearly. I think that for the clothing we sell, we are going to have to look at some alternative ways of getting the word out.

Also, I want to build "our" brand (meaning, familiarize people with our store name) as opposed to just help building the brand of the manufacturer's we carry.

[dpd1]

Exactly... Make it so your name and identity is the focus... Not a bunch of other people.

[olimits7]

Hi,

Just wondering; has anyone ever bought bulk in an item from either an eBay/Amazon seller because you received better pricing than what your supplier provides you with?

I guess at the end of the day it boils down to where you can get the item for the best value to maximize your profit margins. I would of course like to purchase this item from an authorized supplier/distributor, but if I can find the same exact item cheaper on eBay/Amazon it would be stupid for me not to buy this item in bulk from them. I would just be leaving money on the table if I would have gone with the supplier/distributor.

Thank you,

olimits7

[JackieBlue]

I've never bought in bulk from Amazon or Ebay but I have had sales on Ebay from obvious resellers by listing a bulk of an item. I used to do quite a bit of it but realized it was not my core focus and I didn't want to get in the wholesale business.

[JackieBlue]

I've never bought in bulk from Amazon or Ebay but I have had sales on Ebay from obvious resellers by listing a bulk of an item. I used to do quite a bit of it but realized it was not my core focus and I didn't want to get in the wholesale business.

[dpd1]

I felt kind of dumb doing it, because it seems so backwards... But yes I've done it. Not with anything big, but with some small components. They were fairly rare parts to find, and the big retailers wanted too much, and the manufacturers wanted you to buy hundreds of them. So I bought them from some guy online. It would be nice to go back to simpler days, where retailers automatically got the good price on everything, and customers were only able to buy retail. But manufacturers are so demanding now, and everything is all messed up.

[directwheels]

To be honest, if you buying products at a higher cost than it sells for retail, then maybe you need to look into selling other products.

HOWEVER, if you have some ways to get qualified traffic, you can sell it at any price you want and you should still get some sales because not everyone shops around. Last year, I sold around 200 of a specific item at around $280 plus shipping. I simply bought the item from another site that sold it for $200 retail. They started giving me a discount after the first 10 units. I just bought 5 at a time and had them ship to my house. But the thing is that the other site had horrible SEO and you can never find their site on Google. The only reason I found them was through a link on a forum.

So it is doable, but you just need to find your own ways to do it.

[olimits7]

I've also seen the same seller selling the same item on different sales channels for different prices.

So I guess you can still have an advantage selling the same item on different sales channels depending on how much traffic and what competitors are listed on those sites compared to other sales channels sites.