Thursday, June 26, 2014

Do People Not Comparison Shop? Or Am I Just Super Cheap?

A friend posted something recently about someone who was incessantly using and talking about a particular decorating product. Her comment was that she didn't understand why this person was promoting it so much.

I hadn't heard of the seller or the product, so I went to look at it. Turns out that the seller was reselling an item that someone else made. Not unusual, that's called retail...but you generally buy at wholesale prices if you do that. In this particular case, the item was marked up from $14, which is how much anyone who went to the manufacturer's website could pay for it, to $30, which is a lot more than $14.

So that's why the seller was promoting it so much, they were marking it way up. No matter that anyone who wanted to buy this item from them could google it and find it at a much lower price.

I've seen the same thing with a few jewel molds that I sell. I know of at least two other people who are selling the same ones for twice what I'm charging, and I have a normal retail markup on mine. For example, this one is $8 in my shop and $15 in someone else's. And this one is $8 for a set of two, and someone on a different site is selling the large one by itself for $20-25! Are you kidding me? 

So this left me wondering, are people just lazy? Or am I so cheap that I research everything before buying it? Everyone should be trying to control costs, and I just assumed that comparison shopping was a part of that. Apparently not, based on the number of people saying that they couldn't wait to buy the stuff at the inflated price.

If you don't know, the way that wholesale works is that you buy items at a reduced price from the wholesaler, but you usually have to buy a minimum amount. I buy the petal dusts the I sell in my Etsy shop from a wholesaler, then I mark them up to a retail price. Even then, you can shop around and find people who are selling the same thing for a lot more. On Etsy the same item can go from anywhere between $3.50 to $5 a container. It all depends on what the retailer wants to charge. I sell them in groups so that I can charge a lower price and still make a profit on the group.

Sometimes the wholesale price isn't that much lower than the retail. The Crystal Colors don't wholesale for very much less than the retail price, so I don't sell those on Etsy, just on my own website store. If I listed those on a site that charged fees I wouldn't be making any profit at all, so I just stick to my own store for those.

The main issue here is that wholesalers generally sell only to other businesses that have tax ID numbers. If you can go to a website and buy something without filling out any IRS-type paperwork it's probably not a wholesaler. So to go to a site and buy something for $14 without any issues isn't buying wholesale, it's just buying it. Which means that the people selling it for over twice that aren't selling wholesale, they're just price gouging.

So pay attention. If someone is selling something that has a different manufacturer's label, definitely google it to see how their price compares. In the case I'm talking about I just googled the product number on the label of the item that was being sold, and the $14 price came up. Guess where I'd buy that stuff if I was going to buy it. Hmmmm...


Kara Buntin owns A Cake To Remember LLC,  online cake supplies at  www.acaketoremember.com and www.acaketoremember.etsy.com

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