Wholesaling

Finance allah shmoop what is wholesale and well maybe there's

a better question here What is half sale or a

part sale No crickets Okay fine You're no fun All

right you buy a bottle behind to catch up for

six bucks at the grocery store That's six bucks Was

the retail price you paid for that ketchup But when

safeway or kroger's or albertsons bought it they paid something

more like in four bucks for it The four bucks

they paid was their wholesale price That is most of

the time in business Manufacturers don't actually sell their product

directly to consumers Rather they distribute their products in bulk

Selling it price is cheaper than retail and then allowing

the retailer to mark up the price giving that retailer

enough profit margin teo Well you know exist And this

makes sense because well heinz is good at managing cheap

nonunion tomato labor in mexico smashing them up adding vinegar

removing fly wings and worm thing is bottling storing and

all the other production things like adding a whole heap

of helping of sugar And you can't forget about the

sugar All right so that's what hines is good at

Making ketchup They're not necessarily good at selling catch up

at least not directly to consumers like how would they

do this anyway A website A mail order thing from

heinz dot com Should they have a big chain of

pints ketchup drive throughs like who would drive to a

store to go by a jump You're probably not gonna

happen So heinz wholesales it's ketchup to grocery stores and

two convenience stores and tio wal marts and of course

to the special effects people in hollywood and at magic

show theaters all around the world Many questions remain as

to why the unit profit margins on catch up to

a grocery store are thirty percent whereas capers are like

eighty or ninety percent and a diet coke is only

like in a fifteen percent well the answer lies and

a few key dials that directly turned to map the

power or leverage each side has in any given to

go Oh she ation that is Heinz is a brand

people like and generally seek out but wouldn't die without

having it in their fridge Well the retailers safeway could

have its own safeway brand of ketchup and riots would

probably not break out in the street if they ever

do Didn't carry hines and you know that well in

either situation there'd be plenty of fake blood on hand

Teo manage through those riots right Well the same cannot

be said of diet coke where for many shoppers if

the grocery store didn't carry it well they'd simply shop

elsewhere So if this is the case while then wire

capers such a huge unit profit margin item to a

grocery store Why Because there's no sought after brand like

coca cola And well this is what the last caper

riot looked like In fact very few capers or ever

sold So the cost of the quote riel estate unquote

of however many square inches capers take up on the

grocery store shelves is very expensive And without high profit

margins at least per unit sold well the grocery store

would simply not bother to sell this low turnover Generally

who cares about jeff item Sorry capers I was just

keeping it real here So the bottom line is that

instead of hundreds of millions of customers while then pines

has just a few thousand to whom they wholesale they're

fake blood product And yeah it looks like while someone

just discovered a fifty eighth variety Hey what do you 00:03:17.223 --> [endTime] know