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Assume an item sells for $10 and the seller gets a profit of $1. The seller must locate the one item in his inventory, package the one item and handle the transaction (credit card, cash, etc.), all for the one dollar. If instead he sells 100 of the same Item at once, he only has to do all this activity once and makes $100 for it. So, he can sell it for less and still be ahead. If he does this routinely he can buy from his distributor at a lower price for similar reasons.
What else can I help you with?
Which best explains why wholesalers can offer lower prices to larger customers?
Wholesalers can offer lower prices to larger customers primarily due to economies of scale. When larger customers purchase in bulk, wholesalers can reduce their per-unit costs through streamlined operations, reduced handling, and lower shipping expenses. Additionally, the increased volume of sales allows wholesalers to negotiate better prices with suppliers, passing those savings on to their larger clients. This pricing strategy incentivizes bulk purchasing and fosters long-term business relationships.
Why do wholesalers offer lower prices to larger customers?
Large companies can buy all or most of a wholsaler's stock, reducing the wholesaler's administrative costs.<--- apex To buy something wholesale is to buy a large amount of something at a cheaper price. Since wholesale companies buy stuff at cheap prices, they can also sell it cheaply
Why does competition among producers result in lower prices better product quality and better customer service?
It is a matter of basic Economics. The more products available, the lower prices. Companies choose the prices to a point, and the more competition for business, the customers will choose the lowest prices for the same items. Competition also effects quality and service, since if the same products and services are offered, customers will use other factors like how they are treated or how long the product lasts.
Why does competition among producers result in lower prices and better product quality and customer service service?
It is a matter of basic economics. The more products available, the lower prices. Companies choose the prices to a point, and the more competition for business, the customers will choose the lowest prices for the same items. Competition also effects quality and service, since if the same products and services are offered, customers will use other factors like how they are treated or how long the product lasts.
How should you respond to customers who press us for a lower price?
This depends upon your position with the company. In most cases, customers are asking people to do things that they are not authorized to do. If you do not set the prices and are not authorized to negotiate prices, then there is nothing you can do for such customers. You can tell them that this is the price, you cannot change it, and they are free either to buy it at the price for which it is being sold, or not to buy it if they don't want to pay that much. Those are the choices. If, however, you do have authority to change prices and to make deals, then it is up to you to decide whether it is beneficial to your business to make such deals and to lower your prices. You are under no obligation to give in to customer demands, but in some circumstances, maybe the goodwill of the customer is valuable enough to justify the lower price. If the customer expects you to sell your product at a loss, then you really have to say no. Otherwise, you will shortly be bankrupt and out of business. But who knows, perhaps your prices actually are very high, and you can lower them and still make a profit.
Which best explains why wholesalers can offer lower prices to larger customers?
Wholesalers can offer lower prices to larger customers primarily due to economies of scale. When larger customers purchase in bulk, wholesalers can reduce their per-unit costs through streamlined operations, reduced handling, and lower shipping expenses. Additionally, the increased volume of sales allows wholesalers to negotiate better prices with suppliers, passing those savings on to their larger clients. This pricing strategy incentivizes bulk purchasing and fosters long-term business relationships.
Why do wholesalers offer lower prices to larger customers?
Large companies can buy all or most of a wholsaler's stock, reducing the wholesaler's administrative costs.<--- apex To buy something wholesale is to buy a large amount of something at a cheaper price. Since wholesale companies buy stuff at cheap prices, they can also sell it cheaply
Who are the primary customers of wholesaling businesses Why?
The primary customers of wholesaling businesses are retailers, manufacturers, and other businesses that require bulk products at lower prices. Retailers purchase from wholesalers to stock their stores without incurring the costs associated with buying directly from manufacturers. Additionally, businesses may seek wholesalers for convenience and efficiency in sourcing a variety of products, allowing them to focus on their core operations. Wholesalers play a crucial role in the supply chain by bridging the gap between producers and end-users.
Why is Booking.com able to offer lower prices compared to other booking websites?
Booking.com is able to offer lower prices compared to other booking websites because they have a large network of hotel partners and negotiate discounted rates, allowing them to pass on savings to customers.
What is a wholesale company?
Wholesale is the resale of new and used goods in large quantities or bulk, at lower prices to retailers, industrial, commercial, institutional, professional business users, other wholesalers, and related services or involves acting as an agent or broker in buying merchandise for, or selling merchandise. Wholesalers usually assemble, sort and grade products in large lots, break bulk, repack and redistribute in smaller lots to resale.
How did corporation keep prices from falling?
In an oligopolistic market dominant firms control the price of products by punishing other firms that lower their price. One tool corporations use is the "Lowest Price Guarantee" this marketing slogan promises to match or beat competitors prices on comparable prices. This slogan punishes companies that would lower their prices by taking away their customers. If a company were to lower its price it would lose customers and thus profits. The large corporations can afford to take a price cut in the short-run in order to prevent competition and stabilize profit margins for the long-run.
Why is Expedia able to offer lower prices than booking directly with hotels and airlines?
Expedia can offer lower prices than booking directly with hotels and airlines because they negotiate bulk discounts with these providers and can pass on the savings to customers. Additionally, Expedia can compare prices from multiple sources to find the best deal for customers.
The Robinson-Patman Act of 1936?
Sometimes called the Anti-Chain-Store Act, this act was directed at protecting the independent retailer from chain-store competition, but it was also strongly supported by wholesalers eager to prevent large chain stores from buying directly from the manufacturers for lower prices.
Why is Booking.com able to offer lower prices compared to hotel websites?
Booking.com is able to offer lower prices compared to hotel websites because they negotiate discounted rates with hotels and have a wide range of options, allowing them to offer competitive prices to customers.
Why do companies practice price discrimination?
Companies practice price discrimination in order to maximize their profits by charging different prices to different customers based on their willingness to pay. This strategy allows companies to capture more value from customers who are willing to pay higher prices, while still attracting price-sensitive customers with lower prices.
Why can large chain stores offer lower prices than local businesses?
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Why might prices are kept lower than the unit-elastic price?
to create market stimulation, so that the market will attract customers
