A business that can sell 10,000 at once has a lower cost per unit so can sell it at less per unit and still make a profit. A retailer will sell perhaps one or two at a time and that's more expensive to do - same cost to deal with the customer but spread over only one or two items instead of thousands. Meanwhile he's got the rest of the big box still in store and it costs to have somewhere to store it. Being a retailer of small amounts is a much more expensive operation.
It does tend to turn out that most of what you pay for anything is the retailer's profit, and only a small proportion of it gets to the producer.
Since very few retailers other than Costco and Walmart can buy all 10,000 of the product they cannot buy it for that low a price. The distributor that can buy it may sell some of it for $6 to a retailer that can buy 5,000 and $8 to someone who could buy 1,000 but if you could only buy 100 then it would probably cost you $10. The retailer would have to put the $1000 upfront and not get his money back never mind make a profit until he had sold sold more than 40 of them. It is not as easy to make money as it might seem.
Hello
A person runs a small business from a warehouse. He owns the warehouse and is the only worker. So he only pays for electric, Gas, Insurance, Phone and Water.
He has a supplier who can sell him a box of 100 (Each box is 10 X 10 smaller boxes) for $300.00
His overheads are low but he has to make a profit. Typically this will mean he sells at 100 for $600.00. Or may split a big box if required.
The Retail Price will typically be a box of 10 for $120.00 or 1 for ￡12.00.
This is because a normal retailer has higher overheads. Renting a higher cost shop, Employees ect
Andy C
He may
the wholesaler sells to retailer at a markup with a minimum purchase - if retail is $15 and the wholesaler buys then for $3, he probably sells then for $7 but the retailer has to buy 25 or more at a time
