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Thread: Getting a price for a quantity of hard drives (reselling)

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    Default Getting a price for a quantity of hard drives (reselling)

    OK,

    So I'm looking at a IT supply contract for 60 SSD hard drives. My company is new. For the most part I've looked online and ebay. The cheapest I've found retail (online) is B&H video for roughly 269 each. I contacted the mfg directly, they gave me a quote of 255 each. Then I've been contacting each of the resale partners from the mfg. A few questions.

    1. Since I'm a new company and I don't have any volume accounts (partnerships) with these manufactures it seems that a "heavy purchaser" can easily win this since they will probably pay some super cheap price, that I can never get since I'm kinda "coming from the outside".

    2. What would be the difference between the mfg price vs. their distribution partners. I haven't been able to get pricing from them yet, since I'm waiting for my account to get approved. Is it worth it going through them. Would their price be higher?

    3. How much negotiating do I have when they give me a price. The mfg gave me a very round price $255.00 then he threw in free overnight. My suspicion is if I press him, he can do cheaper.

    4. What's the general rule for profit margin. In all honesty I want to charge them the cheapest but not for free. I just want to get awarded the contact so that I can get some contracts under my belt (new company). Get some relationships with the Gov to further more contracting. My thinking is to add $50.00 per unit. So $255.00 x 60 = $15300. Tack on $50 making the total 18,300. So $3,000 profit. The delivery terms are simply. Everything to one location. The location is within drivable range to me.

    5. Is it better for me to have the distributor/mfg mail the product directly to the gov v.s. me obtain the product then ship it to the gov customer.

    Thanks

  2. #2
    Member Needs New Keyboard Array Brian Altenhofel's Avatar
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    Manufacturers usually won't undercut their distributors.

    Distributors usually base discounts on volume. Online retailers usually do high volume on low margins and sell at or near the minimum advertised price.

    I'd almost bet that CDW-G gets the contract. They've probably already supplied the quote or an employee has done a printout of the cart (that can qualify as a bid in some jurisdictions), and the agency is just making sure they satisfy the competitive bidding requirement.
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    My opinions with regard to your questions.

    2. I believe the distributor can increase the price of the product as much as they want. But if the manufacturer found out a distributor was increasing the price too much, to the point they are nowhere near competitive, they may intervene. You should be receiving a better price from the manufacturer.

    3. People ask us for a discount regularly. For a new customer (someone I probably would never hear from again) I most likely would not give them a discount. But if it were for someone I'd done some business with in the past, I may.

    4. Different profit margins for different businesses.

    5. I believe with the products you are working with it will be best to drop ship.

    In regards to my business. I sell a part that goes on a machine. Once the machine in made with my part on it it costs time and money for a machine owner to retrofit the machine to my competition's part. The part can wear out, so I can factor in future business with the customer and make my money on the backend.

    My computer guy kinda said the same thing. They will quote a website at cost and make their money later when the company wants to make changes to the site or has a weekend emergency.

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