Let's talk about.....wholesaling

I've seen comments about wholesaling, as well as having made a few. This isn't a how do you feel about it thread (just wanted to nip that sideline off right now); this is a what it means and what are your terms thread. My main interest is the perspective of people that do this as a business, regardless of scale (*NOTE* that means you have have a tax ID for your reptile business, and you claim your income from it)...however, I'm not going to exclude hobby sales or occasional sales. If you purchase wholesale, your input is welcome as well. All I ask is that you identify what group you fall into.

I will be drawing examples from several years of sales, several kinds of animals, and several types of customers. Situations may or may not be altered, but it is not my intent to single anybody out for any reason. If you think you recognize yourself in one of my comments, please don't take it personally. I'm posting this thread as much to expand my own knowledge as to share my thoughts.

When I think wholesale, I think business to business. I also think quantity. In my mind, there is a difference between wholesale and quantity discount. I also view wholesale as a more generic type of sale/purchase.

Obviously, one can't always recognize the businesses on name alone. Lots of people use "businessy" names, and websites are becoming more and more common across the spectrum. For out of state sales, I'm somewhat less focused on whether someone is a "real business" when they inquire about a wholesale purchase; but, instate, I want their NYS Tax ID for my records. That's because the State wants their money; and, if I make an instate sale, I'm required to pay sales tax unless it is wholesale to a business...and, if the State comes sniffing at my books, I don't want any hassles.
I get a fair number of inquiries from random people who make statements to the effect that they only pay wholesale. That's nice. I have one animal posted in the ad, and the price is $XXX. Do you want it? Why do people think they would get wholesale pricing on a single animal?
What if Jack, of "Jack n Jill Reptiles" (who - for the purpose of this example - happens to be 17 yrs old, and just purchased his first snake 6 months ago) contacts me saying he wants to purchase the three female mojaves I have advertised? I have them listed at, say, $200 each (which is theoretically at, or slightly below the price people have actually been paying)...and Jack says he wants them wholesale, and will give me $75 each. Given the situation, I'm going to say no. Will I give him a decent price for purchasing all three? Absolutely. But it will be certainly be higher than the offer he just made (at asking price, 3 x $200 = $600, vs 3 x $75 = $215), especially since I could realistically expect to sell them individually without much trouble.

Since I have a litter of hypo + super hypo boas that will be available soon, I'll use them for my next example. I've already publicly stated that I would prefer to sell them in wholesale lots. Since they aren't all the same, I'm going to be grading them - with the nicest ones being probably 2x (maybe a squeak more) the cost of the lower end. If somebody contacts me and says I want a wholesale lot of 10 hypos, and I'll give you $xxx; if the price is acceptable to me, I will select 10 of the ones I don't expect to be super hypos...without much consideration of gender. Conversely, if that same person approaches me with a specific list that includes the 7 best females and the 3 best males (of which I think at least 8, probably 9, are supers) for the same price, I'm going to decline - and for a couple reasons. 1) that deal leaves me with all the lower end snakes, and male heavy to boot...heck, the probable supers are the handful I would choose to keep and sell myself 2) even if I were willing to bulk them out, I'd have to be desperate to do so at low end hypo wholesale pricing.

That's enough for now (I'm going to bed, since I have to get up for work in 6 hrs).
Let's hear what you consider wholesale, and the conditions you apply to those sales/purchases.

Originally Posted by hhmoore

? Why do people think they would get wholesale pricing on a single animal?

Because in the non-reptile retail world, (eg furniture, appliances) there are ads all the time that say 'wholesale to the public' but are merely discounted retail outlets.

I'm thinking that some description in a reptile wholesale ad might do away with some of those purchasers who have expectations different from yours. For instance, you could specify that wholesale pricing requires a purchase of at least 'x' quantity of animals to be picked by you.

Ive got one person I wholesale to and he purchases 20 animals at a time. If you just want one or two... that doesn't quailfy for wholesale prices IMO. If you want wholesale prices from me.. then I need quanity from you.

When I "buy wholesale" I am expecting to buy 1) them out of business 2) a quantity set by the seller and myself or 3) the whole litter. I think if people want to pay wholesale, they should expect to buy wholesale quantity and take into consideration that usually that means the TOS is different for that transaction.

When I inquire about buying feeders, I always ask what their wholesale qty is when I make a purchase. A lot of times, they tell me I have to buy XXX amount per month to qualify and I usually dont have a problem meeting their expectations.

To me, wholesale absolutely means business to business, regardless of quantity--as you said, we pay sales tax on anything that is NOT to a business.

The only reason to sell animals at wholesale prices is when you're intending to sell them to a retailer or distributor. You know the retailer has to mark them up to make a profit. It's also a sure bet that you're going to be selling many animals to the same retailer--either in large numbers at once, or in large numbers over TIME. They're going to be a regular buyer.

Most retailers (IE, pet stores) want to buy normals. There are also some retailers and distributors looking for lower-end morphs (only a few I can think of would consider higher end morphs). So, you offer them your low-end animals in bulk, at a substantial discount, and if your price is right, they'll happily take them. For pet stores, all you have to do is undercut your competition to negotiate a good price--and the owner will frequently tell you what he's paying for comparable animals shipped to him from elsewhere. If you're local, it's a great deal for him--he gets to see in person before he buys, there is no shipping stress, and no huge risk, so it's really easy to sell to any local pet store that doesn't have an established deal with a distributor or breeder.

I wouldn't sell wholesale to any individual, because...they're not a business! Wholesale prices are for distributors and retailers, not retail customers.

Now, regular customers can certainly get quantity discounts! We always appreciate when people buy several animals from us. They can get some great deals, but no retail customer should ever expect to get actual wholesale prices. This is because retail customers aren't going to be buying big quantities of the same thing from one company every year (among other reasons).

Most animals sold wholesale will become pets. There are some exceptions, but that is generally what's happening. If you want the highest-end, quality animals, expect to pay retail prices...you won't find those animals being wholesaled. Finer animals are held back for individual sale, or for the breeder's own collection. Pet quality animals get wholesaled, if the breeder's production volume is high enough for that.

The advantage to selling animals wholesale is that you get them out of your racks--you no longer have the expense of feeding them, and labor of cleaning and caring for them, and you free up the space. This is why you wholesale your lowest-value animals, not your higher-end animals. If you think you can't sell an animal before the food and labor you put into it lowers its profit margin to a wholesale price, then you might as well wholesale it.

This is also why retail customers shouldn't even bother to ask for wholesale prices...not going to happen, and even if it did, why would you ever want to take a whole bunch of the lowest-end animals a breeder produced?

I guess they are thinking it doesn't hurt to ask, but it's pretty annoying when someone asks for a massive discount on a valuable animal.

Donna, I respect what you are saying but you dont pay sales tax on an out of state sale. If someone is going to buy 20 of your animals and they arent a "registered" business, you wouldnt give them a wholesale price (regardless of what morph it is)? Believe it or not, there are some people who will even buy high end in those quantities that would deserve a wholesale price. Realistically, I dont see much variance between wholesale and breeder prices anymore anyhow. There is a huge difference between retail and wholesale prices though.

As a buyer, I've never really distinguished between wholesale vs. quantity discounts; If I'm looking to set up a decent sized breeding group (say 10-20 animals), I'll expect to get *some* sort of discount based on volume and I don't care what you call it. I won't as for a 1.2 ratio gender wise if I do that, but I will ask for a 1.1 or about 1.1 I've done this setting up my house snakes.

The way I view it, if an animal's price is given individually, or in pairs, and I'm buying several pairs, I might as well ask. I'll be reasonable about what I expect (i.e. I don't expect to pay 75 instead of 200) but I'll also probably want a real cut on price. I realize I'll be getting "breeder's choice" versus my choice which makes sense; I don't want John Cherry to have to send me photos of every one of the gajillion house snakes he may have and have me spend the time to pick them out. Too much time on both our ends, particularly if I'm getting a break. I'll trust the breeder to select at least decent animals and call it good.

I believe wholesale to be when one business purchases from another business, tax exempt. I am both a hobbyist and a pet store owner. When I purchase animals for personal use I dont ask for "whole sale pricing" but I will ask for quantity discounts if I am purchasing in quantities. When I purchase animals for the store I usually do so at "wholesale" which does not always mean quantities(but usually does).

When I purchase animals for the store I buy wholesale, when I purchase for myself I may attempt to haggle (mostly when purchasing in person) or if I like the animal and I like the listed price I will just email and say that I would like to purchase it. When I buy animals for the pet store wholesale I do it mostly sight unseen. I prefer to be sent a wholesale list and I make purchases off it. I have a very small store so I normally never buy more than 1 or 2 of the same species at a time. But I do adhere to what ever the minimum $ amount to get the wholesale pricing.

Originally Posted by StrictlyExotics

Donna, I respect what you are saying but you dont pay sales tax on an out of state sale. If someone is going to buy 20 of your animals and they arent a "registered" business, you wouldnt give them a wholesale price (regardless of what morph it is)?

No. I would give them a nice quantity discount.