Objects such as clothes, shoes, & video games / consoles are under strict licensing agreements between the manufacturer and distributor. Most contracts say
wholesale distributor / dealer buys from the manufacturer and are only allowed to sell at MSRP price. License
prevent wholesale distributor to sell
wholesale to everyone, except some retail store chains. In some cases the
wholesaler / distributor, retail shop (what retail store you know that sell
wholesale?). This means that they are an authorized dealer of that certain brand name manufacturers. A dealer is not allowed to sell below MSRP either.
If the manufacturer says their distributor not to sell to home business, they would rather not. You need a physical store front to buy from certain manufacturers or
wholesalers. If you want to become a reseller of these big name brands, be ready to be killed. You must be an authorized distributor / dealer to buy
wholesale for certain name brands. Some manufacturers make use distributors at an intense and lengthy process to get approved. Some manufacturers such as Sony or Nike would only sell to certain retail outlets. Your average mom and pop retail store in the city, would find it difficult to acquire such a contract. Otherwise you would see a Nintendo Wii, which sold at every corner store.
If the distributor broke their agreement with the manufacturer they would be sure to be in court and lose their hard-money account with a large manufacturer. If the producer had a big contract like Sony or Nike, you can be sure that the
wholesaler could not stay in business for very long. It would be too big a loss. Most companies will not be able to afford to stay in business if they lost a contract that way.
The fact is Do not take it to attack, but companies like Sony and Nike do not want to take a chance for a home business ruin their reputation with some products. The risks are much more engaged in small companies compared to companies that are well established companies. Not only that, but if the producers decided to let
wholesalers ever sell the home business, this is what would happen:
Domestic firms with little overhead and would be able to charge lower prices than in stores. Retail outlets have large contracts with companies like Sony and Nike. But the stores have to pay real bills, insurance, and pay many employees, among just a few things. The retail business would have to sell at MSRP to make money. Although every manufacturer wants to sell to MSRP, does not mean everyone will listen. So lower prices than the MSRP will pop out all over uncontrollably. Retail Stores would take a huge loss. In the long run it will hurt the manufacturer.
But if the producer establishes a strict licensing agreement with only the
wholesalers, they can control who gets the product at
wholesale prices. They could even trace the
wholesale distributor to break the rules, if they decided to break them. If the small home businesses have to buy products at wholesale prices, producers would not be able to trace the poor sales of less than MSRP. It is what it's all about, a control game.
This also cuts down on counterfeiting rings. It will be easier to spot the people who sell counterfeit goods at lower prices if they know all their wholesale distributors. If Sony or Nike find anyone selling well below MSRP, they will do an investigation. If this proves not to be an authorized distributor, they would go after this company. Counterfeiting has become a major problem throughout the world.
There are all sorts of reasons other big name manufacturers tell their wholesale distributors not to sell to anyone at wholesale prices. Most, if it is just to cover their asses over licensing.
I'm not saying that Sony will not let any of their dealers sell wholesale. But certain products that they make as Playstation, are under strict licensing agreements. Does not expect to buy them at wholesale prices if you have a home business. You may be able to find shoes or clothes to buy wholesale also.
But do not expect to buy big name brand clothes or video games at wholesale prices. It is impossible to buy them at wholesale prices if you are a private company. Anyone claiming to sell those products to
wholesalers, is either lying or sale of counterfeit goods. Or they can be a crazy company does not care about their strict licensing agreement between manufacturer and distributor. If so, they will soon be caught.
Times may change, but right now, when a new shoe or a product comes out that is in high demand, there is usually not enough man power to create products fast enough. So manufacturers try to control everything as much as they can to squeeze the most profit out of it.
When the product brakes in demand, you may notice the products licensing may change and will be available to all at wholesale prices. But new products are the big money makers for manufacturers will rarely be available to buy at wholesale level unless you are an authorized distributor or dealer. And that day may never come up with some products.
There are plenty of other products which are subject to strict licensing agreements such as this. Everything from a professional sports clothing to DVD, are under strict licensing agreements. Most of the time you will find them, are protected by strict licensing agreements are the ones who are most counterfeited.
Anyone who claims to have wholesale prices available for such products is likely to sell at reduced prices, not wholesale. There can be lots of reasons, but if they are an authorized dealer, they will get into trouble. It could also be a scam.
