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HomeJewelry InformationLectureWhy are prices from other seller cheaper than my wholesale jewellery price?

Why are prices from other seller cheaper than my wholesale jewellery price?

Why are prices from other seller cheaper than my wholesale jewellery price?

This time, it’s about the question “Why are prices from other seller cheaper than me?” related to pricing.When we browse through offline stores or search online shopping malls, we sometimes come across stores or online shops that sell products at prices similar to those sourced from wholesale jewellery market.

Then a question arises.
“Why are they selling at the prices I purchased from wholesale jewelry market?”

We can consider various cases.

  1. Purchase cheaply from regular suppliers in the market

    When we look at wholesale suppliers in the wholesale jewelry market, the prices are usually quite similar. However, there may be slight differences in prices between the main markets

Typically, the shops around the main market may have slightly lower rent than the main market itself. Also, to attract customers to their own stores, some places with similar designs might sell items slightly cheaper. For instance, for earrings, there are often places where the prices differ by about 1 to 1.5$.

From what I know, there are shops with two locations, and they sell the same products at slightly higher prices in the main market location. In other words, they search for locations where identical products are available at lower prices than those in the primary market.

If you maintain a long-term relationship with wholesale suppliers who sell at a cheaper rate, you might even get a 5% discount.

Why 5%? In korean market, there are export agency firms. When buyers from Japan or China visit, they guide them around the wholesale jewelry market, help them place orders, and collect products to be shipped at the same time. In doing so, they may charge 5% to the buyer and 5% to the wholesaler.

So, for wholesale suppliers, since they are already paying a market average of 5% in commission when exporting, they may perceive giving a 5% discount to long-term customers as feasible. This is one way of purchasing cheaply.

2. Purchase dumped goods

In fact, when searching the internet, you sometimes come across companies selling dumped goods. They may call wholesale suppliers in the market or accessory manufacturers and ask them to sell excess stock at dumped prices. Some companies also buy excess stock when cleaning up wholesale stores or offices.

Sometimes, they distribute business cards at wholesale jewelry markets indicating the purchase of discounted goods. When encountering wholesale or manufacturing businesses closing down, you might end up buying excess stock at dumped prices.

Goods sold by dumped goods sellers often have tacky designs or poor quality. Although the prices may be cheaper than those in wholesale markets, many times, you’ll find the designs to be unattractive or only the remaining stock designs that nobody wanted initially.

However, I’ve encountered cases where goods purchased from dumped goods sellers turned out to have good quality compared to their prices. So, it’s important to be aware that discounted goods may also be available for sale elsewhere.

3. Selling leftover stock at cost price or lower

This is probably the most common case. In offline stores, you often see bait products placed in front of the store or in shopping malls, especially for items like earrings, where they bundle several pieces together and sell them as a set.

Selling leftover stock at cost price or lower

Selling at cost price or with minimal margin for the stock you have is good for cash flow and creates a sense of event in your store, attracting customers.

For example, people frequently encounter events such as random box sales, $1 special sales, today-only specials, all designs for $1, etc.

This method is inevitable when selling in offline stores or online shopping malls.

4. Direct purchase from China

I haven’t personally visited wholesale markets in China. From what I’ve heard, though, places like Qingdao, Yiwu, and Guangzhou have wholesale jewellery markets where you can directly purchase finished or semi-finished accessory products and materials.

wholesale from china

Many local wholesale suppliers also go to these cities to buy finished or semi-finished products and then bring them to Korea for plating before distribution.

However, nowadays, labor costs in China have increased, so it’s not as cheap as before. But if you go further into smaller cities from Yiwu, you might find better prices and quality.

People say that Yiwu resolves most problems, as traveling further takes several hours. Consequently, larger wholesale markets like Yiwu are where most deals occur.

Actually, you can easily find agencies that do purchasing from Chinese wholesale markets by searching online. Of course, there’s a commission of around 10%.

Some wholesale or franchise businesses even set up offices in China, directly purchasing materials and assembling them before importing to Korea. Since this process is essentially the same as what occurs in Korean wholesale jewelry markets, it helps ensure price competitiveness.

So, I’ve heard that some of the top-tier franchise stores or accessory shopping malls are simultaneously purchasing from Korea and China’s wholesale jewelry market.

I once saw a amazon selling a set of 10 earrings for 10$. With a larger margin and increased price competitiveness, purchasing from korea and China simultaneously can be a strategy.

5. Purchase from Alibaba, 1688.com – Direct purchasing from Chinese websites

These days, the ordering systems of Alibaba and 1688.com are very well-developed, so you can directly order from their websites. However, there’s often disappointment as the actual products may differ slightly from the pictures.

alibaba wholesale

While it’s easy to find many wholesalers with good designs and prices, there’s also the risk of disappointment when the actual product doesn’t match the perceived quality from the pictures.

However, with so many suppliers available, you can also find good designs and prices through these platforms.

But when you browse Alibaba or 1688, you may be surprised to see suppliers selling in small quantities. China is known for mass production, so how can they sell in quantities as low as 1 or 2pcs?

It turns out that many suppliers on these platforms are not factories themselves. Instead, they are wholesalers who source products from factories and then sell them in smaller quantities. So, it might not always be direct factory dealings.

For example, I once bought a wired switch for smartphone photography (a switch pressed via wired connection for taking photos) from Alibaba for 0.8$, but it was being sold for about 3$ on a Korean social commerce platform. You’ll be amazed at how much cheaper the prices are when you search the site.

6. Selling cheaply sourced goods from wholesale jewellery market or at low prices as part of a sales strategy

This is a strategy I’ve used quite often in the past. For instance, basic ring earrings or small stud earrings are items that can be easily compared in terms of prices.
For example, the wholesale prices of ring earrings in korea wholesale market don’t differ much.

jewelry sales strategies

So, by selling basic, commonly compared items at cost or with very little margin, customers might perceive,

“Wow, this place sells products cheaper than others!”
just by comparing the prices of these earrings, which serve as simple benchmarks.

For instance, it’s better to sell basic piercing or single cubic earrings at a cheaper price as bait products, while selling other products at regular prices.

In reality, there isn’t much difference in prices at wholesale jewellery markets. Even for retailers who buy in bulk, there’s a limit

So, even if someone else is selling similar products cheaply, it’s good to think of one of these various strategies and benchmark while doing so’

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