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Who makes more profit?

ahmedo24

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#1
In the line of business especially in manufacturing or production business , there are channels of distribution which starts from the manufacturer -wholesalers - retailers and finally the consumers. Based on your experience who makes more profits amongst these channels?
 

Gabbar

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#2
I think that depends on the product and brand. Like Lay's take potatoes at a very less price from farmers and sell its potato chips at a very high price.
 

Kei

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#3
There's profit to be made at all levels in my opinion. The manufacturer may buy cheap raw materials and charge for materials all the way to production while selling. The wholesaler charges including all the expenses procured before bringing to the retailer. Retailers buy at that price and hack their selling price for gain.

Business is aimed at gain and no one really wants to indulge If they aren't taking money from the consumers of products and services.
 

ahmedo24

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#4
There's profit to be made at all levels in my opinion. The manufacturer may buy cheap raw materials and charge for materials all the way to production while selling. The wholesaler charges including all the expenses procured before bringing to the retailer. Retailers buy at that price and hack their selling price for gain.

Business is aimed at gain and no one really wants to indulge If they aren't taking money from the consumers of products and services.
Agreed but did you also believe that the retailers do hike prices much more sometimes especially if they are sole distributor of that commodity in a community, this happens more in rural communities.
 

Gabbar

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#5
As I earlier said it also depends on the product. Take for example Sugarcane, the farmers are paid very less but when we get a good quality sugar after some processes, it's sold at a very high price.
 

Kei

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#6
Agreed but did you also believe that the retailers do hike prices much more sometimes especially if they are sole distributor of that commodity in a community, this happens more in rural communities.
Yes I agree with you. This happens because they have no competition in that place. I seen cases where prices of products go down once there's another supplier. They start having bonuses and promos.
Post automatically merged:

As I earlier said it also depends on the product. Take for example Sugarcane, the farmers are paid very less but when we get a good quality sugar after some processes, it's sold at a very high price.
Some higher prices come as a result of quality. The value of the sugar is lesser than when it undergoes processing and packaging. Money is invested for that to happen so it is only logical for the price to be higher.
 

arunima25

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#7
I think that they make profit at all levels for the business to run. The whole saler and retailer can play a bit with the hike and eventually can make a little extra profit. Their profit also depends on the competition that they face in the market.
 

Junrose123

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#8
I think manufacturers would have the most profit because they can buy cheap raw materials for their products and sold it at a better price to the wholesalers. The profit would depend on the type of raw materials to be used.
 

Kei

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#10
But manufactures have to pay it to the workers and also to maintenance of their unit where the product is manufactured.
There are costs and expenses on every level. If Wholesalers aren't getting supplied by the manufacturer Also have to transport goods to different locations. They also have workers to pay. Retailers also have expenses they incur.
 

Junrose123

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#11
I think it is just natural that the manufacturer may incur expenses but the good thing here is that they can easily sell their products without any problems. All they need is just to produce products for the wholesalers.
 

ahmedo24

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#12
I think it is just natural that the manufacturer may incur expenses but the good thing here is that they can easily sell their products without any problems. All they need is just to produce products for the wholesalers.
The most channel that faces challenge in term of sales is still the manufacturer cos they do not sell in small units but in bucks, so they need to get their marketing strategies right, cos there are lots of competitors around.
 

Junrose123

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#13
@amehdo24 yes you are right in that, this comes now the strategy that manufacturers do in order to sell their products to the wholesalers. I know that manufacturers would really do a great job on it since they know what is the best.
 

arunima25

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#14
There are costs and expenses on every level. If Wholesalers aren't getting supplied by the manufacturer Also have to transport goods to different locations. They also have workers to pay. Retailers also have expenses they incur.
You are right in saying that there is cost and expenses involved in every level. Every level has to get profit for the business to run successfully.
 
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#15
The manufacturers profit more according to my assessment because they are the ones to fix the initial price which I know the profit will be determined by them and they make more sales too because wholesalers,middlemen and big retailers would be buying from as well. Some manufacturers even stamped the selling price on the products before packaging for sale,so in the case consumers would know and can't pay more which makes the latter profit static and their profit limited.
 

Gabbar

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#16
These days even sellers are making more profits after they properly pack the material and ship in distant places, they can ask for more profit and most of the times they get that.
 

ahmedo24

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#17
The manufacturers profit more according to my assessment because they are the ones to fix the initial price which I know the profit will be determined by them and they make more sales too because wholesalers,middlemen and big retailers would be buying from as well. Some manufacturers even stamped the selling price on the products before packaging for sale,so in the case consumers would know and can't pay more which makes the latter profit static and their profit limited.
You have a very good point and I agree with you to a very reasonable extent, the risk the manufacturer also face is that when there is failure in their production process , they will be one to bear the loss but the retailers or wholesalers won't bear the loss provided it is not as a result of increase in price of raw materials
 

Gabbar

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#18
Manufacturers bear more risk but they add its cost in the product and can insure products or raw materials like that.
By working on larger scale cost of production can be reduced and manufacturers can make more profit.
 

Gabbar

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#20
This depends on a product. For example, if we talk about sugar, the farmers get a lesser share when they plant sugarcane but those middlemen makes more money but even the stockist makes more money selling it.
 
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