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Multiplier

by mgabriel
5 replies
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I am working on setting up an account with a vendor and said that my multiplier would be .60. Can someone explain? Is this the same as saying discount?

Thanks in advance...
#multiplier
  • Profile picture of the author Auctiondebteliminator
    Well, I'm guessing (and I'm hoping this ISN'T THE CASE) because it shows bad vendor understanding of market worth of products.

    Especially if he's making asinine blanket statements like this.

    What he's saying is that 'Every product you see here you make a 60% markup.'

    If THAT'S the case, I'd run. Markets tell you how much items sell for... not blanket statements like that.

    However, if he's saying that you get a .6 multiplier as a DISCOUNT, then that means your PRICING would be 60 percent off the product catalog price.

    But even THEN I'm wary.

    Because it's a blanket statement made WITHOUT a market value for the item.

    What the supplier HASN'T told you is:

    Their shipping costs-
    Dropshipping fees
    'Other hidden fees'

    You need to know an ACTUAL total cost to acquire for the item

    And then find the ACTUAL market worth of the item

    And then subtract the deductions to find the profit.

    Essentially throw their 'MSRP and MAP' pricing out the window, research the ACTUAL market worth based on DATA, and take the supplier deductions, and then pitch the supplier a TOTAL cost to acquire based on that data.
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    • Profile picture of the author mgabriel
      Thank you for taking the time to explain the term multiplier. The vendor well known in the industry. I was sent guidelines of setting up a wholesale account with them. Once again, thanks.
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  • Profile picture of the author DejaS
    I would have thought that a .60 multiplier would be more like my example below, could be wrong but this is my understanding of multiply...

    $100 (listed price) x (multiplied by) 0.60 = $60 (Cost price?)

    Means a 40% or $40 profit?

    I wouldn't deal with anyone where I have to work out how to work out their figures, if that makes sense.

    That is just my opinion though you can see 2 people here (Me and A.D.E) and we both have a total opposite way of working those numbers out and we are probably BOTH wrong if you ask the person to explain themselves.

    Deja
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  • Profile picture of the author Danceparty
    I agree with deja. Why not just ask what your discount/margin is going to be and stop the guessing work.
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  • Profile picture of the author Auctiondebteliminator
    Yeah,

    Even I expressed doubt over what I was calculating.

    But the fact remains is that the supplier is basically TELLING you what your profit is going to be?

    That should never be the case. Since it is MARKETS that dictate that.

    When I go to a supplier, I always tell them: "Let me take a look at your pricelists, and I'll get back to you on my pricing after I've gone through your catalog. I need to do my market analysis"

    I never let anyone do my research for me.

    So the fact that the supplier is confusing in the first place is a red flag.
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