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Yes, but when 50 million people buy 50lbs bulk lots from hundreds of Costco's (and other wholesalers) across the country, that approaches, maybe exceeds the man
by SkyMarshal 14y ago
Yes, but when 50 million people buy 50lbs bulk lots from hundreds of Costco's (and other wholesalers) across the country, that approaches, maybe exceeds the manufacturer's.
- HeyLaughingBoy 14y agoIt doesn't matter if, in aggregate, 50M people buy more than a manufacturer does. Each of those people will still get worse pricing than the single large-volume manufacturer would. The economies of scale in producing the raw material will likely mean that its price will drop a bit, but the guy buying 5 tons a month will always get a much better price than the guy buying 5 lbs a month. Even if there are 50 million guys doing the same thing.
- SkyMarshal 14y agoThere's a little markup at the wholesaler, but if a wholesaler like Costco buys in bulk they get the same deal as a manufacturer buying in bulk. The price each individual pays approaches that of the manufacturer, enough to make this a viable alternative. This is nothing new.