QUOTE(alyssia1 @ Feb 19 2006, 04:41 AM)

There are many places ot buy viiolins very cheaply, that say the instrument is worth much more than you pay eg buy for $59, retail price of $699. If this is not true, which it seems hard to believe, how can they advertise it as such? Isnt it illegal to say lie like that? Or is it true that they are great value?
It works like this, Alyssia.
There are hundreds of factories in china producing violins. Now, the wholesalers can get the best prices because they are in a position to place very large orders, tie a great deal of money up for a long time, and often (as is the case with one major UK wholesaler) they actually have employees who can speak the language fluently and can go out to china to source instruments direct. And of course they have high overheads and they have done the sourcing so it is not entirely unreasonable that they should make a very good profit. One wholesaler admitted once, to a retailer we know, that a violin case in their catalogue that has a list price of £60 actually comes out of China at $4. Chinese labour is very cheap and competition is intense. I can assure you that the retailer isn't getting most of that markup!!
Small independent retailers such as ourselves cannot get prices anywhere near as low as those that can be obtained by a wholesaler, but we can get a price that would enable us to buy direct from China at a lot less than we could by through a wholesaler and to sell for a lot less than the list price of a comparable item from a wholesaler whilst still making more profit than we would by using a wholesaler. It does require tying ones money up for months at a time and that is probably why not many retailers do it.
Now, to give a quick factual example, there is one particular violin that we are desperately trying to shift (so far we have sold none at all - everyone prefers the Gligas) which we estimated, based on our knowledge of the competition and mark-ups, would sell at about £1200 retail if purchased through a wholesaler. We originally had it listed at £400, working on about half as much profit again as we get if we buy a violin through a whoelsaler and sell at the list price. So we get 1.5 times the profit, the buyer gets a violin for 1/3 of the price, the Chinese company that makes them probably gets something like six times the price they would have got from a wholesaler, there is only one in the chain who loses out. But if we listed that violin as "list price £1200" that would mean very little because we didn't pay anywhere near as much as we would have to pay to buy a comparable violin from a wholesaler.
Liz
Liz