How have online auctions effected wholesale distributor memberships?
Let’s answer this question with an example sometimes seen: An online auctioneer lists an item for only $1 (they paid for $15 wholesale). They get one bid. The bidder wins the auction at $1. The bidder is charged $30 shipping for an item that should have cost about $5 to ship. The auctioneer makes about $10 profit. The real issue begins when other retailers (non-auctioneers) of the same product cry foul to the wholesale drop shipper. The retailer, of similar item, sees the items listed and sold on an online auction for only $1. They accuse the wholesale drop shipper of selling to an online auctioneer at prices under the retailer’s wholesale cost. This results in many retailers abandoning the wholesaler as a supplier. The wholesaler ends up losing a bunch of retail distributors. They lose revenue. To correct the issue, the wholesale drop shipper will set up an ADA to make sure no one is selling their items on online auctions for under wholesale pricing. This does not mean you cannot sell
