Mr. Einer, Your assumptions about mark-up and pricing have nothing to
do with the terms “wholesale” and “retail”. Nothing. State cod es
define those terms quite clearly and Federal Trade Commisssion
Guidelines exist as well. Those Guidelines MAY be used by a sitting
judge in any jurisdiction in the US as law, so, as a practical
matter, the Guidelines are often seen as law in the courtroom. When
they are NOT, the courts refer to State codes, all of which are
written in accordance with the F TC Guidelines anyway. There are a
few VERY minor exceptions, that have no practical importance.
WHOLESALE means the sale is taking place to someone who is licensed
to re-sell the goods, and the end prupose of the sale is to actually
re-sell the goods to another distributor or the end user. I buy a
diamond from a wholesaler through my b usiness with the intention of
re-selling it. If I’d like to make a profit, I must mark it up, but
the law does not REQUI RE me to mark it up. If I want to lose
money, that’s my own business. If I decide to wear that diamond
instead of re-sel ling it, I must pay the state either the
appropriate sales tax or a use tax because I have taken that diamond
OUT of the wholesale to retail chain and used it for my own
purposes. I have become the end user, and the state considers that
a “r etail sale” and the tax due and collectible.
RETAIL means the sale is to an end user, and the appropriate taxes,
if any, must be collected and forward to the state. Now, obviously,
most business owners BUY from a wholesaler (no sales or use tax is
due), and re-sell to an end user, hope fully marking up the piece in
the process. If I buy a diamond for $50.00 and re-sell it for
$50.00 I owe the state the a ppropriate taxes, because I made a
retail sale. If I sell that diamond to another dealer, for re-sale,
I don’t have to c ollect any tax because the tax is only due when the
goods pass to the END user. No one cares whether I pass it on to the
dealer for $5.00, $50.00 or $500,000.00, it’s still a wholesale
transaction, and the state requires that I have a signed affidavit
on hand from each business entity or person to whom I make a
wholesale sale. That affidavit says that they are not using it for
their personal use, they are re-selling it.
NOW…all states have laws which forbid me making an ad saying
"Wholesale to the Public". It’s misleading and deceptiv e. It has
nothing to do with comparative pricing or how much is charged, it
has to do with the NATURE of the sale, wheth er the state requires
taxes be collected. The “ignorant” (of the law) public thinks the
term “wholesale” means they’re g etting it at true dealer cost, and
that’s obviously not the case. As a seller, you CAN sell the goods
at your actual who lesale cost, losing money in the process, if you
wish, but you won’t be around long. If you calim "Wholesale prices"
and you are challenged, you must show your original invoices and you
better not have sold for a penny more than YOUR actual cost, or
you’ll lose your business, pay hefty fines and maybe spend time in
jail. ESPECIALLY if your competition complai ns to the state.
If you’re violating these laws you are guilty of deceptive
practices, Federal and state. If you cheat the public, you’d cheat
me. I don’t to do business with anybody like that, and neither
should you. Further, these people give an honorable business a bad
reputation, and when I discover someone doing that, I’ll complain to
the proper authorities. Even further, I’ll bet that our benefactor,
Dr. Aspler would not want that business or person on this network.
How’s that for a reply?