Retail & Wholesale

Less

SGF, Supreme Grumble Framer
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Retail & Wholesale

I’ve noticed lately a hand full of framing businesses that appear to play both sides of the fence, often with two names. I was searching for a discontinued LaMarche moulding when I called a company that named xxxxx wholesale. They answered the phone Museum and Corporate Frame. They said that was a retail business. I said I thought you were a wholesaler. We are, they replied. We used to distribute LaMarche moulding before they had their New Jersey distribution center, but we still have a lot of their moulding. Now, around here there is small wholesale company that has a pretty open door policy. They do quite a bit of framing, mostly for artists I suspect. I don’t do business with them because they are a pretty rag-tag operation, at least on the wholesale side. They don’t distribute any supplies. Even now online, I am seeing wholesaler/ retailer under one roof.

What the heck is going on here, as if I didn’t know, maybe I don’t?

So, is it legal to operate as a wholesaler and retail operation under one business name, or even two for that matter? Can I run two businesses under one roof, one called Less Frames and the other called Less Wholesalers? Can I start a wholesale operation offering distribution in a small region of my state? I would only care if the business did a little better than break even. The important part of this plan would be that I would have access to wholesale level pricing for my retail operation. Or, maybe I would be more profitable just being a wholesale business with an open door policy selling primarily to artists and hobbyist with or without a resale number.

Is it legal or cost effective to do both?

And no, Less is not loosing any sleep over this.
It's just a question.
 
Less,

I am the owner of a small Frame Shop / Gallery that 15 years ago did both retail & wholesale. I supplied about 20 frame shops in my area with chops length and mat board. I had to hire additional help and since I already occupied 3000 square feet of space had lots of room to store materials.

It allowed me to buy larger quantities at better discounts and made my retail side more profitable besides still maintaining a nice profit margin on the wholesale side. There is nothing illegal about what I was doing that I was ever made aware of.

After about 5 years of doing this, I finally gave it up due to the employee theft, waste, and general aggrevation that went along with the increased revenue. I've relocated to a 1000 sq. ft. shop and I'm the only employee. A lot less aggrevation, few mistakes, and nobody stealing from me. What a pleasure!
 
I don't think this is at all unusual. I used to get my matboard from a retail gallery and frameshop in my area who was also a full-line matboard distributor. They even delivered it and hauled it up a couple of flights of stairs. (Long story.) (Third story, actually.)

One of the big retailers in Milwaukee wholesales moulding and some euquipment.

Some of the really cool and innovative gadgets and widgets in our industry were invented and are distributed to us by retail framers who are in the best position to know what we need.
 
Vertical integration?
It is only annoying when they compete with you and try to sell you something, not illegal.
 
I guess it can work without conflict of interest.

Snafu seems to be filling a niche.

Old Grange Graphics does it well also. They sell prints, moulding and canvas transfers wholesale, then under another name DeNunzio, they sell retail framed canvas transfers through catalogs and online. They actually save me time by locating the print and selling it to me $1 above wholesale. They are a great company that honors good wholesale/retail price structures.

I just wonder if anyone is abusing the system by setting themselves up as a wholesaler for better pricing, when their real intention is retail. I guess it is a matter of volume.

Do you need to set up two separate companies? Do you sell moulding to yourself?

I should really go do some work! Well, at least Less is staying busy.

[ 03-05-2003, 05:00 PM: Message edited by: lessafinger ]
 
I narrowed it down to this--the only difference that I can see within my state between wholesale and retail is whether or not you are selling to a person for resale

(& around here that means they have to have a valid tax resale license # on file and you are selling them goods appropriate to their trade)

wherein you don't charge sales tax

OR

if you charge sales tax--whether the person is the end user or not.

Profit, profit margin, discount, mark up, margin, whatever are irrelevant.

You might want to check out your business license for your city/county/state for the other questions you ask as well as your zoning permit.
 
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