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How To Set a Whole Sale Price For My Product?

by Evita
2 replies
I was contacted by an online retailer interested in selling my product. (I had not put any thought in wholesaling yet.)
My product retails for $38.95 which is a GREAT price and quite a saving for the consumer in many ways, not just monetary. (The reason for the low-ish price is that I'm the new kid on the block and want to get some sales with a lower price. I still make a nice profit...)

The company wants my whole sale price. I don't have it They said they usually do a 2.3 markup and that I should have at least a 3 tiered whole sale price list. With my current retail price, I could do the 2.3 markup they want to see and still make a profit that I would be happy with.

But.
How do I figure this 3 tiered price list? Are there industry normals? Also, the product is consumable, satisfied customers would purchase over and over. (In case that has any bearing on whole sale price)
#price #product #sale #set
  • Profile picture of the author KirkMcD
    Originally Posted by Evita View Post

    I was contacted by an online retailer interested in selling my product.
    Are they legit?
    They said they usually do a 2.3 markup and that I should have at least a 3 tiered whole sale price list.
    What is a 2.3 markup? 2.3 what? Percent? Times? Is that the actual wording they used?

    What about returns? How will you handle them? Will you allow the seller to return unsold goods?

    Can you handle large orders?

    There are a lot of factors to take into consideration.
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  • Profile picture of the author Jason Kanigan
    Pricing is a complex topic and there aren't any hard and fast rules about it.

    Here are three perspectives on the topic:

    Forbes Welcome

    Wholesale Pricing Tips and Formulas

    How to price your products - are your handmade product prices too low?


    I have my own, which is to first figure out how much money you want to make (a Lifetime Customer Value might be best for you rather than a total per time period).

    Once you know that number, you can back out into your price.

    You must know your costs. Material, labor, Customer Acquisition Cost (includes marketing).

    The links above give advice on what to do from there.

    I would say: what LTV do you want, or what lump sum revenue do you want to make over the next year?

    Now you can mark up to a level you feel comfortable...or at least where you know you'll make money.

    It's a good guideline, too, because you can now see if you're profitable within the retailer partner's parameters (which, despite what they will say, are arbitrary as well) or not.

    The real question is: do you feel there's fair value in the exchange? Or will you feel ripped off?

    Nobody else has the right to dictate terms to you. It's all negotiation, and you can always walk away.
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