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Help Me with My Wholesale Pricing

allthatjazz

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I am trying to get my product into retailers, and am having a difficult time coming up with my wholesale price. After googling, I found there are several different methods of coming to your wholesale price.

I have one retailer that has contacted me wanting to carry my product, and they are overseas.

Here is my price breakdown:
My cost: $7.12
Retail: $19.99

I was thinking of $13.00 - $14.00 for my wholesale cost, but is this too high for an overseas retailer? They will be paying for shipping and any additional fees.
 
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McCoyH

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Is it $7.12 SHIPPED both ways (to you from manny and from you to retailer?) or just production cost?

I'd say the $12-14 range wholesale would be ok. Depends on what type of retailers you're trying to get into.
 

allthatjazz

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Is it $7.12 SHIPPED both ways (to you from manny and from you to retailer?) or just production cost?

I'd say the $12-14 range wholesale would be ok. Depends on what type of retailers you're trying to get into.

The $7.12 is shipped to me. Not including shipping to a retailer.
 

Vigilante

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#1 it depends on the category and

#2 you might consider adding a PLEASE and THANK YOU to your request to get more responses.
 
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allthatjazz

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#1 it depends on the category and

#2 you might consider adding a PLEASE and THANK YOU to your request to get more responses.
Thank you for the tips Vigilante.

Could you please expand more on what you mean by "depends on the category". I've never come across anything regarding category during my research.

Thank you!
 

Vigilante

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:)

There are a few ways to look at this.

A wholesale club (like Sam's Club) might work on 15% margin, because their membership fees they charge provide their operating profit. So, as long as they make a 15% gross profit margin, selling memberships is how they make their real money.

Contrast them to a catalog retailer, who won't look at any item below $20, or any item with less than a 50% margin. So, the first criteria is : Who is the CUSTOMER and how do they make their money?

The second criteria is : category. Take a retailer like Wal-Mart. They make less than 10% markup on tablet PC. 10% on video game hardware. 20% on consumer electronics. 50% on accessories. 60% on apparel. 70% on private label food. 95% on extended warranties. Etc…

Those percentages are approximate, but just to indicate that every merchandise category is different. There is no standard answer to your question. If you are selling hammers, the margin requirement of the retailer is different than if you are selling soda pop. Every category is different.

Without disclosing the product itself, if you can indicate roughly what the large category is, I might be able to take a stab at it for you. Hardware? Electronics? Apparel? Housewares? Automotive accessories?

Anyway, the answer is going to vary by retailer, and by category. You can ask the retailer, and they will tell you. Granted, they will always give you BEST CASE SCENARIO but if you are the new kid on the block, and have an unknown brand, you may not have any strength in the negotiation anyway.
Hope that helps.
 

allthatjazz

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:)

There are a few ways to look at this.

A wholesale club (like Sam's Club) might work on 15% margin, because their membership fees they charge provide their operating profit. So, as long as they make a 15% gross profit margin, selling memberships is how they make their real money.

Contrast them to a catalog retailer, who won't look at any item below $20, or any item with less than a 50% margin. So, the first criteria is : Who is the CUSTOMER and how do they make their money?

The second criteria is : category. Take a retailer like Wal-Mart. They make less than 10% markup on tablet PC. 10% on video game hardware. 20% on consumer electronics. 50% on accessories. 60% on apparel. 70% on private label food. 95% on extended warranties. Etc…

Those percentages are approximate, but just to indicate that every merchandise category is different. There is no standard answer to your question. If you are selling hammers, the margin requirement of the retailer is different than if you are selling soda pop. Every category is different.

Without disclosing the product itself, if you can indicate roughly what the large category is, I might be able to take a stab at it for you. Hardware? Electronics? Apparel? Housewares? Automotive accessories?

Anyway, the answer is going to vary by retailer, and by category. You can ask the retailer, and they will tell you. Granted, they will always give you BEST CASE SCENARIO but if you are the new kid on the block, and have an unknown brand, you may not have any strength in the negotiation anyway.
Hope that helps.

Thanks for the help!

The retailers are not big box retailers. I am in a niche market in the health/fitness/sports category. These retailers are specific to the niche.

If I were to price wholesale at $14.00, that would give retailers a 43% markup, if my math is correct. But, that $14 would not include shipping, or any additional costs to their facility.
 
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Determined2012

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@Vigilante what if it was a shoe (not gym/ sneaker shoe) in an upscale location like Neiman Marcus or Saks Fifth Avenue?

What would things look like then?

Please respond. :)
 

dabelge

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I think you should try $10.00 for wholesale.

With a $19.95 Retail price a $10 wholesale is right on the money for the type of retailers you are going after. I sell product to specialty retailers and that's the margin they need or better yet offer them a product that retails for $24.95 for $10 that may help you get their attention and a chance for their shelf space. With a cost of over $7 your wholesale needs to be at least $15-18. Sounds like you have some work to do.
 

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