If your business is expanding and you need some advice for starting out your wholesale process, we’ve got some advice for you!
Setting Product Prices for Wholesale
1. Conduct market research
See what similar products go for at similar stores in similar areas. Knowing the price of other products will help you price your own competitively.
2. Mind your profit margin
Consider how much your materials cost and the value of your labor/time to set your price.
Wholesale Prices Are…
- For the store/company purchasing your product to also make a profit.
You must guarantee that your price point is valuable to you but also low enough that they are able to sell your product and get their money back and then some.
- Usually around a 50% mark-up.
Example: If it costs you around $5 in labor/materials to make, consider selling your product at a wholesale price of $10 to give you a $5/unit gross profit margin.
Wholesale Prices Must Be…
1. Lower than your general store prices as the customer will be looking for a deal.
2. Competitive!
Customers will not want to pick your product, no matter the quality, if it is way above or below the usual market price.
Wholesale Prices Can Be…
1. Flexible!
A price that works one month may not be feasible for you the next. Consider changing it in very small increments to remain competitive yet realistic.
2. Formulated
There are many different formulas that businesses use to calculate their wholesale pricing.
Consider this formula for your business:
- Supplies +Overhead Costs + Labor = Break Even Price
- Break Even Price x 2 or more =Wholesale Price
- Wholesale Price x 2 or more = Retail Price
Factors to Keep Under Consideration
1. Inventory Management
Before you begin selling items wholesale, ensure that you have the ability to keep up with potential orders.
2. Profit Margin and Customer Satisfaction
Make sure that your customers are ALL happy and satisfied and then your products will have the highest recommendations and ratings!
3. Self Evaluation
If the final resale price is not what your product could be worth, consider your workflow and production decisions. You may need to make adjustments to ensure that wholesale is a profitable business for you and the potential buyers.
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Bulk Apothecary makes no claims of “expert status” and the company will not be liable for any losses, injuries, or damages from the use of the information found on this website.
