How do I determine volume discounts?

[DanvilleArtist]

I manufacture a bottled paint product. I sell to two internet distributors, and several retail stores. Individuals can also buy this product on my website for $4.25 USD (single unit). Recently a couple of "mom & pop" retailers have questioned my pricing structure, saying they should get the same discount the large distributors get (who buy about 500 bottles at a time at the cost of $2.12. The retail shops buy only a dozen or so at a time, so their discount is minimal. Is the unfair, or am I pricing this correctly? The larger the order the larger the discount, right? They complain that the larger distrubutors are putting them out of business. So I'm confused. I want the smaller retailers to carry my product, but I want to be fair to me. BTW, my cost is 70 cents per bottle.

Any thoughts on this please?

[minnesotacold]

I manufacture a bottled paint product. I sell to two internet distributors, and several retail stores. Individuals can also buy this product on my website for $4.25 USD (single unit). Recently a couple of "mom & pop" retailers have questioned my pricing structure, saying they should get the same discount the large distributors get (who buy about 500 bottles at a time at the cost of $2.12. The retail shops buy only a dozen or so at a time, so their discount is minimal. Is the unfair, or am I pricing this correctly? The larger the order the larger the discount, right? They complain that the larger distrubutors are putting them out of business. So I'm confused. I want the smaller retailers to carry my product, but I want to be fair to me. BTW, my cost is 70 cents per bottle.

Any thoughts on this please?

Common sense! Basically, you SHOULD not expect the same type of volume discount if you are only ordering 12 at a time. On the other hand, you do not want to lose them as customers. If I were you, I would meet them halfway, basically give them a better discount that what they are currently getting, maybe the average of what they are paying now and $2.12 and them encourage them to order more at a time in order to get a better discount.

[ttfing]

I see nothing wrong with this. Discount tiers are pretty normal for most distributors. My business partner buys wholesale pretty frequently from a motorcycle parts distributor. They have 4 discount tiers, I believe. One at $5000, $10,000, $20000, and the last is about $50000+.

In the end, it's up to you. If you feel really passionate about helping out the smaller shops, then so be it. Have you discussed this with them yet?? What was their response??? Most people can be pretty reasonable if you just explain things to them plainly.