Wholesaleing/Selling product to a retail store

[FlaxRelax]

Hi-

I recently started a business, and am now in the process of selling my product to local stores. However, I'm having difficulty with pricing. How do I go about coming up with wholesale pricing? It costs roughly $6.00 to make my product (not including labor & electricity) and I typically sell them for $18.00 at craft fairs and through my online shop. Ideally, I'd like to sell to a store up-front, but am not opposed to doing a split deal (40%/ 60%) Thanks. Any and all advice is greatly appreciated.

Jamie E.

[silver753]

Most of the time (in the motorcycle industry) aftermarket items have roughly a 33% discount to dealer. If something has a MSRP of $100, we would expect to pay roughly $66 for the item. Some items that have good margins, you could get for maybe $60 or $62. Bad margins would have us buying it for $70 or more. Bear in mind these are aftermarket items I'm talking about, OEM margins are sometimes about 10% to 15% better.

So if you were to come into our shop, something that retails for $18, we would expect to pay anywhere from $11 to $13 for it. Make sure to think about shipping/delivery costs. If it costs $12 for an $18 item, and you pay $8 shipping, you would lose $2 if you sold it. Some places require a 2 or 3 item minimum, or a minimum dollar amount purchase. Some places don't mind if you buy just one, but the shipping/delivery cost will get you.

Distributor costs are usually 30% off of what dealers pay. So a rough scenario would go like this... Retail $18, dealer cost $12, distributor cost $8, and manufacture cost of $6. That's pretty good margins for you if you stick to dealer direct sales, if you go through a distributor, you need to move huge amounts of product to do well, but that's usually the goal.

Curious, what are you selling?