Home – New Forums Logistics How to determine retail price markup? or whats my wholesale price?

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  • #979167
    clevermummy
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    Hi everyone,

    Apologies if this has been answered before but I did a bit of a search without much luck.
    Some background, I have invented something for the baby/kids market…I have done my patent, trademarks, website, I have a great manufacturer and I’m just finalising my packagin etc I’ve determined my Cost of Goods Sold, indirect costs, Gross profit margin, my markup rate and I have some idea of what I’d like to sell it for….my problem is how much do I charge as a wholesale price? what do online baby/kids businesses typically charge as their retail markup?
    Here are some numbers if this helps;
    Total expenses per unit (cost of good sold + indirect costs) = around $6
    I was hoping to retail at around $15
    And would like to make a profit of around $4 per unit
    But what kind of markup would retailers want? 50, 60 70% or more?
    And obviously if I sell to a distributor I would lose even more of the profit.
    I was thinking about ringing some businesses and ask straight up but they may not even tell me???

    Very grateful for any advice!
    Sarah

    #1112477
    MyGreatIdea
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    Congratulations on getting this far…it’s a pretty exciting time !!

    My suggestion would be to find out what your customers perceive the value of your product to be. It’s pointless setting a retail price, either from costing or what you want to receive, if the market isn’t prepared to pay it.

    Take your product to a playgroup and get some feedback directly from the people who will be buying. Let them use/trial/test the product and ask them what they think, how much would they expect to pay for it.

    From there, you can start to work out your margins.

    Good luck

    Wendy :)

    #1112478
    MH08
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    Usually, its;

    How many units + ‘unrealised’ amount of sale + marketting + workers + GST and so forth you get the idea, but it always comes down how many you think you can sell and how many you have ordered also.

    Also look at products that are similiar in comparison to your own product, anything newly invented is slightly different from an existing product.

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