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  • #995294
    jules4848
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    Hello

    Advice needed please?

    I am new to business so have no idea on how to price my product.

    I would like help on my distributor and RRP price.

    My product fully manufactured and delivered to me is $4.50

    What would the wholesale price be?
    What would a distributor price be?
    What would be my RRP?

    Any help would be very much appreciated.

    Thank you.

    Jules

    #1200989
    Easysmb
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    Hi Jules
    Pricing is more like market based, but not cost based, unless your product is unique.
    It is better to find out your competitive products’ pricing, market position, channels etc to decide your pricing, channels.
    Good luck

    #1200990
    jules4848
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    Easysmb, post: 238216, member: 80732 wrote:
    Hi Jules
    Pricing is more like market based, but not cost based, unless your product is unique.
    It is better to find out your competitive products’ pricing, market position, channels etc to decide your pricing, channels.
    Good luck
    Hello

    Thank you for your help.

    My competitors are around $16 RRP.

    I still done know what wholesale or distributor prices would be?

    Thanks again.

    Jules

    #1200991
    Rohan@TD
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    We’re in the process of writing a blog post on exactly this – But it’s unfortunately not ready to release. There are sooo many different considerations and the post just keeps growing and growing.

    Briefly, the key factors:

    • Your wholesale price needs to cover all of your expenses. Sounds obvious, but this includes rent, power, water, internet, phone, office stationary, insurance , tax, accounting fees, bank fees, depreciation of equipment, repairs, marketing, wages, damaged merchandise, average cost of processing returns etc. etc.
    • Your business obviously needs to establish a profit margin, which can vary significantly, may or may not include your personal wages etc.
    • You don’t have to set a RRP, but you need to set a margin attractive to your retailers. Your retailers, traditional shopfront types, hold the most risk with your product and need to cover their own expenses during the sale of the item.
    • Consider your competition’s prices – Distributors and retailer. Why would I get it from you when I get a similar product from somebody else cheaper?
    • Branding is a key influencer. Are you manufacturing and marketing a superior product than your competition? If so, make the price reflect it.

    A retail margins vary depending on industry. But, 100% on top of the distribution price is considered reasonable – Remember all of the expenses they have! Therefore your wholesale could be = 16/2

    Its absolutely essential you calculate your costs correctly.

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