Question about wholesale prices

[rollo11]

I am considering a new business. I have done considerable research but am at a stumbling point. If I am selling product to to another wholesaler, how can I estimate pricing?

In other words, if my product has a retail value of $4.25 what can I expect to get from wholesaler? I have been estimating a 20% discount off my retail price but am not sure if thats accurate or not.

I am hoping that someone has experience that might be helpful.

[JSC]

Hi Rollo

Lets start out with a basic Suggested Retail Price. 1.00

To a retailer his normal discount is 40% off SRP .. his cost .60

To a Wholesale Distributor normal discount is 50 & 10% off of SRP on the 1.00 his cost would be .45.

When the Dist sells to the retailer with a 40% off SRP he would make 25%.

These are "Starting Points" and every day discounting BUT .. Early Buys .. Large Qunaity and Early Pay all can be factored in. Plus if You are going to go that route you need a Manufacures Rep who gets 10 % of what he sells it to the Distributor .. so the SRP 1.00 item is now down to you getting .405 And of course out or this also comes the 10 % FET and all other costs.

Hope this helps

JSC

[Old man in the boat]

and don't forget the excise tax

[Spike-A-Pike]

There are several points that you need to think about a little before you get into figuring out discounts.

First is what dose it cost to make the product and what is your time worth; that is your wholesale pricing begins.

Second, you have to figure out how you need to apply the 10% Federal Excise Tax and get an I.R.S. Form 637. The I.R.S. can assist you in getting that established.

Good luck.