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How to Set Trade Prices? What %?

  • Thread starter Thread starter MarkPearson
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MarkPearson

I have had a few people contact me regarding me new personalised rose products.

They are after trade prices.

I am unsure what kind of prices are standard.

If I sell a dozen roses at retail for £33, I am unsure what % i should give to a wholesale / trade customer.

What is reasonalble?
 
Generally around 60%. They need a reasonable incentive to purchase the product and at the same time make a reasonable 'earn.' By the same token, you don't want them encroaching on an area where you may be able to sell 'retail' at your full mark-up.
Cheers, Nigel
 
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There's no right or wrong answer, in my view. Pitch the price at what the market will bear. The tendency, when you start out in business, is to price too low. It requires a bit of nerve to lose the odd enquiry on price.
 
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Margins for luxury goods range from a mean of 50-200%


Other factors that will affect the margin required include:

Sale or Return
Brand
Marketing/ advertising
Payment terms
Quality
Point of sale material/ stands
RRP
exclusivity
Target Market User Profile
Shelf life
Volume discounts
 
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When buying a product like yours Mark, I'd be prepared to have a smaller mark up than normal (say 20%) as the roses are an 'additional' service and not part of our core business. They'd be a benefit to the shop as they'd add interest to the shopping experience for our customers.

However, if someone came to us with a bridal or evening gown that we could only mark up by 20% we'd laugh!

Hayles
 
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I would suggest having a staggered trage price list based on quantity or turnover, the more they sell the cheaper they get.
 
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Hayles makes the similar point as to what I would also make. It depends on the product, its purpose and who is buying for retail.

For example, shops look to make 50-60% margin on low value items for retail (box shifting). However for unqiue items the % is sometimes lower, around the 20-30%

When my wife owned a gift shop she made around 200-300% on cards, 55% on general gifts, and anything from 15-30% on odd bespoke items.
 
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As already said, it really depends on how much effort your trade customer has to put in both to sell the product/service and support it. If all they are doing is promoting the product, but you are handling everything else then around 20% is reasonable (we have a number of products we sell on this basis, we take the enquiry, but the supplier does all the support et al), however the more your trade customer is expected to do to sell and support the product the more discount he will want/need, we have products where we do all the selling and all the support and we expect to make between 50% and 60% gross margin.

Andy
 
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