Every selling company has struggled with pricing their products at one time or another, be it wholesale or retail sellers. If you’re struggling with this, you’re not alone. There are many mathematical formulas used to determine a product’s price, profit, markup, markdown, profitability, and sales history. Thankfully, there are only a few things you need to know when pricing your direct-to-consumer sales and wholesale products. Here, we’ll walk you through some of those formulas and some steps you can take to create a successful pricing strategy for your products, whether you’re selling wholesale, retail, or both. Gua Sha Wholesale Price And Retail Price Wholesale and retail are two fundamentally different processes: Wholesale involves moving goods from manufacturing to distribution. Retailing involves acquiring goods and selling them to customers. Manufacturers or distributors sell goods to retailers at wholesale prices. The retailer then sells the same product to the consumer at a higher price (retail price). What is Gua Sha Wholesale Pricing? Wholesale pricing is a relatively favorable price offered by the seller to the buyer when the buyer provides the seller with an order of a considerable number of products. Usually the price offered by the wholesaler to the retailer. The goal of wholesale pricing is to sell a product at a price above the cost of the product, thereby earning a cost. For example, for the manufacture of a gua sha board, the sum of all costs such as labor costs is $1, then the wholesale price of the gua sha stone can be set at $1.50, so that there is a profit of $0.5 per piece of gua sha board sold. It should be noted that the wholesale price is not fixed, it will fluctuate up and down with the order quantity. What is the Gua Sha Retail Price? Retail price refers to the final selling price set by the retailer for the final consumer. Retail pricing is entirely up to your customers. i.e. how much your customers are willing to pay for your product. Your pricing can be less than their maximum affordability, but not more. This is the tricky part of retail pricing because the answer to this question is often fluid. Suppose a retailer gets a product at a wholesale price of $5 and wants to make a profit of $5. At this point, the retailer will price the product at $10 in-store. This is called cornerstone pricing. But if the retailer wants to make more profit, that price will go up. As a Gua Sha wholesaler, we sometimes offer our customers a suggested retail price (SPR). Customers do not have to follow our suggested retail price to set prices, we just provide a reference value. How to Calculate Wholesale Product Pricing? 1. Research your market: How to set your wholesale prices? First of all, you need to know your position clearly. High quality brand? A low-priced brand or a personalized brand? Different positioning determines your image in the eyes of customers and also determines your wholesale price. Generally speaking, in terms of price, the wholesale price positioning of brands that focus on personalized customization is the highest, followed by high-quality brands, and finally the brands that focus on low-price strategies. If a lower price point is your competitive advantage, keep that in mind when doing your research. Know your break-even point and use the break-even point formula to calculate that number. If your target customers are more budget-conscious or looking for high-quality, high-end products, consider these factors when conducting market research. 2. Calculate the Manufacturing Cost of Your Products Cost of Goods Manufactured (COGM) is the total cost of manufacturing or purchasing a product, including materials, labor, and any additional costs required to put the item in inventory and prepare it for sale, such as shipping and handling. The COGM of a product can be determined by the following calculation: Total Material Cost + Total Labor Cost + Additional Costs and Overheads = Cost of Manufactured Goods 3. Calculate Your Wholesale Price After researching the market and calculating the manufacturing cost of the product, we can start to calculate our final wholesale price. Absorption Pricing Absorption pricing refers to the consideration of all relevant costs, including fixed costs and profit margins, when determining a price. It is called “absorption” because all costs are consumed in the final price of the product. Wholesale price = cost price + profit margin For example a rose quartz gua sha board costs $1.50 to manufacture and you want a 40% profit margin. Then the wholesale price is $1.5 + ($1.5 × 40%) = $2.1. Advantages of Absorption Pricing It is easy to use and does not require any training or complex formulas Your profit is almost guaranteed. If you can count all your expenses, you can potentially make a decent profit Disadvantages of absorption pricing Pricing gaps arise frequently and do not take into account any competitor pricing This approach does not consider value perception. You may be charging too much to send potential buyers to other providers. Differentiated Pricing. Differentiated pricing is a wholesale pricing method used to optimize return on investment by calculating demand for a product. In this case, different buyers in different situations pay different prices for the same product. Also known as demand pricing or time-based pricing, this approach is based on the idea of ​​a buyer accepting to determine the price in any given market condition. For example, if you sell swimsuits, you can sell them at above average market value during peak season. You’ll notice that at retail, swimsuit prices jump up quickly at the start of summer, then fall back when demand drops. This also applies to areas where there is less competition and customers typically buy products at higher prices, such as beach resorts or airports. Using differentiated pricing, wholesalers can also offer products at lower prices. For example, if you have too much old stock on hand, you can do a last-minute flash sale, walk away, and make … Continue reading Product Pricing: How to Pricing Your Products Wholesale and Retail?