Depending on what you are manufacturing you probably need to give a good sampling of products to your sales reps that will be on the road. It may help to look at what tools your competitors are selling with and how they are doing currently with those tools.
If you are showing at market, discuss the amount of room you have to show and what is best to show in that space. Think best sellers. Think anything new.
Sales reps generally do not want to lug around a bunch of samples. However, they do want the newest, latest, greatest products to show. If that means sales sheets, catalogs, samples, you need to determine this. If you are lucky, you may friend some sales reps who give you good advice in this area. It is always much better to be perceived as being generous with your samples versus being stingy. If you are perceived as being too tight fisted, you actually might cut off communication from sales reps and customers that could potentially be big orders!
It is important to arm sales reps with whatever you can before they go to market. EDUCATE them with emails or letters directly to them. Once they get to market every other company will be trying to get their attention. If you can, consider Early Bird Specials before market for businesses that make appointments or place orders before market begins. If they order prior to market, allow them to continue at the Early Bird Rate when they get to market. Naturally, have a market special also.
If you do not show at market you definitely need to look at show dates anyway! It is even more important to be creative and get your "NO MARKET" specials out well before the show dates. Consider it a market before market. If you do not do this, those dollars will be spent on items shown at market.
In general, do not give one of everything you have to sell. Reps need best sellers. If those come in various patterns/colors, choose one pattern per style. Personally, I would get together a group of people in your home town to help choose the samples. Do not just do this yourself! Have a varied age and ethnicity group to choose. Best of luck to you!
Providing marketing tools and communication assistance needed for sales representatives to maximize their efforts.
Showing posts with label new product. Show all posts
Showing posts with label new product. Show all posts
Friday, June 28, 2013
Tuesday, April 12, 2011
How to set a Wholesale Price
Years ago I created a product to be sold wholesale. I spoke to numerous successful business owners trying to avoid obvious errors. I was repeatedly told that marketing was the biggest expense. When working on my wholesale price, I tried to add in that cost and I miserably failed. Hopefully I can help you if that is what you are needing.
There is a very delicate balance in creating a wholesale price. I've run across numerous formulas each claiming to create a wholesale price. I've learned that there is no magic pill to create a wholesale price but the price you set is very important. If it is too low you may lose money and if it is too high you won't sell your product(s) fast enough.
Every article will tell you that you need to look at:
Cost of Goods- Price paid for the product (actual)
- Shipping cost to get the product to you
Overhead Expense
- Allocate a percentage of operating your business (no personnel costs in this)
Labor Cost
- Include taxes, insurance, etc.
You are to add the costs together to find the break-even price for one item. This is the lowest price you can charge to cover your operating expenses. To this number you add to make a profit to grow your line.
Are you manufacturing the product(s) or are you distributing them? If you are distributing them with very little direct involvement other than sales, warehouse and shipping, use a multiplier anywhere from 2 to 2.5 times your Cost. If what you do is more labor intensive your number may increase up to 3.5 times. Remember though that the retailer will also mark the product up somewhere between 2.0-2.5 times. That is not a negotiable formula for most small businesses. The products I am thinking about are not prestige products where name recognition or status plays a part.
As a wholesaler you will direct the course of your business. If you get feedback about price, don't ignore it. As much as retailers may love your product it must be able to "retail" at a price the buying public will accept.
There is a very delicate balance in creating a wholesale price. I've run across numerous formulas each claiming to create a wholesale price. I've learned that there is no magic pill to create a wholesale price but the price you set is very important. If it is too low you may lose money and if it is too high you won't sell your product(s) fast enough.
Every article will tell you that you need to look at:
Cost of Goods- Price paid for the product (actual)
- Shipping cost to get the product to you
Overhead Expense
- Allocate a percentage of operating your business (no personnel costs in this)
Labor Cost
- Include taxes, insurance, etc.
You are to add the costs together to find the break-even price for one item. This is the lowest price you can charge to cover your operating expenses. To this number you add to make a profit to grow your line.
Are you manufacturing the product(s) or are you distributing them? If you are distributing them with very little direct involvement other than sales, warehouse and shipping, use a multiplier anywhere from 2 to 2.5 times your Cost. If what you do is more labor intensive your number may increase up to 3.5 times. Remember though that the retailer will also mark the product up somewhere between 2.0-2.5 times. That is not a negotiable formula for most small businesses. The products I am thinking about are not prestige products where name recognition or status plays a part.
As a wholesaler you will direct the course of your business. If you get feedback about price, don't ignore it. As much as retailers may love your product it must be able to "retail" at a price the buying public will accept.
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