How to Calculate the pricing of your Product when buying discount/wholesale?

[MichaelAnzalone]

Hey everyone my name is Michael im new to this forum thought of it when coming across a question probably my best bet so anything can help. my question is when your buying your product bulk/wholesale how do i calculate from a bulk buy to price (Each Item Separately). the bulk (quantity), the total (cost/tax included) THEN WHAT?

Hope it makes scenes pretty basic question im sure for everyone at some point. THANKS anything will help

[Fulcrum]

I don't know how taxes are handled in your area, but for me (Ontario, Canada) I can basically ignore them when it comes to pricing. I pay sales tax on what I buy but I get to claim it back when I file taxes.

As for markup on pricing, I generally try for a 30-50% average when I can. If the market prices are higher I can push for a better return, if the market prices are lower, than I need to find a new supplier or try to reduce costs somewhere else.

As for figuring out an individual item's price from the bulk price, take the gross cost (before taxes but including shipping, brokerage, and duty fees) and divide by the number of items in the lot.

[huggytree]

on small items (under $1) I typically do a 300% markup

$1-10 = 100% Markup
$10-$25ish =50% markup

$25 and up =35% markup

each industry would be different though

[MichaelAnzalone]

i see what you mean and that helps thanks

[Freelancier]

For retail clothing, it tends to be 100% markup at each step... an item that costs $8 to manufacture is sold to the retailer for $16 who then tries to sell to the customer at $32. But then there are discounts that are offered and close-outs and so on.

But if you're trying to calculate, take whatever you paid for the bulk, divide by the number of pieces and that's your cost. Markup as best your market will bear, knowing that the longer you hold onto your inventory, the less it's worth, so discount over time to move inventory that's getting stale.

[billbenson]

For retail clothing, it tends to be 100% markup at each step... an item that costs $8 to manufacture is sold to the retailer for $16 who then tries to sell to the customer at $32. But then there are discounts that are offered and close-outs and so on.

But if you're trying to calculate, take whatever you paid for the bulk, divide by the number of pieces and that's your cost. Markup as best your market will bear, knowing that the longer you hold onto your inventory, the less it's worth, so discount over time to move inventory that's getting stale.

Good advice and accurate to the best of my knowledge for retail.

B2B is a different ball game. I sell expensive construction stuff. I mark up between 30% and 35%. You will find that there is less price shopping by customers as well in B2B.

[MichaelAnzalone]

Hey its Michael Anzalone again sorry my last account got lost this is my new one let me ask you i have a order right here so maybe just to be safe you can walk me threw the calculation here it is
288 pieces
$69.99 Total
$80.98 Total (shipping included)
there was no tax that they asked
so now how do i price each product (candles) if needed to know

[nealrm]

The amount that you pay for a product should not be used to determine a price. You should set the price at what the public is willing to pay, not a preset markup. If the public is willing to pay $5 per candle, then the price is $5. If they are only willing to pay $0.25 then the price in $0.25. Your cost and profit margin only determine if you are willing work to offer the product to the market at that level of compensation.

[samie]

The amount that you pay for a product should not be used to determine a price. You should set the price at what the public is willing to pay, not a preset markup. If the public is willing to pay $5 per candle, then the price is $5. If they are only willing to pay $0.25 then the price in $0.25. Your cost and profit margin only determine if you are willing work to offer the product to the market at that level of compensation.

I'd say it shouldn't determine the price either, but depending on the expenses involved it may be necessary, or not worth your while. People will pay outrageous prices for things that are very convenient and don't have other competition.

But I guess if you're just looking for the math you're basically paying .28 cents per candle (based on $80.98 as your grand total including shipping; $80.98 divided by 288).

I don't know too much about candles, but I'm sure the pricing can depend on the type and quality of the candle you are selling. It's hard to provide any of these details without your details. Checking on Ebay a lot of the candles seem to vary between $5 and $35. When choosing pricing you would most likely also want to factor in location of where you are selling the item. But it is all about what you think other people will pay for it too.

I would probably have to say between $2.50 and $8 in guessing on the quality. Those are pretty decent margins.

And if you ever need to factor any other expenses into your prices, then it shouldn't be too bad. Like say you sell all 288 candles at $2.50 each for a gross of $720, but then you have to pay your credit card processor 5% of all transactions, so $720 times .95 (basically minuses 5 percent) is $684 after your credit card processor, then minus $80.98 makes your total net of $603.

Or say if you need to factor taxes into your products you can as easy as just $2.50 times 1.15 ($2.87) or whatever the taxes are for where you are located.

I hope this helps, sorry if I didn't understand the question properly.

[MichaelAnzalone]

Those are great answers Excellent. THANKS YOU GUYS