Wholesale Pricing Strategies

In my Getting Started With Wholesale post, I answered some of the questions you might ask when thinking about wholesaling your products. I will now dig a little deeper into pricing strategies, and how you can use them to your advantage.

Typically, the wholesale price of products is set at around 2.5 times the manufacturing cost. The retail price is then usually 2-2.5 times that amount.

E.g.
Manufacturing cost: €30.
Wholesale cost: €75
Suggested retail price: €150-€187.50

The multipliers do vary by industry and product types, but be mindful that your wholesale price needs to cover:

• your time
• employees - even if you don't have any right now, build this in so you have the room to grow.
• materials & tools
• running costs - rent, utilities, office supplies etc.
• profit - after all of the above (and any other costs are taken into account, you need to be turning a profit in order to grow)

Minimum Order Quantities (MOQ)
Many wholesale businesses stipulate a minimum order quantity, this is simply the lowest value that you are willing to accept as a wholesale order. It can be set as a minimum number of units, or a monetary value.

Generally speaking the lower your margins are, the more important an MOQ will be to ensure you are making a profit on wholesale orders. You can be flexible with your MOQ's too, perhaps offering a new retailer a smaller first order to give your brand a try. Some seasonal businesses insist on MOQ's for the initial order, but relax or waive them for top-up orders.

As well as order-wide MOQ's you may also want to set a minimum order quantity per item. This can work really well if you make to order and making individual items is not cost effective. It can also work well for low value items, ensuring you make a profit at wholesale price.

You may also like to sell some products in multiples. For example, if you sell smaller components and they are stored in boxes of 12, you could only sell them on in multiples of 12.

You know your business, and you are in control. Just make sure the pricing strategies are clear to your customers so it doesn't confuse them out of purchasing from you!

Manifest caters for all of the above pricing strategies and more, so our B2B e-commerce system is a great way to set up a pricing structure that can also be tailored to each customer if required.