I am trying to find a rule of thumb for pricing products for wholesale and retail.
Let's say cost of sales is R50.
Would it be sensible to sell wholesale at R 150 and retail at R300 given the following:
Basic selling price = Cost of sales x 3
Cost of sales = 33%
We also need to pay a rep 10% which puts us up 43% before profit.
We then also want to incentivise the staff by giving them 10% to split amongst them.
We are now at 53% of wholesale price going to our bottom line cost of sales leaving us with 47% profit.
Ok, so this is all just a theory and it may not be viable. I need your input into what you think the percentages should be. We are now in the process of creating product ranges that will be sold to shops and we will stay out of that retail space. I am able to calculate my cost of sales in terms of manufacture extremely accurately. But I now have to be sure that my other numbers make sense.
We have an entire retail range of products that are not in the wholesale market so we have a range that is very profitable already. We simply have lots of spare capacity which includes machines, skilled technical and artistic staff and we see many opportunities that can be realized very easily with a couple of reps walking the beat..