What is a common percentage to be made on an item being sold from a manufacturer to a distributor? The product is an indestructable, floating, watertight foam filled case. Need pricing help! Thank you!
2006-07-15 16:54:26 · 3 answers · asked by ♥ Erin ♥ 2 in Business & Finance ➔ Small Business
You might want to work backwards. How much do you think the public is willing to spend on the item. Then figure out how much profit a store will want to make, and charge them accordingly.
If the public's willing to spend $19.95 on it, and a store needs to make 5 dollars on it to break even (shipping, and business expenses) then sell it to them for $11 or so.
Those numbers are different for each industry. Sectors like computers have very little margin at the store end. (When I ran a computer store, things like cables were sold at cost + shipping with no profit at all) The manufacturer still marked them up several thousand precent before selling them to the distributor, who added a few hundred percent. (Do you really think SVHS cables are worth $2/foot? If they're produced for more than $0.02/ft I'd be surprized)
2006-07-15 17:13:50 · answer #1 · answered by cmriley1 4 · 0⤊ 0⤋
it depends on the volume of business, demand & supply.
if it is specially designed or patented product or an innovative product, you can have a profit margin upto 500 %
Some Chinese distributors work on profit margins of 1 %, but they are selling 10 containers per month. and still they can buy week-end homes & BMWs
2006-07-16 00:01:42 · answer #2 · answered by luckychina 2 · 0⤊ 0⤋
that's a tuff one.
i'd say try contacting the small biz administration, or a college professer who teaches economics, or maybe a marketing firm?
i wish i could be of more help but this question has been racking my brain for the last 20 minutes. sorry.
2006-07-16 00:04:18 · answer #3 · answered by harmony 4 · 0⤊ 0⤋