Have you downloaded my FREE Wholesale Essentials Pricing Guide yet? If not, stop what you're doing and download ASAP - it's going to take the guesswork right out of the basics of pricing your products for both wholesale and direct to consumer (download here).
So you've run through the exercises in the guide and you've come away with your costs, wholesale costs, and recommended retail.
What should you do if you've followed my advice, set yourself up to actually make a healthy profit, but the retail price ends up being higher than you're comfortable with? I don't recommend you drop your prices much lower. Operating on a slim margin only leads to slow growth and resentment in your business.
Here are some ideas you can think about instead:
- Is there any way to negotiate with your manufacturer or get better pricing on your materials? Sometimes you assume the answer is no before even asking the question. Explain the situation clearly, and ask how your prices could decrease as you purchase bigger quantities. This helps you to plan more efficiently for the future.
- Is there a way to increase the products perceived value without having to drastically increase the retail price?
- Is there packaging that can be added that may not cost you much, but would really increase the value?
- Does your messaging on the products (hang tags, packaging, ect) explain clearly your unique selling point and why the item is priced the way it is?
When all else fails, and you don't think you can keep the item at the price it needs to be:
- Are there alternative products in the assortment where the price can be increased to make up for the slim margin on another? When you completed the exercises in the guide there may have been a few items that left you with padding room. Do you sell enough of them to make up for other items in the assortment?
- You may not be able to wholesale the item. If you can't figure in a healthy margin for both you and your stockists, you only be able to sell this item direct to consumers.
Looking for more guidance on pricing and all other things wholesale? Looking for more support as you prep for your next trade show? I’d love to help! Feel free to connect with me here.