Posted by 2014-02-09 18:20:34
Title: How do I determine how much to charge for my products- wholesale and retail?...
Thanks for your question. Determining how much to charge for your product depends on your industry, but here are a few guidelines:
1. Benchmark your product relative to its closest competitors - compare key features/benefits and subjectively or based on your discussions with targeted users on your overall value.
2. Based on your value proposition or differentiators and what you - and more importantly - your targeted users believe is the true value. Compare your retail price points vs. the competitors (giving yourself positive or negative points within the retail pricing depending on your positioning).
3. Based on your direct and indirect competitors, their retail price points and any adjusted (based on the value equation listed above) price points create a power price chart....basically a vertical scale of prices with each of the products listed along the vertical axis to gain perspective on where you sit relative to the various other players in the market.
4. Wholesale is a bit more complex as it depends on the classification - consumer, enterprise or speciality and the product category ex. carry case vs. portable speaker. Each distributor or wholesaler will have different metrics and targets they use depending on each of these elements. Best to approach a few targeted wholesalers with a non-disclosure in place and discuss distributor margin bands. Key is to also understand what's included in these margin flows or bands - tech/warranty support, rights of returns, marketing development funds, etc...
5. Map this against the same power price chart listed above = focus on wholesale vs. retail.
Hope these guidelines are helpful.
All the best,