How to set wholesale price to independent gift shops?
November 9, 2019 10:41 PM   Subscribe

I want to sell items to independent gift shops, not a Spencers or Hallmark store. Looking for guidance on how to set wholesale price based on what I think the retail price would be.

What is the usual markup for items?
For example, one thing would be a holiday card, which I think can retail for $12. Could I get $6 for it? Is it usual for there to be a price break at 10 units?
Another item would be an art gizmo, which could sell for $30. Would wholesale also be 50% of retail, or could it be 66% ?
posted by Sophont to Shopping (3 answers total) 2 users marked this as a favorite
Yes, for me my wholesale prices are typically 50% off the retail price before tax. However, that means stores need to purchase a minimum amount to qualify for wholesale discounts.
So, for example, a store will need to order min 150€ of merchandise for every order to get the discount. I also sell wholesale products only in packs of 10 (or 5 for the most expensive items).

It depends a little bit on your type of products though. In fashion it's more common for stores to apply an even higher markup, usually 2,5. It's very variable per industry.

I don't think you'll convince any store to give you 66% of the retail price, unless perhaps in a consignment type of arrangement. So you need to make sure your profit margin is sufficient if you sell at wholesale discount. Otherwise the retail price needs to go up ( but the perceived value of your product also needs to be in line with that higher price...)

I hope this helps.
posted by PardonMyFrench at 4:59 AM on November 10, 2019 [3 favorites]

I've mostly been an independent retailer for about 35 years.

There are more factors that go into whether I'll carry something than price. One of the main ones is returns. I'll pay more for an item I can return than one I cannot. Since it seems like you're selling non-perishables, I assume returns are accepted. If not, you might want to consider that before you get to pricing.

Some other factors: how and when you ship (the carrier affects the price); how customs are dealt with when crossing a border; whether you offer display helpers (special shelving) or marketing materials, etc etc.
posted by dobbs at 5:57 AM on November 10, 2019 [3 favorites]

Yes, it is normal to have minimum quantity and variety requirements and a higher wholesale price for those who don't meet them.

A merchant may also care about exclusivity (from other local merchants and/or from your own online sales).

Great comment from dobbs on the impact of return policy and merchandising aid.

PardonMyFrench is correct to note that a 50% markdown from MSRP is the best you can usually hope for, and that you can a higher percentage of MSRP on consignment -- but I'd say that I'd be extremely wary of consignment arrangements with independent merchants. They are going to struggle to honor the sale and inventory reporting/audit and shrinkage risk-sharing that a sensible consignment arrangement requires.
posted by MattD at 8:10 AM on November 10, 2019 [1 favorite]

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