My company has generated serious interest from some major natural food chains and I'm in the thick of trying to determine wholesale and distributor pricing. Thus far we haven't used any distributors for our products, but the time has come to go that route as we're being asked by retailers to work with specific distributors in order to carry our products (specialty dry baking mixes). We had previously set our wholesale pricing at roughly 75% of retail (or retail minus 25%). Frankly, that was really just a shot in the dark, and rather than continue to guess, we want to be sure our pricing is competitive (and attractive) to both distributors and retailers, without selling ourselves short in the process. Here's an example of pricing we've come up with on one product:
Retail Price: $5.99
Wholesale Price: $4.49 (retail minus 25%)
Distributor Price: $3.59 (wholesale minus 20%)
Based on this, our margin is about 17% of retail.
I would love to get some feedback and/or examples of how other companies price their products for distribution and retail, and if our figures are in line (or out of line) from what retailers and distributors expect. Any help would be greatly appreciated. Thanks in advance!