Food Entrepreneur Forum

Retail Shop Pricing...

Hi Everyone,

I have several retail shops who are interested in selling my beef jerky. They want to know a price.

Here is my initial thought. I have been selling at events for 4.50 (35g bag). I also sell for 4.00 for 2 or more bags as a "special deal".

What do you think about selling to retailers for 3.50? Thats about a 27% margin for them. In Stephen's book he mentions 30% is normal.

1.00 profit for a small item like this, do you think its OK/fair?

Thanks,

-M

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Replies

  • Actually, my book notes retailer profit margins to be in the 40% to 50% range. The higher usually found in very high end, fancy, stores.

    Best wishes for great profits!

    Steve

  • I agree with James -- retailer margins are closer to 40 or 50% -- large grocery rarely drops below 35% and that's bare minimum. What retailers make on our food products is absurd, but they have tons of overhead we don't have.

    I'd also use your first few retailers to test pricing -- see what works. If it's cheaper, do you move more? What about more expensive?

  • Everything I've seen puts retail margins closer to 40% and upping to 50% for super specialty shops. I would love to hear what you end up negotiating though.

    James

  • Everything I've seen puts retail margins closer to 40% and upping to 50% for super specialty shops. I would love to hear what you end up negotiating though.

    James

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