Pricing is one of the critical moments in a business's prosperity. Typically, the market decides what the price of the product or service will be. Also, the costs of production are taken into account. When establishing the wholesale price, the entrepreneur makes a discount to the buyer at the expense of his own profit per unit of goods, but wins because of the large amount of it.
Instructions
Step 1
To determine the wholesale price, it is necessary to establish the cost of one unit of production. To do this, calculate the variable and fixed costs. The first includes raw materials, wages of employees of the enterprise, energy, fuel. Their size varies depending on the quantity of goods produced. Fixed costs are rent for premises, management costs, sales costs, and depreciation of equipment.
To determine the optimal retail price, you need to know how much you can sell and produce. Knowing the variable and fixed costs, as well as the volume of production, determine the cost.
Step 2
Taking into account the calculations made, decide for yourself how much will be enough so that you can invest additional funds in the development of the enterprise, and the minimum amount of profit that you would like to receive. Calculate a sufficient price by dividing the costs and benefits by the quantity of products produced.
Step 3
The minimum sufficient price can be wholesale. Alternatively, you can donate a small percentage of your own profits (per unit) to a wholesale buyer for a discount. On the contrary, you can make a small mark-up to the minimum price for retail customers.
Step 4
Compare the prices received for your products with those of your competitors. If your product is of lower quality, then it is better to make it a little cheaper, otherwise - vice versa.
