I am a new business and I am in the process of producing 1000 pieces of a home decoration product that will subsequently be sold to retailers, distributors and corporate clients. I am having trouble figuring out my pricing structure. My production cost is 40.
How should I determine my wholesale price? My distribution price? What if it is a small or big order?
According to everything I have read, this is more or less what it should look like but I can't seem to square the circle.
Let's assume my suggested retail price is 100 (40*2.5)>my wholesale is 50 (100/2). In addition, if it is a large distributor order, then I've read that I should take off an additional 25%, which would make it 37.5, i.e. 2.5 less than my cost price. This means I would be losing money.
Can anyone provide any guidance.