Welcome to Wholesale Forum.com
Wholesale Forum is the fastest growing online business community dedicated to retailers, auction sellers, surplus and overstock buyers needing a quick and safe solution for sourcing trade stock. Join our free and friendly forums today and gain knowledge, offer your advice, and discover new partnership opportunities:
For wholesalers, dropshippers, manufacturers, distributors and trade services providers. Advertise your business today on WholesaleForum.com for free to reach potential trade buyers on a more personal level. Promote your latest offers, interact with buyers in real time, distinguish yourself as an expert in your field, and attract sales instantly.
Thread: How to price products for resale
09 Nov 2010 05:45 AM #1
- Join Date
- Oct 2010
- United States
- 17 Times in 16 Posts
How to price products for resale
Setting a price for resale, an important part of marketing, can be quite a tough task. If your prices are too high, you might not get many buyers. If you set your prices too low, buyers are going to question the quality of your product and you still might not get sales. So, you need to ensure that the prices you set for resale are correct. In doing so, buyers will know that you are charging a fair price and will be ready to purchase them. Here’s a guide on how you can price your products for resale.
Factors Influencing How to Price Your Products for Resale
There are several factors that influence your putting a price on a product for resale, which are:
● Cost of products
● System of distribution
● Your desired return on investment
Besides these, you need to cover the basic, direct, and fixed costs, as well as income and profit.
● Fixed costs: Overhead is a fixed cost that has to be taken into account. For instance, you need to pay the telephone bill regardless of how much sales are made. If sales increase, overhead costs may increase too. It is recommended that you do bookkeeping to keep track of these costs. The other fixed costs are marketing expenditures, professional fees, bank charges, and transportation and business permits.
● Direct costs: This is associated with the sale and delivery of a particular product. When reselling a product, you need to consider the original price of the product and the cost of shipping it to you, repackaging, and labeling for resale.
● Income and profit: Most people confuse these two terms. Income is the amount that you trade your time for. Profit is the return on an investment and the incentive for the numerous risks that businesspeople take to start and operate their businesses.
Pricing New Items for Resale
There are several approaches that you can take for setting a price on a new product for resale.
● Cost-plus approach: You simply need to multiply the cost of your product by a markup factor. For instance, if a product is $25, and the markup factor that you have applied is 100%, then the retail price would be $50.
● Commonsense approach: You need to consider the sales value of a product when setting a price. For instance, if you purchase a lighter for $1 and sell it for $3, your markup is 300%. However, for something that is larger, like real estate or a car, you might only earn a meager percent on its resale. In other words, you need to apply your commonsense when pricing products for resale.
● Research approach: If you are a small buy-and-sell operator, the best way to price a product is by carrying out research in the marketplace. Learn about what the same products are being sold for, marketing techniques for their sale, and the target audience. Some of the techniques you can incorporate are:
1. Go online to marketplaces like eBay to research on prices.
2. Search through ads in newspapers, fliers, and magazines for prices.
3. Subscribe to product catalogs for cost information.
4. Consult with other retailers to find out how much they are charging.
5. Go mystery shopping to retail stores, and make comparisons in prices.
6. Ask suppliers.
Pricing Used Items for Resale
Setting a price for an item that has been previously owned for resale can be easy if you follow the research approach, as was done for pricing new products. You can make mystery-shopping comparisons and online searches, read classified advertisements, and more to determine the market value of a particular product. Besides these, you can also:
● Purchase price guides: To set a price for expensive products, like boats, cars and recreational vehicles, you can purchase price guides. These guides give a description of the product, state the condition of the item, and give a value based on the above criteria.
● Have professional appraisals: Having professional appraisals performed on products of a high value helps to substantiate the price that you want to set. As this method is quite expensive, you will need to include this in your selling cost.
● Create a sliding-condition scale: In perfect conditions, products are set to a price that is 70% of the new cost. Those items that are still saleable but have passed their days of glory are priced at 30% of their new price. However, there are some items that retain their value better as compared to others.
Pricing Antiques and Collectible Items for Resale
Setting a price on antiques and collectible products is quite different from new or used items. This is because these items are rare and the target audience is very narrow. Guides on price, value, and condition of various antiques and collectibles are available for you. Purchasing these guides are a good starting point for pricing the items. In order to make a sale, you need to select the correct sales venues and target audience. Traders need to pay attention to the happenings of the marketplace at all times. You can also get professional appraisals and authentication, which add value to the antique item.How a New Online Retailer Made Over 3 million Sales in 1yr With These Sources
Got something to say? Sign up now and join the discussions.
Tags for this Thread
By Otter65 in forum Import & Export DiscussionReplies: 0Last Post: 17 Sep 2010, 02:45 AM
By jdcsac1408 in forum Mobile Phones & SmartphonesReplies: 2Last Post: 15 Mar 2012, 01:16 PM
By wvstunguns in forum Wholesale DiscussionReplies: 1Last Post: 11 Aug 2011, 05:04 AM
By Harry_shipper in forum Wholesale DiscussionReplies: 16Last Post: 04 Sep 2010, 05:58 AM
By SunOhio in forum Safe Trading Advice & Due Diligence DiscussionReplies: 17Last Post: 14 Dec 2011, 03:40 AM
By originalpetz in forum Shipping & Shipping Documents DiscussionReplies: 1Last Post: 25 Jul 2011, 07:22 AM
By Bestshipper in forum Safe Trading Advice & Due Diligence DiscussionReplies: 16Last Post: 14 Sep 2010, 06:51 AM
By Sydboy75 in forum Accounting & Tax DiscussionReplies: 4Last Post: 22 Feb 2011, 05:56 AM
By HazelR in forum eBay, Amazon & Online Marketplaces DiscussionReplies: 3Last Post: 19 Aug 2010, 06:15 AM
By Christy1578 in forum Products & Trends DiscussionReplies: 23Last Post: 23 Aug 2010, 05:24 AM