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Wholesale pricing, what is your formula?


#1
There is an old adage that there are three things a wholesale
client can ask for - low price, quick turn-around and high
quality. They can pick two, I set the third.

Boy David, that is something I should frame and hang on my wall!

Wholesale prices, like all pricing I suppose, has to be flexible and
is not the same all across the board. Routine sizing’s need to be
competitive while complex custom work that thrills the customer can
have higher margins because of it’s perceived value. If you’re
wholesaling a line of your work, you can charge more if it sells
quickly for people than you can if just sits in their cases.

Here is one way to price your work. You need to calculate and total
your operating expenses and the “wage” you need to pay yourself for
12 months. You need to include everything, rent, phone, insurance,
electric…everything. Divide that by 2000 and that is your labor
and overhead cost per hour. Then with each piece or job you
calculate the time spent and multiply that by your labor/overhead
"per hour" number. You add that to your material cost of piece/job
you’ve done and you have your “total cost”. Note that you have
included your “wage” in your cost. This number needs to be marked
up, usually about 1.3 to 1.7 times for wholesale. The wholesale
price covers your costs and wage and also provides you with some
operating capital for yourbusiness.

Some work just can’t justify that mark-up, but at least you will
always be able to figure out your “cost” and know on what work
you’re losing money. You’re then better able to guide your business
toward the more profitable work with the higher margins.

Hope that helps someone,
Mark