Pricing for your specific industry

MattC

Hi Everyone -
 
First off, been a lurker for some time and have gotten some really good advice
 
My question relates to determining a price for my product and trying to balance making enough on my direct-to-consumer sales via my website and my wholesale b2b sales to retail stores.
 
I am selling a nutritional supplement to a niche group of athletes so I am hoping to utilize premium pricing and a healthy margin on my DTC sales.  I am unsure what the typical margins are for dietary supplements and I don`t really know the best way to figure this out so I know what I can charge for wholesale and how that relates to my actual product costs.

MNGrillGuy

I would look at your competitors price points for starters.  You probably don`t want to be significantly above them unless you truly offer a unique solution.  Then work it backwards to give each his fair cut of the pie including distributors and retailers.
MNGrillGuy1/10/2008 12:14 PM

robertj

I would recommend starting with the "market price" - that is the price the end customer will pay for your product and not base it on your cost to produce. There are several ways to "decide" on the market price - one of those being the prices being charged by the competition.

MattC

Thanks for the feedback. I do intend to go a little above my competitors for a few reasons.  One being that my closest competitors dont have all the ingredients, hence mine is a superior product.  Plus I think there is somethign to be said for the branding impact when you charge a premium price.. 
 
I have a general idea for my MSRP and I know my costs.  I guess I`m wondering about the wholesale price since it seems to vary widely depending on industry...  from 4% supermarket margins to 100%...
 
 

LiveWise

You need to set yourself a part because there are soooo many nutritional supplements out there.  You may know the difference, but the majority of people don`t understand the difference between Costco vitamins and Advocare supplements.  The dollar difference is huge and many people don`t want to pay the difference.  Your key will be education of your product and possibly to get gyms to promote your items.  (Gold`s gym promotes Apex supplements.  I believe that Apex sells 10 times more having Gold`s fitness trainers talk about the advantages and benefits over the vitamins on the counters that cost $10 for a huge bottle)