Wholesale Price List Template
Wholesale price is the price that retail business body pays for a product and then sell them to end user with the addition of their profit margin. The wholesale price lists are dependent on the market conditions and product availability. For items that are scarce but have a high market demand will have a high wholesale price while for items that have a low market demand and high supply usually have a low price. Wholesale prices are usually determined by companies in order to sell out their products. A wholesale price of products includes the manufacturing cost, factory overhead cost, promotional and advertising cost and the profit margin of a company. When retailer purchases these items they then add-on their own profit and sell them to the end user or consumer.
For getting effective profit, it is important for the manufacturing company to calculate the wholesale price carefully by keeping a close eye over all factors that have a direct or indirect impact on it. Factors that have a direct impact over wholesale price are fixed and variable manufacturing cost, profit margin, factory overhead and marketing cost, indirect factors include market competition, demand, inflation or economic condition of a state and political stability. If one neglects any of these factors it will affect your profit margin.
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How to calculate wholesale price list?
- First of all calculate the manufacturing cost of the product. The manufacturing cost will include the cost of raw material, transportation fee of the raw material, machining, surcharge and taxes. Also calculate the charges of doing business like office equipment, warehouse fee, factory overhead (electricity, fuel), insurance and license.
- Also include other expanses that were made during the manufacturing of a product like labor. The labor cost is basically not a part of the production cost but you have to include it in a wholesale price. Include hourly pay, insurance and labor taxes in your wholesale price to get additional benefits.
- It is important to determine the break-even point that you can get by adding production cost and labor cost.
- Calculate an ideal profit margin instead of doubling your break-even point as practiced by lots of business men. This will give you a 100% profit margin that is not possible and is harmful for your business. For example, if the break-even point is $4, so the 100% profit margin will be $8. If your competitor is charging $5 or $5.50 a wholesale price, you will lose your profit as no one will purchase from you. Therefore it is important to check your competitors before fixing a price for wholesale.
- Try to keep your price a bit lower than your competitors for generating high revenues. For example, if your cost is $4 and the market price is $5.50, then you should opt for $5.25 in order to attract retailers.
Wholesale price list is very important especially for retailers because on the basis of these price lists they can decide their own profit margin and the wholesaler from where they have to purchase items.
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