A key consideration is pricing the product onto the market. Usually overlooked is the margin allocations and why such calculations occur. Commonly asked is should a percentage or a fixed price point be adopted. Read more below to find out.

These are general rules for guidelines. There are 2 approaches one is percentage based and the other fixed value. Fixed values are usually used for price-sensitive items. A great approach is to determine how many layers you require, think of it as how many hands does your product need to be passed on before it reaches the customer.

In fact pricing of the product is one of the most important decisions to be made prior to launching the product.

Brand owners have a very peculiar position as they determine the initial selling price, generally taking a margin similar to wholesalers will ensure you remain competitive. If marketing tasks are undertaken by the brand owner a 30 – 55% margins are not unheard off. Take into consideration the ease of the product to be duplicated, novel unique active ingredients will be able to yield much higher margins of return.

Brand Owners 15% – 55%

Trading margins range between 1 – 15% depending on the product, at Furley Bioextracts most of the products we manufacture are on the medium to high side in terms of pricing making them more premium products, we are looking around 15% kind of margins.

Wholesale Margins (15%)

Retailer margins depend on how well we can negotiate with the retailer, new brand owners will usually be looking at 35 – 55% margins given to the retailer. Strategies to reduce such margins are an aggressive marketing plan where the retailer does not stock your product, customers are lead to disappointment in such circumstances margins to retailer can reduce to 15-35%.

Retail margins (35 – 45%)

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