Need advice on product pricing and retail markup.

JonathanAnon

Hi there, I have a product that I think will be a great seller, but I'm not sure what price to pitch it at. I have looked at other similar products in the supermarket, so I have an idea as to what the retail price should be, but I dont know what price I need to pitch it to the supermarket up and what markup they would expect..

Are there any guidelines for this?

bowloforanges

Hi there,

As far as I know, you have to take into consideration the type of product, its demand and how similarly competitors mark up their products and the actual level of competitvity. The most important thing to keep in mind is that the pricing chosen should reflect the positioning of the product. For instance, if it is an imiatoion (me-too) product, eg. Coca Cola vs. Generic brand coca cola then the pricing should be cheaper. If the product is of greater quality or tries to translate that idea through its packaging and branding position then the price should be a little higher. For example, TescoFinest clearly has a superior positioning to TescoValue.

Here is a quick link to basic pricing startgies, you might find one that appeals to you and you could research a particular one further as it might give specific mark up % and so on. I hope this was of some use to you, wish I could be more of assistance.

On another note, could you offer any insight on how you are thinking of contacting supermarkets and arranging meetings? I want to try see if I can get a book stocked in a nationwide supermarket franchise but am unsure of how to approach the matter.

westgolf

Hi,

@jonathan -You dont say what type of product you have in mind but you should reference it to the competition in terms of what the previous poster said, You need to be able to tell a buyer the cost of purchase,suggested mark-up, discounts available and your pricing policy. If you want a premium setting then you will need to say that to the buyer and explain your strategy.

@bowloforanges - you need to consider if the book is suitable for a nationwide placement. For instance a book about cork stout for instance will probably do ok in the southern region but will tank in donegal. If your book is still a good prospect then approach the central buying sections of your chosen targets.Bear in mind that there are hundreds of new products landing into these offices every month so you need a USP - Unique sales proposition. this could be a celebrity author, a current craze etc. you need to make your product stand out from the rest.

hope this helps

westgolf

Tangled

JonathanAnon wrote: »

I have looked at other similar products in the supermarket, so I have an idea as to what the retail price should be

Find out what those producers are selling in to the stores at - are there any wholesalers who can give you an idea of wholesale prices, any friends in retail businesses who can get their hands on wholesale prices etc? Take into account that supermarkets will want discounts based on volume too.

bowloforanges

@JohnatonAnon

Check out this link it contains a list of different types of pricing strategies, I don't know if it's of much use but it does give general guidelines on ways to using pricing structures > http://marketingteacher.com/lesson-store/lesson-pricing.html

@westgolf

Thanks very much. It is suitable for nationwide and parents are the target market so it can appeal. It doesn't have a competitor, publication wise, but would be against online resources. I will look into what you have said further, thanks again.