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How to Price Wholesale Inventory

Pricing each product so that customers will buy them can be difficult even if you are experienced at retailing but there are certain criteria that should help.

When a new shipment of inventory arrives, it is like the first day back to school- exciting with some anxiety thrown in for good measure. To make pricing easier for you, this article will discuss how to price wholesale inventory.

Boutique owner Alli Schultz offers a few strategies to help with wholesale pricing. One of these is figuring out how much you need to sell each item and set the price accordingly.


How Is Wholesale Inventory Priced?

What is wholesale inventory?

It is inventory that retailers buy from manufacturers or wholesalers and then sell to make a profit. The recommended retail price (RRP) or manufacturer’s suggested retail price (MSRP) is set by wholesalers who sell their products to retailers at around 50% of the RRP. Retailers then mark up the inventory and sell it in order to make a profit.

wholesale inventory

There are a variety of ways to price your wholesale inventory. Here they are:

Keystone pricing

Keystone pricing is the standard retail practice. It’s achieved by doubling your wholesale cost to get a 100% markup on any given item. So if you buy something for $4 from the manufacturer, you’re going to sell it at $8 if you’re going to adopt keystone pricing.

This way of pricing is beneficial because it provides a nice round number around which to calculate your profit margin. The downside of this method is that the suggested retail price may not be feasible, and doesn’t factor in variables like regional cost differences.

Cost-based pricing

Cost-based pricing is primarily based on individual business costs, not so much on what the competition is charging. It’s a method of calculating price that determines the profit margin you need to cover your fixed and variable costs (e.g., rent, electricity, employees‘ salary, etc.). Keystone pricing is one example of cost-based pricing.

Bundle pricing

Bundle pricing is an appropriate strategy for certain industries. It benefits both sellers and buyers. Bundle pricing favors sellers because it forces customers into purchasing multiple items, while buyers also benefit by getting items at a discounted price.

When you sell your products together in a package, it gives the customer more value and is often perceived as discounted. Click To Tweet

This strategy is common among service providers but can be applied to any market with creativity.

Loss-leading pricing

The Kindle has been a great investment for Amazon. It’s true that the company loses money on every sale, but it makes up those losses by selling more of other products, ebook purchases in this case.

Loss-leading pricing is a method used to beat the competition. Using this strategy, a company offers an item at a low price in order to get people into the store. It only works if you have confidence that your product is better than others and know how much it costs.

Competition pricing

This is a strategy that bases the price of your product on what others are charging. This strategy often works for grocery stores, but can be difficult to follow consistently with every product you sell.

Additional pricing criteria

In pricing your wholesale inventory, you need to take other variables into consideration before deciding on the price for your product, such as cost and what people are willing to pay.

A store in a tourist-heavy area can charge more for certain products because customers are willing to spend the extra money. The type of product matters too: outerwear, for example, is usually marked up more than t-shirts. Name brands also carry higher price tags.

When it comes to pricing, the art of making money is about more than just math. Click To Tweet

You can’t underestimate human nature when considering how people perceive value.


Final Thoughts on Wholesale Inventory Pricing

Pricing wholesale inventory can be difficult, but the right point of sale (POS) software can help. You’ll have access to automatic insights about which products are and aren’t selling in your store so you’ll know how much mark-up is necessary on those items that need it.

Retailers like you can now rely on a variety of strategies to increase sales and use the POS system in order to have an accurate view of inventory. You are then able to analyze your own data, which will help develop pricing that is unique for your store.