Photo Framing | Pricing
PRICING
Price is based upon three factors. The first is perceived value or what the market will bear. The second is the manufacturing cost. The last is the desired profit structure of the company balanced against what the resellers need.
The final price is usually five times the final production cost including boxing and landing charges in the U.S. There is some room since most of today's retailers work on margins of 30 to 40% for smaller and 50% for larger quantities. Catalogers usually work on 50%. Sales rep's commissions range from 10% in the consumer electronic field to 15 to 20% for the gift industry. A stocking distributor usually buys the product for 50% and an additional 10% off the retail. A master distributor's discount is negotiable but could be an extra 10 to 20% off the retail.
Each level of discount requires a larger initial and continued commitment from that particular buyer. The company feels that $79.95 for the wall unit and $49.95 for...
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