AboutJames E. Dion Expertise Most questions about trends in specialty retail, how customers are changing both in the US and Europe. Demographics for all countries as they relate to retail trends and issues. Store Operations, Buying and Merchandising.
Experience
Past/Present clients Microsoft, Harley-Davidson, Ritz-Carlton, Hummer, Ace Hardware, Coleman Spas, Aldo, Intel, Dell, Safeway, New Balance, IBM, Kodak, Bata International, Nortel Networks, Honey Baked Ham Co., Man Alive, Highsmith
B.S Chicago State University
M.S. Chicago State University
PhD (abd) Illinois Institute of Technology
Expert: James E. Dion Date: 7/15/2008 Subject: Wholesale/Retail
Question I need to know what the proper percentage for wholesale mark up is. I am selling a plastic phone clip as a manufacturer and want to sell to distributors. I was also wondering what amount of product you would recommend as far as a set amount that a prospect for distributing should have to buy in order to be called a distributor.
I hope this makes sense to you. Also any info you have in this area would be really helpful and greatly appreciated!
Answer Katie,
Although wholesale margins can vary from company to company, you likely need to have at least a 30% margin on wholesale, so if it costs you $7.00 to produce it, all costs in, you would wholesale it for $10 (your cost divided by 70%). Distributors ordinarily need to purchase a significant amount to become a distributor, in your case, likely at least a few thousand as it does not sound like a high priced item. You should be more concerned with how quickly the distributor is able to sell the product to retailers, that is the key to quantity. They should be able to turn their inventory at least six times per year if not more.
