Hi, I am interested in importing a product line into Australia. It is a niche market with low competition. I have ordered samples from the manufacturer and plan to take these around to the specific shops to ascertain their interest in purchasing the range. (Have spoken to a retailer already who is interested. I don’t know quite how to price the item. I believe it will sell for a certain price but don’t know what to charge. Should I ask for 50% of RRP? Do I ask what they believe it will sell for and ask for 50% of this price? I believe the product will sell for 10 times the cost of manufacture, so am confident of at least making 100% on outlay. Can you please advise?

– Thank you Belinda

Tessa Says 

We are really honoured that you told us your business ideas and would love to help however we can. Neither of us have been involved with selling that particular product online, however, 40-60% off RRP has always been the percentages we work with for our wholesale clients. Since most manufacturers require buyers to purchase larger quantities we differentiate ourselves by offering low minimum order quantities, but at a higher wholesale price. We have created 3 wholesale price points for our clients, depending on the size of their order. Sometimes paying a higher wholesale price but only having to stock a small selection for testing suits a retailer better initially and once the item has proven itself, for their store, they will scale up to bigger orders and of course get a better wholesale price.  The most important thing is that you calculate all your costing per item, including the outside business costs such as packaging, shipping, internet and duties/taxes (to name just a few) and make sure that your wholesale prices are still viable.

Nathan Says 

Agreed. Every product/industry has different standards that retailers will expect too. If a product is generally a lower converting object (Ferrari), then the retailers will want a higher margin, but if it’s higher converting (Toyota) then they won’t need as much (but will always try for it!). Because we like to keep as much “fat” in our margins as possible, we try to offer something that they can’t get elsewhere (like lower quantities as Tess has already mentioned). It sounds like you have a good handle on things though, as you’re still getting a decent return on your investment, while offering the retailer a good margin as well. The more lucrative it is for them, the more likely they’ll buy from you. Stick to your guns, go in confidently  and protect your margins.

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