Whlsale vs Volume discount

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SimplyE

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Trying to come up with a price for B&Bs. Would you price it as wholesale or as a volume discount? It seems like wholesale would be for resale whereas volume discount would be for B&B or inn.

As far as volume discount...is there a standard-ish?

Thanks!
 

rubato456

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that makes sense to me, you would have to collect tax, if applicable, unless the b & b where going to sell your soap, which i would not think to be the case. i was at a b & b and they had lovely soaps that they just left in the room each day......
 

Tabitha

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I think the cost of the soap would be wrapped into the cost of the room, just as the meals are so technically they are collecting tax as a total package.
 

Lindy

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My understanding is that the company I am selling to must actually be reselling the product for me to be able to avoid charging the PST. Here GST is charged but they can claim it back.

As for discounts - whether it is wholesale or a volume purchaser the percentages remain the same. B&B's are on a tight budget, especially these days so they are going to need smaller bars and affordable pricing.
 

SimplyE

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Lindy said:
As for discounts - whether it is wholesale or a volume purchaser the percentages remain the same. B&B's are on a tight budget, especially these days so they are going to need smaller bars and affordable pricing.
So, what would the "standard" be for a volume discount? I am drawing a blank. I have a lady who wants to order 100 guest soaps for a wedding. I was thinking of a volume discount vs wholesale.
 

gardengoat

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This is going somewhat subjective depending on your profit margin. I consider volume pricing about 25% off my retail.

Now I'll climb up on a soapbox :wink:

We as an industry have a tendency to under charge for our products...me included The average rate for soap is a buck an ounce. If one is keeping this as a hobby that will probably work. However, most talk about building this into a real income, and that means making serious profit. Profit-not a bad thing, it is suppose to pay the bills plus give you a level of comfort.

Wholesale general rule is 50%below retail. At the very minimum your wholesale cost should be 3x the cost. Real cost with at least your overhead built in. So the 3x factor covers your basic cost, then it covers replacement cost-then you are left with one part that hopefully is profit...if you have figured in all your hidden costs. Now you can think that the second time around you've covered your costs with replacemt costs the first time around--so your profit should increase with each order. If it a local account you have aquired. You will probably spend time servicing this account-maybe it is the extra time to physically get there & do a quick inventory & prod them to put an order in to keep your product presense in the store. It cuts into your profit a bit if you get asked to help with store promotions. The store is going to want to use you for delivery if you're close enough....extra time & gas out of your profit right there.

Making a bar of soap somewhere between $0.70 to $1.00 doesn't sound bad if you are collecting $4.00 Even though at worse profit is $2.00 a bar. Going wholesale at $2.00 a bar means you are pretty much doing it for free if you expect to keep doing it.

Even though you can buy in bulk now bringing your product costs down, your overhead increases. You take up more room to store the excess ingredients, you have to have more room to be able to cure your soap, more room to store the finished product you want to have on hand, plus the more you make the longer it takes to package.

We've all be hit with rising product costs & shipping on those items because of the fuel price issue, and as an industry have absorbed those costs.... cutting into our already slim margin of profit.

Ok I'll give it rest for now.
 
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