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A rough guide to wholesaleWhen working out what the wholesale price should be ... my advice is to start from the RRP (recommended retail price) of the candle. You should have already worked out your base costs if you are even considering wholesale, so you already know how much it costs you to make each candle.
You are going to make LESS profit on an individual item when it comes to wholesale sales - this is the whole point of wholesale. You sell to somebody in large quantities. In return you give them a lower price.
The BEST wholesale formula to use as a baseline is
RETAIL PRICE DIVIDED BY 2.35 = WHOLESALE PRICE
I had been starting at the wrong end. I'd been starting from my cost rather than the retail cost, which is why my figures were coming up so low!! As an example, let's take a candle that costs me about 1.60 to make. Now my own retail value of this particular candle is 6.99, but in a shop it would sell for 8.99.
8.99 / 2.35 = 3.82
Why 2.35? It's not just a number I picked out of the air!!
Let's break it down.
The retailer has paid 3.82 for the item. It you multiply that by two, it gives him 7.64. The extra is his profit. The .35 comes into play to cover his additional costs such as heating, lighting and staff wages.
Let's go back to my cost of 1.60. If I had used the first formula I was ever given of cost X 2 for wholesale, I would have doubled that for the wholesale price and made myself the ripe old sum of 1.60 for my efforts. With the 2.35 formula I have made 2.22 which is a much better amount! You also want to remember that the retailer will be buying in bulk to get this price. If you don't charge enough for your candles at wholesale then you are spending days working your butt off with little in return.
This is just a base line guide - work out your own formulas if you prefer, but this is what I use and then make adjustments on the final price according to my time involved in making that particular candle.
Minimum orders
Should you set a minimum order value? OH YES!!! I strongly advise setting a minimum for wholesale customers. There will always be *one* who decides to order one votive candle and expects a wholesale price if you advertise no minimums!!
You also want to think about whether to have minimums for each range - for example I will only wholesale votives in batches of 12 all the same scent, or 3 of each pillar at a time. This is to prevent people ordering one lavender, one pineapple, one rose etc.
What should the minimum order value be?
It is entirely up to you!!! You have to think about what the lowest is that you are willing to get out of bed for when you are selling at trade prices. Bear in mind that currency conversion fluctuates, but a good starting line is around £100 UK or $200 USD and adjust that according to what you feel comfortable with!
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