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Wholesale Pricing

post #1 of 4
Thread Starter 

After an exhaustive amount of research on how to properly determine wholesale pricing, my head is still spinning. 

The most common formula I've noticed is to take the price of INGREDIENTS ONLY and triple. That just doesn't make sense to me...ingredients run about 23% while LABOR is my huge cost. 

We are an independent, rather small scratch bakery ($750k annual gross volume) and do not use any bigass automated machinery (nor have room for it), so that's why labor's high.

How best to price for wholesale other than the general "figure out good retail prices and work backwards from there" which is how we've been doing?

post #2 of 4
What labor cost do you run?
post #3 of 4
The best I have been able to come up with for wholesale is to take our retail prices and reduce them by 1/4. We try our best to make sure we at least double our prices for true retail. With wholesale, I figure- we may not make as much if our markup is 1/4 less, but we can count on our wholesale customers for repeat business and higher volumes. That being said, there are some things I mark higher than other due to the nature of the process (such as- tiramisu is a pain for us to make because it must be made while we are closed which adds to our labor cost. This I reduce somewhat from our retail, but not as much.
post #4 of 4

AngelFoodMN,

I think your mixing food cost with wholesale pricing. You have to start with the retail price in the market place and work backwards. Foodcost should come into play with labor and overhead. Establish what the account will retail the product for and work in your margin.

FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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