Hi,
About a year ago I asked about wholesale pricing and most people responded saying that "keystone" was the rule (retail=wholesaleX2).

That has worked for me so far, however I now have a potential opportunity to sell a product in bulk (1-2,000 units), and need to get back to this person with my prices for for large volumes (In this case it would be used as giveaways rather than retail). Obviously I will need to drop my price quite a bit from keystone, but how low should I go? Are there any rules on tiered pricing stuctures (e.g. specific percentages for specific volume levels)?

Still haven't found a thing on this. I took a stab at developing a tiered structure. Does anyone have any feedback on the following:

5-15 units: 60% of retail
16-35 units:50% of retail
36-150 units: 40% of retail
150-1000 units: 30% of retail
1001+ units: 25% of retail

I was a bit hesitant at first to respond to your message - mainly because I did not know

Having said that, I doubt there is a standard since mark up on different products vary. For example take a look at pete's post and the markup there.

We came up with something on our reselling / hosting plans that were somewhat similar. What you want to somewhat look at of course is how much money you will be bringing in.

In your example above, I do think that 150-1000 is a bit too large - maybe break that down to 150-500 and 501-1000 (35%)?

When we sell bulk, we usually break it down 1-50, 51-200, 201-500, 501-1000. You are giving too many price breaks, I think, but I do not know what you are charging to what your cost is, or what the normal amount of products purchased at one time is.

Thanks Corey and Comtrad,

Here is the latest that I came up with.

5-15 units: (60% of retail)
16-50 units: (50% of retail)
51-150: (40% of retail)
150-500 units: (35% of retail)
501-1000: (30% of retail)
1001+: (25% of retail)

It is a CD-ROM so there is a pretty big markup from what it costs me to manufacture, but that doesn't account for the time I put into developing it. Here's my rationale, most orders to retail outlets purchase 25-35 in an initial order then periodically order more in increments of 15-25, although some of the larger ones will order up to 75 at a time. The larger orders would likely not be for retail, rather for giveaways or promotional items, etc., therefore I am willing to drop pretty low on price.

Putting aside the price break points, how do these percentages look?

Is 25% too low to go in this case?

Think about it this way - your own retail sales, and your dealer (50 units or less) are your bread and butter and will not only cover your production costs, but your development and related costs as well as provide a good return for you. Considering that you could do well selling in that manner, look at the truly volume orders as "gravy".

As long as you do not incur any additional equipment or labor costs to produce this new volume, just making more at no added expense except materials and utilities, think about it as a bit of icing on the cake. You don;t need it to survive, but it could contribute to your pocket change.

So, don't think about discounts, think about your true production cost per unit and work up from there. This is a chance for some "down and dirty" extra income that is outside your normal business plan. What is it going to cost you to produce, include packing and shipping time / costs, get to the real bottom line - then add 10, 15% or so and get on with it.