By Steve Spence
Some months ago, Conde introduced a Pricing spreadsheet for its customers to use. Here is the intent:
1. You can go in and see the wholesale price for all Conde Products (always confirm price with the website since prices sometimes change without it reflecting in the spreadsheet.
2. Find the product you need by doing a â€œSearchâ€ in the upper right hand part of the toolbar in Excel. If you donâ€™t have Excel, request a PDF copy. You canâ€™t interact with a PDF but you can still see all the numbers except the ones you have to enter yourself.
3. By inserting the quantity you need, you can see at a glance what the product is going to cost and an estimate for shipping (10% of the cost).
4. You will then see some suggested retail prices drawn from years of experience by other retailers
5. You will see a variety of set prices determined by percentage (100%, 200%, etc.)
6. You can enter your price and see your profit. Try several prices and see how just a little added to your base price can make a big difference in your total profit.
This is the same kind of spreadsheet many big companies use to determine the price of their products. Now you can use the same tool yourself without having to create the spreadsheet and waste all that valuable time!
Hereâ€™s what I see as the biggest value of this tool: Say you have the chance to bit on a product for a customer: Go into the spreadsheet and enter the number of items in the appropriate box. You will immediately see your profit for that number of items if you use a prescribed percentage of markup. These numbers are highlighted in blue. Then enter what you think you want to price the item at and compare that to what others are selling it for and see how you compare. You will also see your final profit. Change the selling price and watch how the final profit changes. Of course, these are all estimates since they donâ€™t include the actual cost for shipping, waste, etc. but they will usually come very, very close.
The reason this project was undertaken in the first place was because too many retailers were (and still are) selling their products too cheap. Now, it is your business what you sell things for. No one is going to try to tell you what you must sell something for but leaving money on the table is just silly. After all, the primary reason we are all in business is to make money. We donâ€™t want to cheat or take advantage of anyone but at the same time, we must be fair to ourselves. We have to eat too!
Selling too cheap hurts everyone: You most of all but it also hurts everyone else in the industry selling the same item.
Did you know that the average markup for a manufactured product is 600%! It is. From the cost of raw materials to the wholesale customer, it is commonly 600%.
Think of it this way: You are the manufacturer. True, someone has to make the raw product for you to decorate but still, you have to decorate it, deal with shipping, waste, mistakes, time, taxes, overhead, etc. To buy a name badge for instance for less than $1 including the fasting on the back and selling it for $3 is just crazy. Even $6 is too cheap! Now, if the customer is buying 50 of them, $6 might be a reasonable price but not for one. So, you need to adjust your prices accordingly. For a single name badge, a 900% markup or more might be in line.
On the other hand, there are products that just wonâ€™t work in that formula. Shirts for instance. Some shirts cost $8. Can you sell one for $48? Probably not. So a compromise must be made. Thatâ€™s where the spreadsheet really helps because at a glance, you can see the selling price at different markups. You donâ€™t have to do any math. Just look up the stock number of the product you are interested in and find it on the spreadsheet. It does all the rest.
This spreadsheet will be updated periodically to include new products or reflect price changes so, from time to time, check to be sure the version number you have is the most current. Right now, the latest release is 2015.4. That is 2015 version, update #4.
If you are new to our industry, Welcome! This spreadsheet should become a bible to you. It should be kept handy during all sales until you get these numbers in your head. Even then, it never hurts to double check to be sure you arenâ€™t â€œleaving any money on the tableâ€.
One final thing: If you sell products that arenâ€™t listed on this spreadsheet, you can add them. You will need to know a little about Excel to add very many but spaces have been left in various places where all you need to do is enter the basic information and the program will do the rest.
To get the spreadsheet, call Conde (800-826-6332) and any account manager will send it to you via email. It will come in a zip file with several other tools and blogs. You will need WinZip or 7zip to open the zip file.Â Good luck!