Metrics 6.docx

Worksheet Metric 6 Pricing Wholesale to Retail1 You are a manufacturer of widgets that sells your products to a wholesaler who in turn sells directly to retailers You have developed a new widget and you know that your competitions product retails for 23 in hardware stores You know yours is slightly better and are pretty sure your product could sell for 27 Assuming a retail margin of 333 and a wholesale margin of 25 what is the wholesalers selling price and how much can you sell the widgets to the wholesaler forAnswerIf the suggested retail price of the widget is 27 then Wholesaler Selling Price Retail Selling Price1Retail Margin271333 2710333 1800 Manufacturer Selling PriceWholesale Selling Price1Wholesale Margin1800125180010251350 2 As a small appliance manufacturer your cost to manufacture and package your coffee maker is 10unit You want this to be a cash cow so you decide to sell the coffee maker to your wholesaler for 19unit You know that the wholesalers margin is 25 and that retailers typically take 333 margins on small appliances What will your coffee maker retail for rounded to the nearest whole numberAnswer Manufacturer Selling PriceWholesale Selling Price1Wholesale MarginWholesale Selling PriceManufacturer Selling Price1Wholesale Margin191251910252533Wholesale Selling PriceRetail Selling Price1Retail MarginRetail Selling PriceWholesale Selling Price1Retail Margin253313332533103333798Therefore the coffee maker will retail for 3800