How to determine your prices in B2B sales?

When selling on a dedicated B2B platform, it is essential to establish two prices for each of your products: a suggested retail price (SRP) and a wholesale price.

The suggested retail price (SRP) is the price at which an end consumer will purchase the product, including the retailer's profit margin. Additionally, you need to set a wholesale price for each product, which represents the unit cost at which a merchant will source it for their store.

Now, how should you approach pricing? Your wholesale prices should take into account the costs of materials, labor, and the profit margin you aim to achieve per product. As for the suggested retail prices, they should consider the targeted consumer segment and the profit a distributor wishes to make per product.

When establishing your prices, consider the following elements

Your brand values: If you emphasize environmentally friendly materials or offer higher wages to your employees, your overhead costs may be higher. However, your target customers may be willing to pay more due to their alignment with your values. The price point of your ideal customer can also influence the choices of materials and methods you use, or vice versa..

Profile of your target consumer: Does your product cater to consumers with high income or those who shop on a tight budget? Are they buying gifts or items for themselves? Do they reside in a small town or a bustling metropolis?

Pricing practiced by similar brands for comparable products: Conduct research to understand what your target audience is willing to pay for similar products.

Tip: If you currently run a direct-to-consumer business and are venturing into B2B sales, charging 50% of the suggested retail price may seem challenging. It is important to remember that B2B sales operate under a completely different business model.

By carefully considering these factors, you can establish competitive and profitable pricing for your B2B sales, ensuring the success and growth of your business in the B2B market.