Results 1 to 6 of 6

Thread: Pricing on website for distributors

  1. #1

    Question Pricing on website for distributors

    Hello, We are in our 4th year of business. We design and manufacture specialty products for the electrical industry that hold their tools. We have grown and now have both online sales and also accounts with a few utilities and distributors. We have added in the last year higher end products we designed with a large utility and we want to offer them to individuals on our website and to use the site to refer to for potential new distributors and utilities.

    Here is a example of my issue:
    We sell a product to a distributor for $800 each and we find they mark it up about 20% to the utility which I get. How can we put these same items on the website at the retail price? I can see why a distributor who is paying $800 does not want their customer which is the utilities to see what they are buying them for if we list them on our website. I probably made a mistake from the beginning charging the distributors the retail cost from the beginning. I am considering putting them on the website with a "Call for pricing" but my partner thinks that does not look transparent. I doubt I would get many personal sales at that price point but it would be very helpful for marketing to let not only the utilities see our products online but also the employees of the utilities see them so they can market them for us to their tool committees and management as they have in the past.

  2. #2
    Registered User
    Array
    Join Date
    Feb 2013
    Location
    Ontario, Canada
    Posts
    1,379

    Default

    I would think some sort of plugin that would allow for tiered pricing specific to each individual user. I'll let the web gurus chime in with their real recommendations.
    Brad Miedema
    Fulcrum Saw & Tool

  3. #3

    Default

    Here is what one large industrial manufacturer in a niche industry does. See it this helps?

    - Puts MSRP on the manufacture web site
    - Gives most distributors 30% off list
    - Some distributors sell on price, others VAR, others service etc.
    - Some distributors get special pricing, but not a lot
    - I sold their stuff above MSRP and got enough sales to be happy

    Note: They don't sell direct, just through distributors. They drop ship. Most items are quick lead time but custom and $1k to $10k. There is no reason to take on the overhead of selling directly to distributors and take on the overhead. The manufacturer does provide good customer service to anyone that calls. Its a fairly technical product.

  4. #4
    Registered User
    Array
    Join Date
    Mar 2015
    Location
    Beaver Falls, PA
    Posts
    942

    Default

    We put all our pricing on our web site. About 65% of our sales a direct to the end user. About 35% is to a dealer. The prices we put on the web site are MSRP. The dealers know their discount so they can calculate their cost. Having the prices on the web site is good for both since a dealer can confirm that the prices haven't changed or what they are. In our case most of our dealers get a 24% discount.

    Another option you could use would be to have a section of your web site that is password protected and contains dealer cost for your products. If you don't have your pricing set so that you can have the same discount on all products that may be a good option.
    Ray Badger, Turbo Technologies, Inc.
    www.TurboTurf.com www.IceControlSprayers.com

  5. #5
    Registered User
    Array
    Join Date
    Feb 2013
    Location
    Ontario, Canada
    Posts
    1,379

    Default

    Somewhat off topic, but where are you guys finding dealers/distributors willing to sell on a 20-30% discount? Seems like the ones I've talked to want 40-60% including all service work.
    Brad Miedema
    Fulcrum Saw & Tool

  6. #6
    Registered User
    Array
    Join Date
    Mar 2015
    Location
    Beaver Falls, PA
    Posts
    942

    Default

    Discounts vary a lot by industry. Early on I was involved in the Farm equipment, lawn and garden equipment and boating equipment business. Standard discount for farm equipment stores was 20% + 5% if they paid in 10 days. For Lawn and Garden it was 25% + 2% 10 days. For boating stuff mostly 40%. Clothing is often 70%, Jewelry 50-70%. Sometimes it is the price of the equipment. You sell a farm tractor for 40K making 20% is a lot of money compared to selling a shirt for $ 30.00

    Our discounts vary more than I said in my previous post where I was trying to keep it simple. We usually give 20 + 5% to a stocking dealer or active dealer. We get a dealer where a customer walks in and asks them to get a piece of our equipment and the odds are we will never hear from them again we give them a 15%. Same with rental stores that really are buying for their own use as a rental item we give them 15%. That is pretty typical in our industry but would not cut it in other industries. When we buy since we are an OEM we typically get somewhere between 50-60%. Of course if we sell that item to a stocking dealer we are giving them 20 + 5% so we need that much.

    Sometimes there are big chains of discounts. Way back I sold something called a tractor top link that was used to hook implements to farm tractors. I bought them from a guy in Ohio who bought them from China. I paid him $ 8.50. I sold them for $ 16.00. Most dealers paid more so they typically sold them for $ 49.00. Now if the guy in Ohio was selling them to me for $ 8:50 I am guessing he was paying no more than $ 4.00 - 5.00 Probably the cost to make them was around 2 bucks since the company in China needed to make a profit so here was an item that cost 2 bucks to make and sold for $ 50.00
    Ray Badger, Turbo Technologies, Inc.
    www.TurboTurf.com www.IceControlSprayers.com

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •