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Question about setting a wholesale price

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John3xvi
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Joined: 12/31/1969

We produced 5,000 copies of our first game in November of last year.

Salvation Challenge is a Christian game, and we went on 8 tv shows in the USA in November December and pointed the viewers to our website from which we sold just over 300 games.

We had hoped to sell quite a lot more, however we also recieved quite a few write ups in Christian as well as secular papers. We understand that news of the game has gone into January's Christian trade journals, which is the mag for the wholesalers retailers etc. And we have had our first enquiry from a wholesaler. (Previously we never contacted wholesalers as our manufactiuring date was to close to Christmas).

Our manufacturing costs were $7.50 per unit for 5,000 units.
We can produce a second run of games for around $4 dollars per unit.
We set the price of the game at $29.95
Similar games sell for $39.99 in Christian bookstores
QUESTION
What price should we set for wholesalers?

Any other advice welcome.......

John.

www.Mission316.com

johant
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Joined: 12/31/1969
Question about setting a wholesale price

From veritasgames:

A lot of production methods are sufficiently cost effective if you don't sell through distribution. In distribution, there's the rule of 5. If the retail cost is less than 5 times your manufacturing cost, you'll either lose money or you won't make money. Why? Because wholesalers often buy from you at 2/5 of the retail cost. So, you don't have a lot of room to pay for layout, design, artwork, marketing, etc. if your manufacturing cost is above 20% of the total. Some people have a rule of 4 instead, saying that you can spend up to one fourth (25%) of retail on total production costs (including art, layout, printing, design, etc.). The bottom line is, that there are always hidden expenses, so if your costs go above a certain level, then you won't make money at wholesale.

Wholesalers would pay around 12 $ according to this!

Our manufacturing costs were $7.50 per unit for 5,000 units.
We can produce a second run of games for around $4 dollars per unit.

In order to make any money its important to lower your manufacturing costs! 7,5 $ is too much when you acctually sell the products for 30 $.

Good luck
johan

fashun_diva
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Joined: 12/31/1969
Question about setting a wholesale price

Game distributors generally expect to recieve your game at a 60% discount off your MSRP. They would then offer your game to retailers at 40-50% off your MSRP.

So if you retail your game at $29.95, distributors will only pay about $11.98 (as what Johan said earlier) for each game.

From the distributors' perspective, they are little concerned with what your manufacturing costs are or what the MSRPs of similar games are (unless your MSRP is grossly higher than that of other similar games- then they probably would be wary of stocking your game).

Also, besides your wholesale price, don't forget to work out your general wholesale terms (e.g. minimum order quantity, shipping charges/terms, etc.).

John3xvi
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Joined: 12/31/1969
Question about setting a wholesale price

Hi Guys,

Thanks for the info.........

Say game retails @ $34.95 - 60% = $13.98 + Shipping

Is the above scenario correct ie - 60% + Shipping?

My question is in the USA do people always discuss a wholesale figure, and is it taken for granted that the wholesale figure is ALWAYS
+ shipping?

John.

www.Mission316.com

OrlandoPat
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Joined: 10/16/2008
Always Be Clear

I realize I'm jumping in on this thread a bit late, but better late than never...

Always be clear on your terms. Never assume the buyer will pay freight. If your wholesale price is $10 and your MSRP is $20, say that. When it comes to freight, in particular, different people make different assumptions.

You'll almost certainly be selling by the carton and I recommend tailoring your price sheets accordingly. For example, if you're selling a game for $34.95 that comes in cases of 6, your price sheet might have a listing like this:

Game Name: Game A (MSRP: $34.95)
Case Count: 6
Case Price: $104
Shipping / handling: $10

Notice the "(MSRP: $34.95)" trick? That's a real handy way of letting people know that you're quoting them their price and not the retail price.

Of course, this would look better as a single line on a table, but I don't know how to make a table here.

And yes, if you're selling to distributors, you'll have to come down on that price. Distributors typically pay 40% of MSRP and the freight charges are a negotiation point. I don't know anything about wholesalers.

- Patrick Matthews
Live Oak Games
www.liveoakgames.com

John3xvi
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Joined: 12/31/1969
Question about setting a wholesale price

Thanks Pat you said the below.........

Notice the "(MSRP: $34.95)" trick? .

1. What does MSRP mean in UK we have RRP
which means reccomended retail price.

letting people know that you're quoting them their price and not the retail price

I don't understand the above,

Thanks Pat

OrlandoPat
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Joined: 10/16/2008
MSRP

MSRP stands for "Manufacturer's Suggested Retail Price"

We started using the "(MSRP: $34.95)" trick because when we just listed our wholesale price, we had a fair number of retailers ask "I only pay half that, right?" or "what does the customer pay?" or "is that retail or wholesale?"

We found that including the MSRP with the product name effectively eliminated the questions of what price was being quoted.

- Pat

VeritasGames
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Joined: 08/01/2008
Question about setting a wholesale price

I just posted a new article on my website today in the Game Design section.

Go to: http://www.veritasgames.net/

under Game Design and look at the article on "Establishing Payment Terms for Distributors".

Let me know if it helps.

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