BSM 200 Final: BSM Notes Week 5 Pricing Wholesale to Retail.docx
11 Apr 2015
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As a product moves from the manufacturer through a wholesaler to the consumer, at each spot in the distribution channel, a margin is added and there is also added value. The margin is there to cover the added value. Trace the cost of a product from manufacturer through wholesaler to retailer; at each stage going to calculate the cost and see how we arrive at the consumer. Selling price = cost + margin = 100% Manufacture level: when selling to the wholesaler, have cost of goods sold + margin they want to make becomes cost of goods sold for wholesaler. When the wholesaler wants to sell something to the retailer, they add their margin to the cost of goods sold becomes cost of goods for retailer.
