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Hello all want to discuss profit margins in wholesale and retail marketing.can any one please elaborate.
From India , Bangalore
Hello,
In case of Retail marketing profit margin should be kept low as people won't buy high priced product generally.instead they will go for 'value for money' products.so don't put a high profit margin in case of retail.
In case of wholesale you can go for a bit higher profit margin as peoples generally buy in bulk from wholesaler.so a bit higher profit margin won't affect the buyer to change his decision.
Regards,
Dev
From India , Bangalore
Dear Dev
I am not in agreement with you. In wholesale normally the materials move in bulk a minimal margin in profit will fetch large crowd and the sales volume will bring good earnings out of it. Normally the person trading only will approach the wholesaler. Hence higher end profit rate will obviously give second thinking in the minds of the retailer to approach the distributor of the state directly. So the ultimate loser will be the wholesaler due to higher profit margin.
But in retail, the volume is less, hence to generate more revenue the retailer has to fix the profit little bit higher side.
From India , Hyderabad
Over the last decade or so we have seen the disappearance of most wholesalers in our country, simply because people would rather visit a shopping mall and have the variety it offers than to visit a wholesaler that offers a limited range. The only thriving wholesaler has a very diverse range of product, advertisers nationally on every medium available and is very price driven but their strategy with suppliers is to move volume and extend their rebate structure when volume targets are met.
I hope this give you some insight,
Regards,
Rajen

Dear Rajen
Normally the wholesaler is the dealer or area/district/state/country distributor and others we may consider them as retailer. Nowadays no one is visiting for a single item to purchase in bulk to a specific shop. Almost all are visiting to some big departmental shop and further more they are purchasing the material over phone and the retailers are supplying the material to the residence of the customers.
From India , Hyderabad
Hi,
It all depends on the type of product you are selling & the number of days of your cash generation cycle i.e. how many days does it take to convert you raw material / purchases again into cash i.e. sales. Like in case of manufacturing industry it starts from date of purchase of raw material and ends at receipt of money of invoiced amount. Another factor is capital employed. Based on these factors margins of items are fixed. There are standard norms of cash cycle for each industry.
Ajay.
From India, New Delhi
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From India, Gurgaon
Dev and Rajen are wrong. With regards to the margins, you need to look at the retailer and wholesaler from the manufacturer point of view.
If the retailer margin is less, he will never stock our product. A retailer margin can vary from a 4% for a high volume fmcg product to almost 25% to a pharma product.
The wholesale guy is basically responsible for spreading the product in the market. He works on volumes and hence is on much lower margins compared to a retailer. He works in margins ranging from 0.5% to 1% to 3% for super distributors responsible for rural markets
Regards
Rajeev
From India, Madras
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