What is the best way to raise prices of products selling to major retailers?




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This is a Quora question I was asked:

What is the best way to raise prices of products selling to major retailers? For a consumer home products brand selling to major retailers online (Home Depot Walmart, Costco, and so on), what is the best way to raise prices?  We are 3 years old and this is the first price increase. Ideas and strategies to get 3-5% without increasing our MAP would be great!

My answer is below.

Here are strategies for raising prices:

  1. Research your competitors and justify the increase if they are also raising prices.
  2. Come up with a different model/newer version with additional value that justifies a price increase, but the value add is not as expensive, so you your cost of goods sold does not increase on a liner basis.
  3. Give your retailers an extended period of time where they can purchase product at the old, lower price, so they get extra margin for the trouble.
  4. Run more sales off of the new price for a period of time to help ease consumers into it, then back them off to your normal promotion schedule.
  5. Offer discounts on volume purchases by the consumer, so while your anchor price goes up on a single unit, you still offer discounts on volume.

A sneaky way for vendors to increase prices is to reduce the item size or count (if multiple items in a package), and lower the price, but not on a liner basis as the size reduction, thereby in effect, raising the price.  This is not a good approach, in my opinion, because consumers will take notice. It use to work, but I think now just tarnishes your brand image.



I post what I see and do in consumer products. But I am just one person with my own perspective. I want your opinion and observations from your point of view. Please comment below so I and others can learn. Thank you!


2017-05-10T11:35:20+00:00By |Categories: Resellers|Tags: |0 Comments

About the Author:

I am a startup and growth company expert: sold 1, built 5, and crashed 2. I develop, launch and grow consumer products through uncommon methods that can lead to more sales – faster – and can make a company and its products more appealing to consumers and resellers, with less risk. More about me here.

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