How Should You Price Your Food Product?

At this week’s Fancy Food Show in CA, attended some great lectures that reinforced and sparked ideas

often say: “Volume & Margin are the 2 key ways to Make Money!” 

In his Pricing lecture, Jonathan Milo Leal of Milo’s further explained how “numbers are the language of business.”

Terry & Jonathan Milo Leal of Milo's

After all – Margins & COGS (Cost of Goods Sold) are critical to Price!

Price = COGS /(1-Margin)

Here are some fun & educational quotes from Jonathan:

On Getting Started

  • “Get it right from the start.  Don’t put your mortgage and marriage on the line and go out of business.”
  • Know what their margins are and your numbers are before going in (to an account).”
  • “It’s not your responsibility to pay for freight.” (Say FOB Warehouse!)

On Assessing & Negotiating

  • “Costs creep up. Every six months, do a thorough costing and pricing review.”
  • Pricing Opportunity – there’s “wiggle room! It’s amazing to get what you ask for, when you talk to your retail stores.”
  • Get “freight broker quotes – Wouldn’t believe the price ranges! Way better rates.”

On Terms – How to Get Paid

  • “Fight back. I’m on a first name basis with every distributor’s Accounts Payable person, to get paid.”
  • “I love the customer who pays on time without needing nagging. I treat them like gold!”

A Touch of True Humor – Not!

  • “It’s like signing a deal with the devil – signing a distributor contract for life.”
  • Irony:  “90 day lead time for distributors to take a price increase. Only 1 day to take a discount.”
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