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…
I 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.”
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.”
Helpful? Please share!
