Price! It might be cheap for a reason. Do you know the right price?

Published on: 19 Jun 2013

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Price! It might be cheap for a reason. Do you know the right price?

I am constantly being told by some wholesale intermediaries that we are too expensive. Or that they cannot sell at these prices. Then ‘strike me’, I find that we are not the most expensive syrups on Amazon! So what is the issue with price?

If you are a consumer, the price you pay reflects not just the cost of production, but also the quality of ingredients, the method of production (size, situation, skill) and you never know,  so long as you are not one of those ‘whinging about the price’ Asda shoppers you will appreciate the difference.

If you are an intermediary, that is a wholesaler, retailer, etc, then the price is all about margin. How cheap can you buy, how expensive can you sell. If you are some of the more ambitious intermediaries, you can even charge the supplier for listing and promoting and the consumer or the joy of shopping on top of the margin (delivery charges, membership etc).

Nothing wrong with any of this, it is after all a market place. However, non-final consumer facing customers do seem to get a bit vexed about the issue of price.

If you are an intermediary (wholesaler/retailer), it could well be that despite being a ‘bright young thing fresh out of uni’, you might know all there is to know about the supply-chain and production. Just because the last sales person to pop in for a chat knows no other method of selling than discounting, it doesn’t mean that it is a sustainable price.

We have just discovered that a shed (several supermarkets worth) load of lasagnes tuned out to have been running late at Kempton. Why?  Because intermediaries like wholesalers and retail buyers made a great issue out of price. ‘Make it cheaper’? Well you got it cheaper and it turned out to be no good!

What price? Well, it is not just money. Brands that had a reputation to admire have a new reputation now. Jobs lost and even some assurance schemes questioned. That means that we are at risk of falling into a very serious situation. Look at China. Now despite the costs and scarcity, China will pay a serious premium for milk and dairy products (infant formula etc.) for British products, because they are trusted.  These products come not from British retailers, not from British wholesalers, but actually from British producers and manufactures.

So, price. Let’s see if we can really calculate the cost?

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John Taylerson profile

John Taylerson MBA, FCIM, chartered marketer. More importantly is HACCP level III, Food safety level III ihave a forklift and HGV licence. Running two food & drink businesses  (Malmesbury Syrups makes coffee and mulling syrups and Dairystix makes UHT milk portions) means I have a good view of the issues. Food & Drink Ambassador and Chairman of the Chartered Institutes of Marketing in the south west of England. Worked at every stage of the food supply-chain from farming to retailing, with lots of production, processing and product development in-between. This means I have an opinion on almost every aspect of the food supply chain and not shy about sharing it.

This blog Is my personal view, it isn’t the view of any of the companies I work with.

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