Answers To Several Questions About How Distributors Allocate Profits

[q] we have a product now. We are looking for a partner to do sales. Of course, it is also through the network platform. Now our situation is that they directly help us to promote, order, they have no risk. If our cost is 10 yuan, the lowest price we sell to the right is 20 yuan, and the highest price is not clear now. If it is 60 yuan, what is the reasonable profit distribution way between us?

Answer: regarding profit distribution, this requires all parties involved in the distribution to be divided according to their efforts, costs, obligations and risks when they generate this profit.

From your introduction, your cost is 10 yuan, and the profit is 10 yuan (the price you give to the seller is 20 yuan). Then, if they (vendors) through their efforts, they can sell the goods to 60 yuan, that is the result of the efforts of others, which includes the labor cost of the others, and perhaps the advertising cost, and perhaps the rebate to the buyers.

If you want to participate in this cake, it also depends on the settlement relationship between you and the seller: if the seller pays the goods to you at one time when the goods are out of the factory, that is, they are buyout, that is, to use their financial strength to complete the paction with you, then what kind of price sale does not have nothing to do with the seller.

This only shows that your original market price analysis has not been done or not done, so the ex factory price is relatively low.

But as a manufacturer, if there is no competitor, this pricing is obviously a mistake, so we can negotiate with the retailer to redistribute the profit, but the condition is to share the cost of sales, or that there is no problem in its own financial strength. Then, part of the credit is settled regularly.

This is reasonable, otherwise it will not be eligible to discuss the redistribution of profits with the sellers.

In general, the profit of the manufacturer is less than that of the retailer.

Capital turnover is the key to manufacturers because they are produced in large quantities.

To maintain a smaller inventory or even zero inventory, it is necessary for a product to be underwritten or purchased by the seller, that is, to make use of the timely funds obtained from the seller to maintain the turnover of production.

So for wholesalers, there is also a problem of capital turnover. They also need to have a certain amount of sales to maintain costs and generate profits, and their profits will not be very high.

For retailers, their sales will be relatively limited, so they need to have a certain amount of profits to offset their expenses.

Therefore, under the condition of Limited sales volume, the profit ratio of ordinary retailers is much higher than that of manufacturers and wholesalers. This is totally unnecessary for jealousy and Eyre.

If we understand the role of capital (or capital) in the production and circulation of commodities in the production and circulation, and who provides funds, it is easy to understand the distribution of profits.

Therefore, the determination of the selling price of a product has different calculation basis and rules for different links and sources of funds, but it is not static.

In fact, there is a set of theories of economics.