Retail Growth Strategist for Emerging CPG Brands | Faire Sales Specialist | Founder & CEO @Product & Prosper, @The Prosper Lab, @The Retail Lab
Want buyers to say yes faster to your product? Here are 2 pricing strategies I've seen consistently unlock retail success for CPG brands: 1️⃣ Keep your pricing consistent across similar SKUs. Here's what I mean: • All your short pastas = same price • All your long pastas = same price • All your 12oz cookies = same price • All your 8oz cookies = same price Why this matters: 🔍 It shifts consumer focus to what REALLY matters: your product differences. When prices are the same, customers stop playing the "which one's cheaper?" game and start asking "which one's right for me?" 🌟 It creates a beautiful "brand block" on shelf. Consistent pricing creates visual harmony that makes it easier for shoppers to spot your brand and pick it up (and more of your product in carts makes buyers happy!) 2️⃣ Give retailers healthy margins from the get-go. The magic number? For most categories, 40% retailer margin is your absolute MINIMUM. And if you're in a more commodity category (like pasta), even 40% won't cut it to be attractive (unless you are literally the best thing since sliced bread). 👉 For the quickest path to shelf, aim for leaving space for 45-50% retailer margin. The reality? Retailers need to keep their lights on. Anything less than 40% margin, and they're often losing money just by taking a chance on your product over a proven seller. Plus, the way buyers are incentivized is to increase overall margin for their category selection. TLDR: Give buyers the margin that makes your product attractive, so you have a better shot at shelf space! Look: I want to see you win at retail. And the right pricing strategy isn't just about getting on shelf—it's about building the foundation for your brand to thrive there. Curious about your experiences... what pricing strategies have helped you or brands you know win with buyers? 👇
You simply can't discount the paramount importance of a coherent, competitive pricing strategy (pun absolutely intended) for your brand and assortment. For me that means starting at the END (on shelf price) not the beginning (COGS) and take direct comps into account. Is your value a trade up or trade down? See the set through the consumer's eyes. Work back your pricing to include a 50% margin for the retailer, 30% for distributor's, and 10% "extra" for the combination of broker fees, trade spend and discounts. Reconcile against your COGS. Look at whatever's left from both a margin and total $ perspective - this dictates your market viability (and also influences channel strategy). From there you can see what "levers" you have from a pricing perspective - but you're setting a floor and ceiling with your cost bands while also being realistic. Have you built in enough for product discounts, BOGOs, etc? This applies to all channels. The complaint I often hear is "but there's not enough to go around and still make money" . Exactly. So maybe you only sell DTC or work with INDEs who will take direct shipments. But better to know viability before shelling out 15K for an ECRM only to realize the math doesn't work.
Emaan Irfan
1w
I couldn’t agree more on both points! In my own experience, pricing consistency helped reduce decision fatigue among buyers. It shifts their attention from "which one's cheaper?" to "which one fits my needs?" And as for margins, I’ve worked with brands where the retailer margin was too low, and it ended up hurting both sides. Buyers want a product that benefits them too, not just the consumer. It’s all about that balance!
Buyers need to hit their target margins each quarter, or they won’t be buyers for very long. When I was a buyer at WFM, I would absolutely go out of my way to push any product I could with above-target margins over those below.
This is often overlooked. It is important to create a pricing architecture and the relative prices make sense together.
This is gold ma'am Thank You!
All your insights are so useful. Thank you for all you do, Caroline!
Co-Founder at Lemonicious Drink Co. | Elevating Tastes with All Natural Beverages Made With Real Fruit | Creating a Category for Super Premium Beverages One Sip at a Time
1wGiving a retailer a 40% margin is easy when selling direct. The hard part is when you aren't and have to factor in the broker, distributor, and ad spend percentages.