Hey Guys,

Im going to be preparing my first packet trick to attempt to sell. Its going to come with an instructional DVD and gimmicked cards and Im shooting for a $10.00 price point at retail.

My question is this, in college I retailed computer software and the industry standard mark-down to retailers was 40% for single unit, 50% for 10+.

Whats the expected markdown in magic? If you don't want to post it publicly feel free to PM me.

Thanks

JK

I think it is about the same.

You are going to get different answers from different sellers. Many of the larger places will want large amounts, and want to have deeper discounts.

I think you are looking at this in the wrong way, It should not be a Mark down. You need to determine what it is that you need to make off this effect, if that is $10.00 then this should be your Wholesale (not retail) then the Retailer can mark it up another 30 - 40% to get there profit but you should not mark down. you should also add 30 - 40% when selling to the general Public as well because you do not want to be in competition with your retailers

Again, times have changed, with all the imports from India and 4th world countries. Jobbers, wholesalers, and retailers like their 100% markups on magic.

To get them interested in handling the product, you need to sit down and figure the actual cost of each item made. If you have to buy 10,000 cards printed, then figure the price for 1 card. Figure the cost of paper, envelope or plastic bags, design of the cover that draws interest to the package.

Once that price of actual item is determined, then add 10 or 20 percent for your service. The jobber will want to at least double that figure, and the wholesaler will double that, and the retailer will double that. So if the item will costs $5, then it will sell for $20 more or less. The 40% markup is a thing of the past, and many dealers will not bother with this kind of markup any more. You may interest them if you offer a drop ship to them. That way they have not financial funds tied up, except for advertising it on the web or print.

I wouldn't go so far as to say, those numbers and the way we dealers do business is 100 percent accurate. Jobbers rarely double and depending on the item the mark-up varies by the number of sellers and how many are internet stores.

The best way to go about it is to make sure that it's a sellable product then ask your price from the jobbers or sell direct. Contacting dealers directly is an uphill battle with most, unless you have a hot item. They will also prefer to have you ship the item to them, as opposed to drop shipping, because they do not want you to have their client list.

Your cost of goods are going to be what they are. You may have some option to slide these up or down marginally through quality of inputs or economies of scale, but at the end of the day, you'll likely be within a certain range. The mark ups required for intermediaries to viably resale your product will likely be dictated by the industry with some additional marketing costs incurred but either side of the value chain. This will likely leave you at a certain range for wholesale and retail price points. Just be careful to test those price points with prospective customers to verify your value package as perceived by them. IF they are willing to buy at those ranges .. or possibly higher ... you've got a viable opportunity ... If not, reconsider your plan. The sad part of the magic industry is that there are not that many of us and thus prospective volumes are low .. especially given the amazing creativity in both intellectual property and innovation in magic. Therefore price is often crucial to recover the investment costs in bringing these innovations to market.

Dan.

Dan

You know what;s funny, many times I would call on a dealer to sell a new item and they decline because the say they only want to write one check at the end of the month.

So how do you carry unique items, that build your customer base, when you only carry what everyone else has. That is a rhetorical question because it's no secret that many magic dealers are not good business people, they sell magic because they love the action.

Perhaps Cyberqat could make a few samples (like you said) and see what the focus group testers come up with as a retail price, then go from there.

I guess the other possibility is just to accept that volumes are likely to be low enough that I should handle it myself and just try to build a word of mouth customer base.

My rough back of envelope for cost of goods, assuming some wastage,is about $2.50 for gaffs and disc. While I could ignore my labor if its justa few to test market, I need to ask myself if I am going to make a lot of them, whats my time per worth. If I say $5.00, it doesn't leave a lot of margin in a $10.00 product. If there are multiple middle men all wanting to see 100% return, that's going to shot up beyond where I think this thing aught to be as a price point.

I hear you and regretfully many good dealers are being caught up in the erosion which is making many brick & motors shops an endangered species. This will only drive potential volume further down over time. Many innovators have little choice but to leverage the internet and sell direct. I'd be cautious to not under price your product and leverage the extra margin in some "buzz" marketing initiatives: a good online video, Magic Café banner ad, etc. You really only have a short window to recover your development and hard costs as the market will likely trickle down over time.

Dan.

Right off I see your cost of goods for a card trick is way to high, you must find a way to lower that cost. Remember you have to add in the artist cost for design of package or card if put in a plastic envelope. Then of course the cost of plastic envelopes.

You say your labor is $5 per unit, or do you mean $5 an hour? If you mean $5 per unit, that is way to high.

If you pay yourself $5 per hour, how many can you make in an hour working at lighting speed, without spoiling any parts. If you can produce a hundred, say in an hour, then your labor is 5 cents per unit.