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How do you determine volume discounts?

What is the proper discount and at what volume do you determine each discount? I have been selling my product -- tea -- to mom-and-pop-type stores and they are buying 12 packages at a time. But now, I have been given the opportunity to offer a volume discount to a large chain store. How does one begin to offer this discount as to not offend my potential customer and also still make a profit?
The best bet is to set your wholesale price based on your cost to produce the product in volume, the standard or typical wholesale price of your nearest competitors, and what your retailer is willing to pay. The answers will take some homework on your part.

Do you belong to any associations where you could get at least some general wholesale pricing info from other members or their trade publications? You'll need to do some digging, and then some good negotiating with the store buyers.

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