Our one reader asked us about one very common problem that is faced by all franchisee or distributors. In a life time , every franchisee has to face this problem. This is MRP ( maximum retail price ) problem. MRP is calculated according to market trend or after discussion with all franchisee or distributors parties. MRP can’t be based at single party’s need. Read here procedure to calculate mrp.
What things do I consider when I finalized MRP of any new product?
Before finalizing mrp of any product, I always send mail to my top most clients and distributors with mentioning brand name, composition, pack and packing etc. I always leave mrp column blank and ask them to fill and revert back to me. If I say truth, I don’t known about market’s trend. I am totaly dependent at them. What is going in market and what will be best possible mrp for any composition. They know very well and can accurately tell what could be the best possible mrp for this combination. I don’t want to disturb them, so I always send nearly 10-15 products at once for their feed back and mrp.
They give views about whether any combination can run or not, and what could be best mrp for it. This is not the solution for finalizing problem. Suppose, I send mail to 25 parties. Out of twenty five , if fifteen will revert back, mrp of all fifteen will be different. For example if I ask for Rabeprazole with domperidone SR in 10*10, alu-alu pack. What will be reply for all.
Reply will be like:
A – 75/- per 10 cap good movement
B – 80/- per 10 cap average
C – 78/- per 10 cap good
D – 90/- per 10 cap may be
E – 99/- per 10 cap not moving
F – 82/- per 10 cap good moving
and so on….
In some cases, not a single party will revert with similar reply. Then which mrp should I fix for this composition. You can guess…
May be I wrong here but I have to fix. I will talk personally to all and will do another mail with mrp nearly average of all mrp’s. If out of fifteen, majority satisfy, I will fix MRP accordingly.
Now come to the question. What was the actual question – Can we sell product at low rates or mrp from actual mrp?
Everyone has encountered with this question during promotion and marketing for pharma franchise company product. My reason of above explanation was to give you our method for fixing mrp. Now you can understand why do you need to look for mrp of products before starting pharma franchise marketing. Don’t rush to compare net rates only, mrp also play important role.
There may be two way to reduce or low down mrp of products:
Special MRP: If your quantity is high or you can sell product at good quantity at monthly basis, then you can talk with company and say you need special mrp of this product. If you are unable to take whole batch at once, you can opt with monthly quantity and convince company to agree with you. In special mrp, you can also increase mrp of product if you are not getting proper margin.
MRP mask: You can’t increase mrp or you can’t sell product at higher than mrp but you can sell product lower than actual mrp. No one can object if you are selling at low mrp. You can mask mrp with sticker or other mean and fix it at lower mrp.
First one is very good option if your product in high demand and you can sell minimum of 100 boxes per month. One main drawback of this method is that you could have to invest for whole batch. That investment can ruin your financial planning.
Second one is simple and easy to use. Only single problem with this is that it don’t give good impression. But in quantities like 5, 10, 20 box per month, it works very well. Main drawback of this method is that it feels unethical and manually altered.
Hope this article will be helpful for you. You can contact us at email@example.com for any suggestion and query or leave comment or fill contact box.