Need your advice.
I’ve been suggested by a friendly competitor to markup my wines 30% more to private customers than i do to restaurants. Until now this hasn’t been an issue (as the volumes of what i sold to private customers are negligible) but i’ve been planning to start selling online and doing some aggressive promotion so the prices will not go unnoticed by restaurant operators.
The restaurants i’m selling to make 100% if not 200% markup on the wines i sell them and it might disturb them knowing that until now i’ve been just applying an extra 10% markup to the private customers, but since over here we have VAT customers pay an extra 20% just of taxes.
To recap the current situation is:
- Wine for restaurants = 100
- Wine for private cust. = 100 + 10% + 20% taxes = 132
What the competitor is suggesting is:
- Wine for restaurants = 100
- Wine for private customers = 100 + 10% + 30% + 20% taxes = 168
Except for those private customers that consume as much wine as some restaurants, to which i’ll be applying the same prices i do to restaurants + taxes.
This way if they apply a standard 100% restaurant markup they wouldn’t look like complete fools as their customers would see that they’re just applying a honest 20% markup.
What do you guys do in these situation? What do you think i should do?
Thanks