Regardless of where you are in the supply chain, alternate sources confound pricing decisions daily. Animal owners are often full of low-price information without understanding whether it was on a different size, pharmaceutical equivalent or a targeted promotion as part of a bundle. The Retail Price Index is designed to help animal health pros understand market pricing and not over-react to the rumor of the day.
Source: Today’s Veterinary Business, October 2, 2017.
INSIGHTS: Pricing OTC products requires market knowledge. The exercise of pricing them is best completed when using price-based costing instead of cost-based pricing. Margin calculations and purchases can be determined once the market price is estimated. Pricing this way helps make decisions about various rebate and promotional offers, as well.