A)Information Sheet for the SellerWhat will be your initial offer? $_________(total price 500 cases)

 B) Why?What is the least you are willing to sell for? $_________(total price 500 cases) Why?

Notes: 5% discount on $9,000= $8,550; 10% discount= $8,100; 15%=$7,650; 20% discount = $7,200; Case=one dozen, 16 oz bottles for all products. *Fair Trade pays farmers a fair price for their products and promotes the use of sustainable farming methods that are safer for humans and the environment

Pricing Options and Comparisons	Total Price 500 Cases
Guayakí Wholesale Average ($1.50 per bottle)	$9,000
Whole World Market (20% discount = $1.20 per bottle)	$7,200
Guayakí Small Order (10% premium=$1.65 per bottle)	$9,900
Avg. Competitor Wholesale ($1.40 per bottle)	$8,400

Seller - Director of Sales Guayakí Company

Yerba mate (pronounced yer-ba mah-tay) is a tea made from the leaves and stems of the mate tree that grows in the subtropical rainforests of Paraguay, Brazil, and Argentina. It has been revered for centuries in SouthAmerica as the “drink of the gods” and is enjoyed for optimum health, sustained energy, and mental clarity. Yerba mate is now becoming a popular drink in the United States because of its fine taste and nutritional qualities. The leaves naturally contain 24 vitamins and minerals, 15 amino acids, and abundant antioxidantsall of which contribute to the “good energy” people feel when drinking yerba mate. Many coffee drinkers haveswitched to yerba mate tea as a healthier alternative that still makes them feel alert and energized. Yerba mate has become particularly popular among college students who not only like its stimulant value but also its health benefits.

You are the director of sales for the Guayakí Company that supplies seven different yerba mate drinks withrevolutionary “fusion” flavors such as Pomegranate Clarity, Peach Immune Support and Citrus Stamina. The Guayakí products are great tasting and the company is known for its commitment to the conservation of rainforests and its partnership with small farmers and indigenous communities that harvest and process the leaves from the mate tree. Guayaki products are organic and Fair Trade* certified, designations which are very important to marketing its products which are slightly more expensive than other suppliers who are less involved with conservation and community development.

You will be meeting with the purchasing director for the Peace Café, who operates eight cafés in and around the University of California, Berkeley campus, to discuss the purchase of 500 cases of your bottled drinks. Although you are very enthusiastic about the opportunity to have your products in the Peace Cafés (especially because it would help your brand be better known among the socially active Berkeley crowd), you are hesitant to lower your prices substantially to do so. Your price is higher than your competitors in order to achieve your social and environmental missions in South America. The Guayakí brand typically retails from $2.00 to $2.50 a bottle. Your biggest customer, Whole World Market, purchases more than 100,000 cases of your bottled tea a year as well as your other products (tea leaves/bags, tea concentrate, energy shots, native drinking gourds, etc.). Whole World Market receives the maximum 20% discount off the typical wholesale price. (See price chart below.) You would not give such a large discount for a small order of only a single product line. Ideally, you would like to sell your product to the Peace Café for 10% more than your average wholesale price of $9,000, given the small size of their order. Currently, you are the only organic, Fair Trade certified, yerba mate supplier with seven different fusion flavors bottled in the USA. Marketing has also shown that customers prefer the taste of your products in comparison to those of your competitors.

Answer rating: 100% (QA)

A34500 B9000 Remember cost of goods sold is the cost to the seller of the goods sold to customers Cost of Goods Sold is an EXPENSE item Even though we ... View the full answer