Retail Customer First-Time Purchase

Pricing Your Products

When selling your products, you want to make sure that you price your products in such a way that is fair to your customers and profitable to you. Like all businesses, you should charge your customer a price for the products that includes your profit, as well as any shipping charges, handling charges, and sales taxes that your business incurs.

When you purchase your products from Herbalife, you receive your discount, but you are also charged a “packaging and handling” fee, a “shipping” charge, and state or county “sales” tax if your state and/or county apply such taxes. Don’t worry about paying those taxes to your state or county because Herbalife takes care of that for you if Herbalife charges you such taxes.

To calculate how to set your prices accordingly: 1. Start with the “Earn Base” as defined by Herbalife’s “Wholesale Product Price List”. 2. Add to it the price you were charged for “Packaging and Handling” which is 8% of the “Earn Base”. 3. Add to that the price you were charged for “Shipping” which is 3% of the “Earn Base”. 4. Add to that the price you were charged for “Sales Tax” (if any), which varies from state to state as a percentage of the “Earn Base” (note that some individual products might not be taxed in your area). 5. Add to that your costs for shipping to your customer if you are shipping it.

That’s the amount you charge your customer. We suggest that you show it on the retail receipt as a lump sum total rather than itemizing it. We define it on the receipt for our customers as “Total including Tax”.

So here’s an easy way to be prepared for calculating that price efficiently. Add up the “Mark-up” percentages and use that as your standard “Mark-up” percentage. For example: in Wisconsin we are charged 5% “Sales Tax”. If we add that percentage to the “Packaging & Handling” percentage of 8%, and the “Shipping” percentage of 3% we have a total “Standard Mark-Up” percentage of 16%. Now when we make a sale we just use a calculator to take the “Earn Base” (or suggested retail price in the catalog), + 16% and that gives us the amount to charge our customer (plus the price to ship it to them if they don’t pick it up). So when we sell a bottle of Total Control for example, we take the suggested retail price of $34.60 + 16% = $34.45 for a total price of $40.14. If we ship it Priority Mail we charge an additional $4.30 (or whatever the current rate is), for a total charge of $44.44.

It is wise to have this all pre-calculated for all of the programs you sell and have that list next to you whenever you are talking to potential Customers.

Note: Herbalife will charge you a minimum shipping fee of $6.00 no matter how small your order. So if you order less than about 75 volume points from Herbalife in an order, you will pay more than 8% for shipping.

Rev. 12-17-2009