The selling price of any item is based on supply & demand. What does the same item sell for elsewhere?
Buying from a distributor has it's advantages. First of all, they are licensed to do business, the product that they sell is being tested by the Food & Drug Admin.
Buying from private people is scary. What happens if one of your customers gets sick? Are the private people being watched by the Food Saftey programs? Are they licensed?
The distributors WILL make money, don't worry about that. what you need to do is find out specific items that you will be selling, and go and find what other stores are selling that identical item for.
For example, Store "A" sells a ham sandwich for $3.50
Distributor "B" sels you the ham sandwich for $2.00, you would make a $1.50 profit, which is about 60%...which is about right for perishable items. But, on the other hand if Store "C" sells that same sandwich for $2.50, you would only make 50 cents, which is NOT a good enough mark up. Perishable items should typically garner at least 60%, if not 100% because of loss.
Packaged items that are not perishable, should garner at least 35% and up...providing the market can bear that (i.e. that other stores in your area have the same products for even or more than you sell it for)
This is a task for ALL retailers is making sure that you make enough money to stay in business, but be competitively priced so that customers will come to your store...it is a fine balancing act.
One wise old retailer once told me to start selling product very cheaply at first (when you first open) to get them into the store, and then gradually, over months, raise your prices so that you can start making money. I think the thing that drives most retailers out of business myself is marking an item to inexpensive. There are tons of hidden expenses in running an establishment.
Good luck!
