I am in the process of launching my firm which will supply business promotion merchandise like bags, apparels, gifts, gadgets and so on. As the business owner I would be deciding on the margins initially. But later when the business grows, should there be process for institutionalising pricing. How does manufacturing companies decide on the price. I know some do based on IRR or Pay Back time. We will be part manufacturing and part sourcing. Most of the times we can put a simple rule that its COGS + X%. But when there is huge order, there's negotiation always. So how do I model the pricing process so that I the firm runs even in my absence or my interference.
Any insights about the pricing process would be of great help to me.