A: The profit margin on dog food is based on a number of factors, the most important of which being the quality of the raw meat, the moisture of the meat, and the cost of the feed used for the dog.
A typical profit margin for retail sale of dog food is 7% or 20-30%. But, for higher quality dogs it is 25%, 35%, and even 50% in the cases of raw and processed pet foods.
How is the price of pet food calculated and set by the company?
For higher quality ingredients like organic meat and eggs, and organic produce, the price must be higher, as the cost of ingredients is typically higher.
For other ingredients like grains, sugar or starch, the price is less important, and it should usually not exceed 15-30% of the retail price.
When does the price fluctuate based on the quality of ingredients?
The average price of a pet food can usually fluctuate up to 1-2% per year, depending on the quality of the ingredients – and most of the time it tends to fluctuate less than this.
The exact price is set by the manufacturer, a few percent above market price is accepted as being a healthy margin. The higher the level, the more they tend to insist, and the more they will pay a premium for a product, as this will attract a significant number of prospective buyers.
Does the profit margin vary depending on the number of pet breeds?
A major profit margin is usually established on the number of breeds, and it’s usually the case that the higher the number, the lower the price tends to be.
According to Nolo’s article on the profit margin for dog food:
“Every time you choose a specialty breed, such as a Chihuahua or a Beagle, you may get a premium price for the meat and meat products. And every time you choose a specialty breed, such as a Golden Retriever, you may get a discount price.
So the question is this: how much does the retail price of a dog food depend on the number of breeds?”
The Profit Margin on Pet Food (Updated 2017)
The following chart shows the profit margin for high-quality dog food that contains all the ingredients listed above, plus whatever other ingredients you choose to add to it.
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