Determining the price of your product

1 / 10

# Determining the price of your product - PowerPoint PPT Presentation

Determining the price of your product. Brainstorm…. A list of all factors you think a company would need to consider when pricing a new product. Key Factors to Consider. Materials Labor Expenses Profit. A Simple Formula. Materials + Labor + Expenses + Profit = Wholesale x 2 = Price.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

## PowerPoint Slideshow about ' Determining the price of your product' - velma

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

### Determining the price of your product

Brainstorm…

A list of all factors you think a company would need to consider when pricing a new product.

Key Factors to Consider
• Materials
• Labor
• Expenses
• Profit

A Simple Formula

Materials + Labor + Expenses+ Profit = Wholesale x 2 = Price

Materials
• Make a list of all the material fees you anticipate you will encounter
• Don’t forget the smallest things like thread, to the largest such as packaging!
• If you need to “guesstimate” err on the side of caution
Labor
• Consider all labor costs that will go into making this product
• Often forgotten: marketing department, maintenance staff, accountants
• Research average salaries of employees in your area of production
Expenses
• What additional cost(s) will it take to produce this?
• Expenses to consider: rent, travel, office supplies, research materials, marketing materials (advertisements, website domain)
• Steps:
• Write down all additional costs per month
• Decide how many items you want to sell per month
• Divide cost by number of items sold
Profit
• Think about where you want your company to be in the future
• Will this be your only source of income? Will you have more than just one product?
• Good rule of thumb:10% of Materials, Labor and Expenses
Wholesale Price

Materials + Labor + Expenses + Profit = Wholesale Price

Why Not Stop There?

• This may seem like a very affordable price for your product, but…
• Selling your product at wholesale price undervalues those selling at proper retail price- when the majority of sellers price thoughtfully, everyone benefits
• Customers will wonder why it’s so low. Are the materials not as good quality? Etc…
Selling Price

Wholesale price x 2 = Selling Price

• How does your price compare to similar products?
• If the item is priced too high for the market, it’s not the price you need to alter, it’s the design or way you produce the work