As I am speaking to more and more of you budding Entreprenettes, I realize that understanding the true cost on your product(s) is a real problem for everyone as you really just don’t know exactly what to include……and therefore are underselling your products and loosing money and profits. I want to turn that around for you right now!
Some of you are probably asking yourself the following:
Ok, I want to get everyone on the same MONEY making page and make sure you are doing this correctly. So here are some ways you can investigate, add and properly price your products to make money and be PROFITABLE.
Now, you are going to add ALL these numbers up to get your ACTUAL cost of goods.
Ok, so let’s say the items costs $25. Now multiply that number by 2.5 to get the wholesale cost – this is the price that you will sell it to other STORES. They will then mark it up again and sell it to the end user. 25 x 2.5 = $62.50 = Your wholesale price.
If you are selling this item yourself on your website you have 2 options.
If you choose #2, then take your wholesale price of $62.50 and multiply that by 2.2 which is an average store mark up. So $62.50 x 2.2 = $137.50
So your retail price is going to be $137.50
The reason the cost is marked up 2.5 is to cover your overhead! This includes your sales reps commission, marketing (which some of you know I suggest spending 10% of your annual GROSS on marketing and not a penny more), reordering product, and your salary! If your product is coming out REALLY well priced and you feel you can sell it for more than 2.5 x cost then GO FOR IT! Make as much as you can girlfriend!
Well there is one quick fix – and some longer terms ones.
I hope this helps to keep you on track and to be PROFITABLE – we all want to make money doing what we love and are passionate about.
Want to express your opinion?
Leave a reply!
I’m already getting orders from the email with the updated pricing that I just sent to my current st…
Sarah Shaw is like Google, the entire How To section of Barnes and Nobles, Consumer Report and Yoda …
We enrolled in Sarah Shaw’s program because we needed someone to kick us into shape! She did just …
“I am a detailed person and hate when I buy something online and am not satisfied. It’s always hard …
“I came to Sarah with just the seed of an idea, a pile of sketches, and a bundle of nerves. I left w…
“In just one hour on the phone, Sarah gave me clarity in my pricing and bottom line… Our new product…
With Sarah’s help and guidance I was able to get my product into the hands of 5 hot TV set dressers …
“If you have dreamed of hitting it big, and your product has any kind of ‘it’ factor, as Sarah often…
“With just one little tweak of Sarah’s expertise, I amplified the results of this new launch by 60…
When I first started working with Sarah I had a garage full of my Bathroom Bagonia’s and didn’t know…
10 hours ago
4 days ago
1 week ago
I had the pleasure of speaking with Mae Karwowski, the founder and CEO of Obvious.ly, a leading global influencer-marketing agency and technology platform. Mae shares some amazing tips on working with influencers and how you can forge relationships to build your brand.
Want to learn more? Drop me a comment below.
#podcast #maekarwowski #obviously #sarahshawconsulting #entrepreneur #streetsmartMBA #pr #celebrities #business #fashion #celebs #celebrityaccess ... See MoreSee Less
Do you know how to set the right price for your product line? Lordy knows I sure didn’t when I first started my handbag line. But once I learned the correct way to do it, I never mispriced anything again! Now I want to share this method with you so you can be profitable and not wonder why you can’t pay yourself.
It took me years to figure out how to set the right price for my product line when I first started out, so I can imagine you might be in the same situation. If you are not sure if you are making any money, then there is a good chance you’re not pricing your products correctly.
Proper costing is the lifeline to your business and profitability. Taking into consideration and finding all the hidden costs, is the key. So many people forget little things that they add up and then BOOM, you are not making any money. Once you have the actual cost (cost of goods sold) then it is easy to figure out the wholesale and retail prices so you are always making money.
I’d love to share this formula with you. It totally saved my rear when I was in year 3….. Just thinking of all that lost money in the first 2 years…. I want to cry!
Drop me a comment with “PRICED FOR PROFIT” and I’ll reach out and connect with you. ... See MoreSee Less