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Custom Product Pricing? How do you calculate it?

by mrdeflation
5 replies
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Looking for your opinion here as I have heard so many different reasons on pricing a product my head is spinning.

Let's say you begin manufacturing and selling your proprietary custom red widgets.

Your cost is $6 widget out the door and ready to go from your warehouse.

SO.... what are you selling them for retail and why?

Sure you can play around with pricing down the road to see if it nets you more sales, profit, LTV, etc but...

what are you initially pricing your product at?
#calculate #custom #pricing #product
  • Profile picture of the author AnthonyCapetola
    You could just Google this question: http://www.inc.com/guides/price-your-products.html

    In the end this is based on margin. What you need to make to not only pay for the product plus shipping/handling but also what profit margin you are willing to work with.

    Also consider your advertising/marketing costs. Where are you going to list these products? How are you going to promote them? What restrictions are you going to face (budget, time, management)?
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  • Profile picture of the author sweetcrabhoney18
    Margins are a factor. Don't forget to factor all elements of making that product then overhead of the "just in case" It also depends on rarity of that product and it's demand. There are textbooks written about pricing so it's not something that can be answered on a forum sadly. Spend time doing the numbers and don't be afraid to have a high price. If your customer /target market is willing to pay it then price it that way

    Best of luck!
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    keep moving forward

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  • Profile picture of the author serpyre
    Simple answer - manufacturing price * 2 to distributor * 2 to retailer - more parties and they double at each step so a manufacturing price can end being 10-20% of the retail price. Some end retailers markup 200-300% - depends on industry, retailer exposure, etc.
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  • Profile picture of the author AnamikaSharma
    Originally Posted by mrdeflation View Post

    Looking for your opinion here as I have heard so many different reasons on pricing a product my head is spinning.

    Let's say you begin manufacturing and selling your proprietary custom red widgets.

    Your cost is $6 widget out the door and ready to go from your warehouse.

    SO.... what are you selling them for retail and why?

    Sure you can play around with pricing down the road to see if it nets you more sales, profit, LTV, etc but...

    what are you initially pricing your product at?
    I price very low when I launch a new product in my shop.
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  • Profile picture of the author repricerexpress
    Pricing strategy could be based on some of these factors: costs, what competitors are charging, what price people are prepared to pay and market demand for your product.
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