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For those who own a business with product sales

I am a writer, and also a photographer. I am in the process of putting my photos on my website to sell. I'm planning to sell them as various products: prints, mousepads, coffee mugs, calendars, etc. I know that when I set my price, I need to include the cost of manufacture and cost of shipping to determine how much it is costing me, and then set my price. But my dilemma is: how do I figure out what to set the price at? Once you get the base cost of how much you pay to produce it, how do you determine how much to raise it so that you make a profit yet don't price yourself out of the sale?

Any suggestions on how I should do this?

Answer Question
 
wendythewriter

Asked by wendythewriter at 12:08 PM on Sep. 23, 2012 in Money & Work

Level 33 (59,678 Credits)
Answers (4)
  •    Gross Margin http://en.wikipedia.org/wiki/Gross_Margin 
    Selling Price, Gross Margin & Mark-Up Determination              http://cpa.utk.edu/pdffiles/adc12.pdf

    mto3821

    Answer by mto3821 at 12:28 PM on Sep. 23, 2012

  • My husband says that his average gross margin is 32%.
    slw123

    Answer by slw123 at 2:20 PM on Sep. 23, 2012

  • If you have any other costs besides the production costs, you need to associate those costs with each item as well. For example, the software you use, the equipment you use etc. Make a list of ALL your expenses for the year besides the production costs and then divide that by how many items you expect to sell in the year. That would be your total cost. Then if you want to pay yourself add a bit more. There ends up being more costs than you expect once you really look into it.
    AngZacc

    Answer by AngZacc at 3:17 PM on Sep. 23, 2012

  • factor in
    -how much it costs you to buy or make including tax/credit card machine charge
    -how much it costs to have it shipped to you
    -how much it costs to pay for a clients credit card to be charged if they buy it from you (using Square for example its 2.75% per swipe)
    -how much it costs to ship it to your client
    -how much gas or other overhead

    then determine how much profit is reasonable for you. for example, if you spent one hour with a client, will 5 dollars back in profit be enough for you? not for me, so id be sure to get at least 20 bucks an hour i spend with a client

    does that make sense?
    lizzybee44

    Answer by lizzybee44 at 3:39 PM on Sep. 23, 2012

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