2. Factors to consider in how can you price your products
The following are the key factors that should be considered while decking the pricing of the products.
Variable Cost (per product)
Most importantly, you want to recognize all expenses getting in the production of every item. You will have to find how much each unit cost for you and what will be your total cost for the product.
Perform an analysis of the raw materials that you use in production. You can calculate the cost of your raw materials, all expenses, packaging cost. Then you will get an idea of the rate of your product that can be sold per item.
Hence, remember the effort, and the time you gave to your business. To value your time, set an hourly rate you need to obtain from your business, and afterward separate that by what number of items you can make in that time.
Here’s a pattern listing of prices for every product
|Cost of products sold
|Cost of Packaging
|Total per-product cost
In this model, your complete per-item cost is $15.50. Using this process you can fix the variable rate for each product.