Are you wondering how to calculate the selling price of a homemade product so that your business is profitable? In this article you will learn what expenses you should consider, the formula to calculate the price of your products and the step-by-step instructions to calculate costs with Excel. Plus, there is a bonus track !
One of the most challenging aspects for any entrepreneur just starting out is knowing how to calculate the selling price of a homemade product . So if you find yourself confused about the value of your work, you are in the right article.
When interacting with entrepreneurs on a regular basis, we see a common pattern in many. Not knowing how to calculate the costs of a product , they make the mistake of charging very little, so much so that their work does not allow them to make their project profitable.
And this is not just an aspect that interferes with the sustainability of your business.
Not knowing how to calculate the selling price number data of a homemade product , or doing it incorrectly, has a direct impact on people's perception of your brand. It also affects your ability to offer promotions and expand your business, to name a few aspects.
By the end of this article, you'll know how to calculate the selling price of a handmade product without underestimating your work and with the possibility of making a living from what you love. Get ready and take note!
What elements make up the sales price of a product?
To start doing the math, let's analyze which expenses you absolutely must take into account when determining how to price a product .
Materials
Whether you are making a craft or an edible product, to avoid financial losses, consider all the materials. And when we say “all,” we mean even those supplies that cost little money or that may not be relevant to you.
Labour
To determine how to calculate the selling price of a product , consider the hours of work. Especially yours.
Many entrepreneurs find it difficult to account for labor in order to monetize it, but in order to monetize your brand, you must consider this aspect carefully.
We know that entrepreneurs are multi-workers in their own businesses. Therefore, at this point it is key to include all the tasks you perform, whether administrative, logistics, manufacturing, marketing and customer service, to name just a few.
Learn more → What is product design and how is it done?
Bills
At this point, to figure out how to calculate the price of a handmade product , you need to consider all the expenses that your manufacturing requires.
We will now look at the most common ones in detail, but it should be noted that they are not exclusive, they can vary according to each business.