As the title says, how do I properly price a product which I eventually want to sell online.
Cost:
VAT
Production
Packaging
Shipping / 3PL
Marketing / ad spend
Payment / platform costs
Also how do I decide how much of the profits after the VAT I should spend on marketing. For example should this be 10, 20 or even over 30%?
My competitors are in the price range of 35-45 per unit.
I am aiming for a 10-25% profit margin.
Posted by ZeraPain
2 Comments
How much you spend on marketing is entirely dependent on your strategy. I spend 0 on marketing and use what I would use for travel costs and events. Your strategy could be aggressive marketing to build a foundation, which is higher costs, or maybe slow burn to keep costs down. All up to you really.
It also depends on how much your COGS is compared to your competitors. 45 per unit will have different margins to your competitors when compared to your own COGS and your overhead
It depends a bit how you want to / can price!
You can do Cost + marketing spend + margin = Price. If that is below the 35-45 per unit of your competitors you can go either below them or even increase your price. If you’re above them, try to differentiate your product to show the additional value.