This HOW TO is very simple. We get a lot of solicitations from companies who want to sell us their merch (toys and otherwise). So, here's a really simple pricing guide for producers:
Retail price should be 4x manufacturing cost.
That's it. Here's why:
When you produce your own products, you want to be able to turn a profit whether you sell your items at wholesale to a shop, or at retail direct to a collector.
So, take the total landed cost of your product, multiply by 2. That's your wholesale price. Multiply wholesale price by 2 to get your retail price.
We've been hit up recently by manufacturers who want to sell us products at "wholesale" where the price they are offering us is 80% of retail. Our margin would then be 20% minus all of our costs, which are numerous: domestic shipping, marketing, warehouse receiving, picking and packing, shipping boxes, postage. A 20% margin, for us, is really a 0% profit margin.
NOTE: This is just a rule of thumb, your own profit margin on manufactured products may be more or less.
NOTE 2: This doesn't really apply to handmade products, only to items produced in factories (IMHO). Some resin casters may be able to go by this rule, many won't. Customers definitely won't, since your costs to create an item are usually close to what you sell it for.
NOTE 3: If you can get more than 4x, good for you, cowboy. Minimum should be 4x.
Thoughts?
