A product can sell often and still leave too little money for the work behind it. Before choosing a price, write down what one item costs to make and sell. The figures below are headings for your own cost sheet; they are not a recommended price or margin.
Count more than the materials
- Materials or ingredients used for one saleable item.
- Packaging, labels and any protective material.
- The time spent making, finishing, packing and preparing the order.
- Delivery, market fees or payment charges linked to the sale.
- A fair share of recurring costs such as tools, rent, electricity or internet.
If a batch makes ten items, divide shared costs by the number of items that passed quality checks and can be sold. Do not divide by the number you hoped to make. Keep a note of waste and rejected pieces; those costs are part of the process, even when you cannot charge a customer for them.
Check the price against the way you sell
A direct sale, a market stall, a shop and an online order can have different costs. If a retailer expects a wholesale price, work out whether that price covers your cost and leaves enough to pay yourself. Compare similar products for context, but do not copy another seller’s price without knowing their costs or sales volume.
Use actual orders to improve the estimate
After a few sales, compare the estimate with what you spent and how long the work took. Update the sheet when supplier prices, packaging or delivery costs change. The MRA’s tax guidance can help you check the record keeping and tax questions that apply to your business; ask a qualified adviser about your own circumstances.
Fam Antreprenan can help turn receipts and sales into a clearer view of costs. If you share a product example, use your own figures and get permission before including the story or numbers in public material.