How to calculate the price of your products. Simple and excel gift
What I want to explain in this article is how to calculate the cost of your products using a simple Excel table. As the above table still gives some design problems to download it, I will teach through several screen captures of my computer, as I have designed, to put in each box, and that formula use .. So, besides downloading also you learn to create your own tables.
It is not to fish but to teach how to fish, no? :))
As the post is dense, you need to concentrate all ... lol. So I also put me serious, right?
Go for it.
The first thing to consider is that our product has several different combined costs, through ignorance, we tend not add up. That is, we not consider. These external elements surrounding the product itself, we have the packaging that we talked about, shipping, margins for shops, own benefits, taxes ... And all this must be reflected in the final price because businesses only survive if they are profitable, and if you are betting on your dream, it's worth making the effort and do well.
You must have calculated previously as the material that you have used to create your piece will cost. No matter if you work with fabrics, cosmetics, precious metals, food products ... Almost everything has a cost of physical material and therefore must be calculated. How? Well, as we showed in the wonderful Excel spreadsheet. But there are jobs that can not be calculated for the material and it is solely invested time. I mean all the work of graphic design, illustration and the like ... We understand it? For these cases, you just have to use the box € / hour.
Here, whether your product is physical or not, you must calculate spent.
** Disclaimer: For those that our products are physical, such as purse example, the number of hours should be limited. Really, that we believe have a price proportioned toooooodas can not count the hours we put him, sorry but it is. **
At least one hour to an average of 6-8 € for physical products, bearing in mind that a 'what-is' can be done in 20'-30'-40' if? I tell you because then not tell the whole time, only the actual time spent.Transport import and Taxes
If the material that you work comes from abroad, you have to count the cost of transport.
To do always use the same formula -> divides the number of products in the box between the amount of transport.
If, in addition, this material comes from outside the EU you will have to add the cost of tariffs and taxes.
In my case for example is 6% tariff rate + 21% VAT, ie, I have to add 27% more.The formula used is: = X + (X * 0.27)
X equals the cost of the material
If instead purchases in Spain but you do online, keep in mind you'll have to account for this shipment. Dividing the cost between the amount of material received. And if you're of which does neither one thing nor the other, but you take the subway and go downtown to find your material ... because it has what you get the transport used to get there. Bus, metro .. whatever comes at a price. packaging:
If you do not yet have packaging or do not know because you have to calculate it ... Look at our post on the subject here. It is simply add the cost.
It seems not, but every time you send something ... It costs money. If you try only shops or large quantities, shipments will become cheaper because the shipping cost is shared between all the products you send. If, however, you send spare parts .. For sending you is more expensive. (Soon I will explain the different types and shipping costs there) Anyway, you have to add it.
Margin for shops
If you are selling your products through a store, you should be aware that these people do not work for the love and logically, they will charge a small fee for selling your creations. The magic number usually moves about 30%, but this cost must add before introducing your products, not after. No it is not serious or professional.The formula we use is = X + (X * 0.3)
Here we come to a sticking point, because some people do not value enough about their work and no one to overestimates, so I'm not going to say how valuable your work, but if I say that the product that you elaborate (which already you have added all expenses) must be worth at least twice. That is, part of multiplying x2, from then on, it depends on you.
For this column shows you the final price of your product.
If you do not sell in stores, no matter, you've to add that margin also, in case later if you do, so you'll save having to change prices. Also, if a store would be interested in your products, this is the best way you know what is the margin that can offer them and not get caught in plan, Oh my God, and how much they charge me .. !!
Well this is where you really see what you have earned by the sweat of your brow.
After adding up expenses and costs and margins ... when a product is sold, which appears in this box it is what you carry in your pocket.
And dear superyuppie in principle this is all essential to get the price of your handmade products information, but as a picture is worth a thousand words ... I put again the image of the table, but this time in duplicate. In the first you can see how much it would cost to make a purse hypothetical and a cloth bag (I invention costs but going out there ..) with visible formulas that would go in each box, and mini explanations, and the second equal but with a real example, the cost of two of my jewelry (you can see them here)