Question Details
I've went to Walmart & Target to price their natural laundry detergent, looked at ounces and price. This is my challenge for handcrafted natural products are usually priced higher then products that are on the store shelves. I want to be competitive and I also want to be compensated for my labor it took to make my products. I know I have to incorporate packaging. Thank you in advance for your help.

Answers
Hi Jill, I'd like to know a little more about your products. Why did you create them? What makes your product different than other natural products? What's your ultimate goal as far as volume and distribution? How does your product compare as far as pricing per ounce against what you see in the big box stores? How are you planning to market the products? I'd love to help, just reach out. :) Posted on 03/01/19
March 1, 2019
Forecast sales goals and the parallel expenses necessary to achieve those goals plus a reasonable profit. Those factors dramatically affect your pricing. Think of a one year forecast roughly laid out with your anticipated market revenue, the expenses to achieve that revenue. At some point you must begin looking at your enterprise from an analytical, arithmetic perspective to make good business judgments. Hop onto a spreadsheet, put a calendar by month by year across the top and down the left side startup costs, expenses and a subtotal. Fill in the cost and expenses by month; then add profit, subtotal, and unit price calculations lines below the expenses to begin rough order of magnitude pricing as an end product plan for your products. This detail should be refined as you get more information such as quotes, actual costs, your time and expenses and the like. Compare the results above to what you see your competition charging for like product. Then work the issues. That work may be to reduce expenses. It may be to emphasize the quality for the price in your marketing approach. Most people associate high prices with high quality and extra service, while they associate low prices with low or average quality and minimum service. Make sure you provide extra quality and service if your prices are higher than your competition Posted on 03/01/19
March 1, 2019
Companies go through complicated analysis to derive the retail price. But here is a simple method maybe will help you to get on the right path: - To be profitable on retail product, as rule of thumb the cost needs to be less than 1/3 of the price. - Since you know your cost, with 3x of the cost as retail price, will your targeted-customer buy it? - If it's too high, then you need to work on your unique benefit to justify the higher price, or work on lower your cost. - Remember retail price is not the same as wholesale price. Hope this helps Dana Posted on 03/01/19
March 1, 2019
Since you are starting out at local farmers markets and not in major retail can you do any reconnaissance on pricing of other similar business' that are either e-commerce or direct to consumer? As you scale ideally your costs would be able to come down giving you more room for profit or to put back into the business. You really need to get your messaging down if your product is going to be more expensive than similar products-- not just why is your product better than non-natural detergent, but why your specific natural detergent is better than competitors. This can be accomplished in getting your elevator speech down really well before you start selling but also should be considered in the packaging/design/marketing of the product. Happy to chat with you more to discuss! Posted on 03/06/19
March 6, 2019
Hi Jill. Most of the answers here are correct and have value. But to put it simple, your price is always connected with your cost + margin. And it's just a math problem that you have to follow. Don't look at market prices to define your prices without understand how much it costs you first. Think like a manager not like a consumer: - How much it costs you to produce your product (materials, machines, electricity, etc) - How much time it takes you to make X of your product. Give a price to that time (another formula). - Add a margin to that. 10% ? 20%? 30%? Now you have the fair price for you. It's time to look at the market and see how is your product price positioned regarding others. Too high ? It's time to reverse engineer and see where you can low your costs: Material ? Time to produce? Your Margin ? Remember, you can always target your product to specific audience niches too, instead of general public. People that are willing to pay more for features that your product may have that others don't. But then you also have to consider Marketing costs :). Overall, don't sell yourself short because of what you see in Wallmart. If you define your price by competitors price, but your costs are higher, you may find yourself in trouble very soon. And then don't understand why are you selling so much, but still can't pay the bills :). Hope it helps ;). Have a great week. Posted on 03/13/19
March 13, 2019