How do I make a profit?

Felicia Daniels Asked: How do I make a profit?

I am going to make homemade products: cat and dog items (collars, bowls, toys, etc), candles, perfume, shampoo/conditioner/body wash, paper mache and clay statues, stained glass, woodworking products and others. How do I make a profit and break even? I will be selling at our local flea market, online (amazon, ebay, etc) and hopefully I will be able to lease part of the parking lot at our city's Walmart and Dollar General. Also, I would love to sell my products through a boutique. How do I do that?

And, for example, if it takes $5 to make one of my products, what would be a good selling price? Let's say it's one of the perfumes.

Thanks and any other advice is appreciated!


just me Answered:
I say double or nothing, its fair, and homemade products are worth paying more for, because of your time,and the cost of materials.I think most people expect to pay more for homemade items,because of the personal time invovled , and the uniqueness of the products.

Kasey C Answered:
"Buy low, sell high".

You'll need to come up with your own price based on amount of material, labor, and overhead. You also have to calculate how much can you sell (potential market, and please be PESSIMISTIC, at least at first), and plan for spending a lot of time and effort for NOTHING to happen (no sales initially).

I know in restaurant biz, figure each plate is 25% material, 25% labor, 25% overhead, and 25% profit. (Actually, I think that came from Gordon Ramsay)When you say "$5 to make", do you mean material only, or did you include labor and overhead in that already?

Kasey C, PC guru since Apple II days
Give me ambiguity or give me something else.

scoosh Answered:
Cash is king in any business, so don't sell yourself short.

The biggest mistake that small businesses make is that they don't charge enough or have not figured in all their costs.

I notice that you are doing, what I would call 'cost plus pricing' that is taking your costs and adding a margin.As much as that is an intuitive way to go, you should also look at what I would call 'market pricing' – that is what do you want to sell the product for.

If you have your own brand, then you are unique, that is, not a commodity where potential customers can compare prices.Many companies especially perfumes, sell their products at huge markups, if they feel the market will sustain it.

Many products are perceived as being of value because of their high price so don't be scared to charge.

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