priceHow much should your item cost?  Here’s how to figure that out.

1. First you’ll need to determine the total costs of one of your products.  You may have to add up ALL your costs and then divide by the number of products you are selling to get the cost for each individual item.

Fixed costs: utilities, salaries, advertising, insurance, interest, rent and depreciation

Variable costs: materials, labor—costs that are directly related to the volume of production

2. After that, you’ll need to determine your “markup.”  Markup is the amount added to the cost of an item to cover expenses and ensure a profit.

Cost + Markup = Price

That’s a good starting point!

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