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Price point

    • 5 posts
    February 8, 2009 4:31 AM EST
     
    Hi all. Being new to the entreprenueral world, I have a question regarding the price point of my product I have invented. From what I understand, after factoring the total cost of manufacturing the product, from start to finish, you then need to basically double that cost and use that as the price point, in order to make a viable profit, and also to make room for a reduction in that figure when selling to wholesalers/distributors. Am I in the right ballpark ? Thanks in advance !
    • 5 posts
    February 8, 2009 4:00 PM EST
    Thanks for the info guys ! The product is essentially one of a kind, in the sense that it radically improves upon an existing apparatus (in the fitness field), in a totally new configuration that will replace at least 8 other apparatuses in one, with functionality and practicality. It`s not going to change someone`s life ( like the Cialis Stan referenced), but it will save time, space and $$, and is the epitome of evolution of this apparatus, and people will want it ! I haven`t fine tuned it and whittled down the final production cost, as I just received the prototype, but I believe I can get around 3 times the cost for it. Anything over that may start to discourage potential buyers, but I`ll get a better idea when I test market it in a few gyms and get some feedback.
    • 434 posts
    February 8, 2009 11:51 AM EST
    Generally, 2X to 3X the manufacturing cost is a good starting point.  I do recall a software package a few years ago that did an email and blog blitz announcing the product.  They started with a price of $1 and added $1 every day until the volume dropped off.  They wound up at $14.95 and sold millions of copies.  There was a music group that recently sold their latest DVD online for "whatever you want to pay".  They had very few take it for free, and the average was about $9.  After selling several thousand download-only copies, with little or no overhead, they were happy and plan to do it again.


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