Calculate sales price
You know exactly what you want to make. But do you also know for what price you want to sell your product?
It is very smart to calculate the costs of making it before you start making a product. Otherwise it is difficult to calculate your profit.
There are many ways to determine your selling price. I use the method below which has always worked very well for me:
1. First of all, you must determine an hourly wage for yourself.
2. Estimate the number of hours you spend per one product.
3. Then calculate the costs of the purchase. Which materials do I need for wood (consumables such as screws and glue and the use of the machines will be left out of consideration for the moment).
4. If necessary, calculate a margin on top.
We are going to make a wooden stool.
1. In this example we say that you want to earn $30 per hour (we will leave the taxes out of consideration for the moment).
2. The number of hours it takes to make (in total) is 3 hours.
3. The purchase of the materials is $15, -
4. I want an extra margin of 30%
$30 (hourly wage) x 3 hours = $90
$90 - $15 (purchase costs) = $75
$75 + 30% = $97.50
A nice sales price would therefore be $97.50!
Once you've determined this amount, there is one more clever way to double or even increase your winnings tenfold!