WHOLESALE for HANDMADE - Figuring Your Wholesale Price - Part II

So, we were talking about wholesale prices and how to come up with a good price for your lovely handcrafted merchandise.

You've still got that number we came up with, right?  Yep: $5.32  - which we discovered is the total amount of cost (for everything) involved for you to produce your pearl button cufflinks. 

So now that we've completed step 1 and found out our total costs for the pearl button cufflinks, now we need to completed step 2 and step 3, which are, respectively:  figuring out how much you want to put back into your business, and figuring out how much profit you want to plan for down the road.


From here, I'm going to tell you what I do, meaning : I'm going to give you my OPINION.  I'm sure there are lots of other successful business owners who have a different one.  You really need to find out what works best for you.  But the formula I'm giving you here has worked well for me, and so I stuck with it.

Here is my own recipe (ie: feel free to tweak this as you need to for your own goods and/or services) -

 - multiply my total production cost by 3 -

so :  $5.32 x 3 = $15.96

$15.96 becomes my total wholesale price per unit for my pearl button cufflinks. 

WHY THREE?

The first third, the $5.32, recovers my initial cost for producing one unit.  The second $5.32 I put back for myself.  Yes, for MYSELF.  And the third and final portion of this price goes back into my business to help me keep momentum and so that I can have a little saved back for any unforseen costs down the road. 

I already know what you're going to ask:

But didn't I already figure my own wage into the intial $5.32?

Yes, you did.  But this matrix allows you to double your own salary.  And who DOESN'T want to earn a little more money? 

A caveat:  I realize that this pricing guide may not be as clear for those of you who already have established retail prices and are looking now to find a way to set up wholesale pricing because you're starting to try to attract more business (as by now you've probably realized that you need to have multiple streams of income like I mentioned in an earlier post).   Please stick with me here.  I'm going to address your concerns a few posts from now. 

Does anyone else have any good suggestions for how they might configure their wholesale prices?