Myrna I Pierantoni
We will see how to set up the price for a product we will like to produce and sell on the internet. We will take into consideration that many aspects that we will deal with during ecommerce, keeping in consideration the ups and downs of the market and government fees and regulations.
The concept of pricing is one tricky subject. The idea is to produced, sell and makes a product to ensure a profit without increasing the price to the customer. Also the product should be easy to reach and distribute while keeping the cost down to our operation side and consumer.
Following the four-step process for setting a price on a product, we are going to produce and sell 2,000 custom-printed t shirts per month to be available for sell at our webpage. The basic cost for the raw materials (plain shirt, ink and preloaded designs) is $12.25 per shirt. Special order will be asses separately for pricing and will not be included in this forecast as they should be on case by case requests.
To calculate the price to sell the product on our web site we concluded that it will be 14.50 per shirt and customers paid their shipping charges. The decision on this price was based on the website cost of 50.00 month with ecommerce capabilities (basic ones only). This will help in keeping track of sales and trends on selling of the product.
My profit after selling your entire inventory per month based on 2000 pieces sold has been determined as follow: 12.25 +0.40 +0.25 =13.00 per shirt. In order to make a profit we will have to increase it to 1.50 per shirt. This will yield projected sales of 3000.00 per month.
This amount should not be consider the final profit, as I will present to you the breakdown of some overhead cost and operational cost. We will need to consider updating and upkeep of machinery, lower sales month, permits and...