Use this calculator to estimate pricing to Distributors, Wholesale, and Retail customers.
It is intended to give you a general starting point of where you should be to have healthy margins for your business. More in-depth analysis from a birds-eye view of your entire operation will give more insight on profitability and help you come up with a plan for durable success.
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About Margins
Percentages can be funny things and the difference between a markup and a margin should be noted. Markup is adding to your cost a certain percentage and a Margin is taking a percentage of the price your selling it at. Margins are more than markup, so don't sell yourself short. Toggle the setting back and forth to see the difference.
Distributor Price
Your selling price to distributors will be the first pricing tier for your products. Depending on what your product is and the general overhead of your operation, this margin can range from a low of 25% to a high of 50%, generally speaking. Use this feature to give you the low and high end of your price range to make sound decisions on where you should be.
Labor Cost
Calculating labor can be tricky. Only include the labor that actually goes towards making the product. One easy way to do this is to take your total production labor cost for a week and divide it by how many units were produced.
Packaging Cost
Total up everything that goes into packaging one unit here as well. Remember to include any label cost.
Ingredient Cost
Add up all ingredient costs that go into making one unit of your product.
