Thanks all! :-D Happy new year!
From
Dinky1409:
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so far you mentioned materials and
equipments. how about overheads? manpower? opportunity costs?
storage costs? work area? up to you to factor them in if you
realise these costs play a big factor in your production. if they
are not consistent, your prices will vary in the future if these
factors are not plan properly.
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Actually, since this is going to be a very small business (just
part-time, won't even register it as a real biz), manpower, work
area and storage costs won't be a problem, because I'll be working
in my bedroom. Actually, a 2 by 2 metre work area allocated in my
bedroom is enough. X-D
btw, what is opportunity cost?
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what about profit margin? any target
profit margin? or do you want to approach a different strategy by
benchmarking against the market rates and putting a lower price?
but will it cover your costs and target profit
margin?
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I'm trying to make S$5 - 6 out of each product. I already have a
day job so I'm not looking too much to make a real living from
this, but to supplement my income.
I've thought of benchmarking against the market and setting a lower
price, but then, their biz concept and marketing etc is different
from mine, so I rather not go that route.
My idea is to keep it affordable for people to buy in this economy,
and also sensible enough for me to make some $.
From Mk7:
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18 dollars. For something handmade,
it's low enough and good enough for
skills+misc+profit.
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are handmade stuff usually expensive?
From
Parn:
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When the product is new to the
consumers, it is always prudent to set the selling price of the
product according to what the consumers has
evaluated.
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So, if the customer see the product as S$3.99 stuff, then how?
X-D
From Bubbly:
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Product cost = ( Material cost +
Equipment cost + Transport cost + Workmanship cost/hr + 30~50%
profit)
Handmade items most of the time ppl sell it at 2 ~3 times it supply
cost.
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Ah, I think I can use the above formula to base my pricing on, just
that for the Equipment cost, I will probably not factor it 100% in.
Maybe like:
Product cost = (Material cost + 3% of Equipment cost....blah blah
blah)
If I factor the equipment cost 100% in, then if the equipment costs
$12,000, then ho-seh liao.
The final price will be insane. :-)
If I just factor in a tiny % of the equipment cost, then I can
recover it slowly, assuming I can sell the products.
From
Fatum:
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cos you can't set it at any less, but
the cost price per unit of something made in china similar to yours
would be considerably less than $10.67, so how you plan to compete
?
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I've thought about this before, but if I really have to compete
with the Chinese, then mostly it will be through branding. A single
"Made in Singapore" sentence printed on the product is enough to
beat out most of them. :-D
Anyone, cannot compete with Chinese on price, will 101% lose
out.
From eagle:
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I think in China, the cost price
would be like.... $10 for all 30?
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That's not surprising, but usually, that $10 is only if you order
5000 pieces in quantity or more. :-)
From
Bubbly:
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http://www.etsy.com/view_listing.php?ref=sr_list_8&listing_id=8608860
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Thanks, but the link isn't working. :-)
However, if the price of that clock is $29.90 (USD, I assume), then
it's really quite expensive.
Add in the shipping cost (especially International shipping) and
you're looking at US$40+ for this clock.
The advantage to setting a high price for a product, though, is
that it elevates the status of the product, because usually in
people's minds, it's :
very cheap product = imitation, shoddy work, outdated,
made-in-china, low quality, defects
very expensive product = premium quality, very rare, luxury item,
precious, made in USA / France / Japan, one-of-a-kind
that's how it goes. :-D
If most of the consumers really evaluate your clock at $3.99,
then take it as a kind feedback for you to improve the
accuracy/quality/finishing/workmanship of your clock to get obtain
a higher evaluation.
Cos ultimately, as the creator of your own products, you not
only want to fulfill your own standards but you also know that you
needed most to fulfill is the standards of your consumers who will
be paying and using your products.
Consumers' satisfaction is the highest honour that you can ever
bestowed upon your own products. And that's what determines between
a successful product against an overly advertised piece of
junk. 
