How To Price Your Products To Avoid Losing Money
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- เผยแพร่เมื่อ 10 ก.ย. 2024
- Get the pricing calculator spreadsheet for free:
www.vanader.co...
My name is Evan, I own a crafting company called Scorch Marker and I coach people that sell products of their own so they can do what I did and make more money.
Grab my ecom checklist so you can see what I can help you with and what I teach:
docs.google.co...
If you want to chat, DM me on Instagram @vanadergrowth
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Hi at 3.06 in video $6,500 into a 1,000 bottles is not $0.65 I think u made a mistake? Its ever $650 into a 1,000 or $6,500 into 10,000
This shows he is only a content creator (actor) , not the actual business owner (who should not have time to waste on yt)..
lol. yeah that's part of his problem. he spent $6,500 on 1000 bottles which means they are $6.50 a piece, not $0.65 - whoops.
Clearly he misspoke. I believe he meant to say $650. But hey, I’m glad y’all are paying attention.
also noticed this
The video explains well and what is said really works, I have been using the same method for years for my products as well, but there are errors.
In the costs you are missing the advertising expense, in this case the margin that Amazon takes, and at that point you can calculate the profit.
At 7:50 you say you have a profit of 92.57%, but the calculation is wrong. 1 item in the first example cost $3.97, then 3 items of the second example costs $2.97, it's mathematically impossible. So I checked the table, the cost should be done on 3 products, not 1, because you are selling 3 at a time!
The calculation is as follows:
· Amazon cost per boundle = $39.99 total price * 35% Amazon margin = $14
· Boundle cost = $2.97 costs per item * 3 items + $14 Amazon cost = $22.91
· Margin = $22.91 bundle cost * 100 / $39.99 price = 57.29%
57.29% of margin, not 92.57% as in the video.
Boundles have at least these advantages:
1. Anticipate a portion of lifetime value. E.g., a customer might take 3 months to consume 3 products, if he buys 3 products right away the profit comes immediately at the beginning of the first month.
2. Reduce advertising cost because with a single sale you can split it over 3 products.
3. Accustom the customer to use the product more often, strengthening the brand.
4. Make the customer waste more product because they become less careful about saving it.
5. Prevent the customer from buying from competitors for a longer period of time.
6. It is more attractive to the customer because it actually saves money.
7. Reduces packaging time.
8. It reduces shipping costs.
9. You can use cheaper packaging because the customer already expects to see less care on it in exchange for the discount.
Decisions should then be made with a broader view. Of the following two, which would be best to sell?
A) 10 items with a margin of 80% and a profit of $9.03?
B) 10 bundles with a 57% margin and a profit of $17.08, which allows you to anticipate investment, strengthen the brand and reduce competition?
I prefer the second!
The advertising cost should then be calculated on lifetime value, not on the individual product. This is why the ads did not work. But this is yet another step.
Then, one must not forget that the final margins of all sales must be put together and subtracted from the overhead costs of running the business. You don't notice it in a family garage, but as soon as you rent a shed and hire your first staff you notice it right away. Only by doing this calculation can you know whether the business is making or losing money, because there may also be product lines that are losing but helping others make much more money.
In my small experience I have seen at least one company lose money in business costs while having very good margins, and many others decide to lose on some lines to sell more on others that are very profitable.
Spot on
Youre doing a good job, man! Keep it up and thank you!
Youre good. I like how you use yourself as the examples.
mistakes hurt the biz -but they help you as a business owner to learn ! (its a win in the long run)
Just found the channel, and subbed! This is a great breakdown of all this. I am looking forward to the rest of your content
love this pricing a product
thank you for this !!!
bro. The underlying market fundamentals of lifetime value of a customer outweigh whatever your cost per acquisition is. you lose money on 1 marker because you know, you'll sell that customer 10... unless you are churning and burning people
well there's your problem right there. you spent $6,500 for 1000 bottles and you think they cost $0.65 but they actually cost $6.50. whoops...
Holy shit. I thought businesses failed because it’s hard.
In reality people are just stupid.
Yes. But I can only speak for me
@@Vanader lol nice reply ;)
▶I am going to suggest to my Vocational Science of Freedom students that they should watch your videos to find the best information on how to start becoming self reliant faster and easier. Because, not knowing all your numbers from the start, is a guaranty of a doomed endeavor. 🔵Stay safe, Stay sovereign and keep writing your own American life script.
How do you say Im a parasite that spams on other businesses sites without saying Im a parasitic person?
Have you thought about teaching these things online
You were selling products that you didn't know how much they cost? Are you like 5?
You must be the 5 year old to not understand