Are you charging the right prices?
The amount of money that you charge for your products and services has a big effect on your business's cash flow. A competitive pricing model can help you maximize your cash in and maintain the health of your business. Use this pricing tool to explore your pricing model and see how changing your prices affects your profits.
Your production cost per unit is the total amount of money that it takes to create a single product. Find it by tallying up all material and labor costs for one item or deliverable.
Example: If you own a candle shop, your production cost per unit would be the total cost of things like the wax, wick, scent, container and labor per candle.
The portion of overhead is the dollar amount of overhead costs that each unit includes in its price. Find it by dividing your overhead costs, including the costs of managing and delivering your product or service, by the total number of units that you produce. You can use any unit of time that makes sense for your business, such as per month or per quarter, as long as you’re consistent.
Example: If a candle shop’s total overhead costs are $5,000 per month and they produce 500 candles per month, the portion of overhead is $10 per candle.
Use the slider to see how changing your markup affects your pricing and profits per item.