How To Create A Physical Product 101: Sourcing, Pricing, and Shipping | Little Might

Now you know how to find a supplier, and you need to figure out how to price your product. When we are beginning with physical products, pricing can be a little tricky due to all the individual costs involved.

The key to pricing for physical products is:

  • Knowing all your costs inc labor, packaging, production, shipping, fees, etc
  • What is the minimum unit quantity for order
  • Review competitor pricing for an overall view of what consumers will pay

When you get the cost per unit, you need to factor in shipping to the U.S. which can get pricey depending on quantity, weight, etc. Our freight shipping costs and trucking to our warehouse was over $10,000. However, this was for 25,000 units which worked out at only 40 cents extra per unit.

Raw cost per unit = Manufactured cost per unit + Shipping cost/# of units

Wholesale Pricing

Another important aspect to consider for pricing is if you’re planning on selling with external retailers you will need to ensure your margins can withstand the 40–50% standard wholesale discount pricing.

Think it’s steep discount? Consider the incurred cost of running a store, the rent, the maintenance, the staff. They need to make money off your products, or they are useless to them. Therefore, this discount is an average across the wholesale industry.

Bulk Pricing

Bulk pricing works a little different than wholesale while these customers will also order at quantity, they are not trying to make up their retail margins. Therefore, I don’t offer this same standard wholesale pricing.

For bulk pricing for BestSelf, we offer quantity price-breaks based on how many units they want to buy. Someone buying 100 of a product will get a better deal than someone buying 15.

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How To Create A Physical Product 101: Sourcing, Pricing, and Shipping | Little Might.