picture by Fabian Blank Photography
Pricing is always a touchy subject, especially when it comes to creatives. Creatives tend to be more attached to what they manufacture and as such have a very hard time seeing the big picture of things in the wholesale game (I know because I was there myself).
Simply, in order to win in the wholesale game, you need to sell lots of items priced as low as you can but still make money on them. So you do have work ahead of you.
And allow me to let you in on another little secret - there is no one size fits all magic formula. You need to figure out what works best for you and your company when you look at both the wholesale price and final retail price of items.
Our Simple, basic formula for wholesale pricing:
[2 x (product material cost)] + (artist/wood workers time) + 20% = wholesale price
product material cost - cost of all materials used to make product including yarn, thread, wood, retail box, tissue paper, branding stickers, upc code label stickers, etc.
your time - give yourself a set wage per hour (no less than minimum wage in the area that you live in). Take that set wage and divide it by the number of items you can make of any one item in a particular hour. That will give you your time per piece.
example: 9 piece Geo-block Set
materials for one set = $4.50
I can make and paint 3 sets of blocks in one hour. 1 hour of time is $15/hour (minimum wage in our area). $15 / 3 = $5.00 per block set.
[(2 x $4.50) + $5.00] + 20%
$9.00 + $5.00 + 20%
$14 + $2.8 = $16.80 wholesale price
$16.80 wholesale x 2 = $33.60 minimum retail price
(We then round up to meet psychological pricing marketing strategies)