NogginBoink wrote:I'm sure there's a wide range in which possibilities exist, but as a first-run estimate of the feasibility of commercializing a product, what figures would you suggest I use?
lyndon wrote:The answer to retail cost is "whatever the customer is willing to pay." It's a much harder answer to figure out, but it's how real money is made. If the customer will happily pay $200 for something that costs $10 to build, then that's what you charge, not $50.
philba wrote:As to what to charge. There is no science here. You do need to add up all the costs: bom, manufacturing, packaging, distribution, design, support, returns and marketing overhead to decide what net margin you are willing to accept. There is no substitute for a business plan with a spreadsheet that factors all those things in. You play the what-if game to see where your risks are. What if I have 5% returns? 10% What if cost of sales is higher than I think. What if I have to give points for distribution? What if my components stop being produced and I need to redesign? I would never try to create and sell something that I couldn't get at least 10% net margins on with conservative assumptions.
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