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From Idea To Amazon: Step 3 - Consider Pricing

From Idea To Amazon: Step 3 - Consider Pricing

Posted by Simon Lyons on 2nd Jul 2018

 

Ever wondered how to bring that product idea scribbled on a napkin in last night's bar into a reality? We come all come up with revolutionary ideas that simply don't make it to market because of the many, many hurdles you need to overcome to actually get it out there.

So, I've written a helpful guide to get your idea from that concept you thought of in the shower to a product that you can sell on Amazon. Missed the first step? Head on over to Step 1 before you go any further.

 

 

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3. Consider Pricing

I’ve included this info early on, but in reality pricing is something you need to have at the back of your mind for the entire product development and manufacturing process. Ask yourself the following:

  1. What is a reasonable price to sell your product for?
  2. How much margin do you need to be profitable if you’re selling direct to the customer, or selling via a 3rd party?
  3. What does this mean your maximum cost of production is?

I’ve included this info early on, but in reality pricing is something you need to have at the back of your mind for the entire product development and manufacturing process. Ask yourself the following:

As a (very rough) rule of thumb, if you’re selling to retailers, your product should be produced for 1/10th to 1/5th of the final sale price. It can be more like 1/3–1/2 if selling direct to the customer. Be sure to research further though to get a more accurate picture of profit margins in your sector.

This was a short section but an important one! For example, if you have an idea for a product you think would sell well at £10/$15, but realize it’s going to cost at least three times that to make, then your idea is dead in the water before you’ve even begun! For this reason and many others, please keep pricing and production costs as the forefront of your mind moving forwards.

 


 

That's all for now, but tune in next week for Step 4! Any questions? Let us know in the comments.