First measure your
product, including waste. If your diaper is 21 inches long
and 6 inches in the middle but you waste 12 inches in the
process of cutting 6 in crotch then add the 12, whatever
fabric you use.
Take all
of the square inch measurements of your raw materials and
multiply it by the cost per square inch of raw material. To
figure out your square inch cost take the total per price
per yard say $4.00 and divide it by your total square inches
per yard which will be likely 36x60 if you are using 60 inch
fabric, 36x45 if 45 inch fabric !!!!
Don't
forget to add in the cost of elastic, snaps, velrco and
whatever other raw material you use in the construction of
your product. the formula is still the same. Except in
linear products like elastic and velcro which will be just
the cost divided by the length.
After you
have that base cost double it. This will give you your
wholesale cost. After you have your wholesale cost, double
it again...this is your retail price.
Now you
are probably saying you are nuts, I can't charge $25.00 per
diaper. You are right, you can't. So that is where you
decide do I go 50%, 45%, 40%, 35% etc. But try to use the
same formula that way you know that you charge a 40% mark up
for your wholesale and 40% for retail.
You may
have to fudge the numbers a bit, just depending on the
market and what you want to charge and how much you want to
make.
I think
too many work at home moms just forget about cost of
materials and cost of THEIR TIME and just charge market
value and wind up making NO money and not even knowing it.
Tereson Thomas - Fuzzi Bunz Diapers - Inventor
Reprinted with permission
