Updated: Jun 18, 2020
Back on track! tonight I'll have a conversation with my Financial coach, usually I'm far to stubborn to get help from others, but you know there are more people on this world who went to the same thing as you and me. So I'm happy to share some basic info that you need to address before calculating your prices of your products.
So I calculated what I would like to earn every month. Obviously that could be answered very simply by what you think you want to get and need. But I calculated a bit further. If I would like to earn lets say €2500 a month ($2780) That means I also need to create that much of products, minus all the costs I have on them.
So 2500 divided by the days of the month you're actually working, so if you like to have 2 days off, you can't calculate 30/31 days.. to keep it simple I'll say I work 20 days a month.
2500/20= € 125 a day! ($140)
That means I need to make everyday stuff worth more than 125 euro to even be able to sell everyday to get a profit of 125..!
To give a short inside what you need to consider before you get to this profit:
Material costs (In my case clay, kiln costs, glaze)
Taxes (Depends on your country)
Packaging costs (Do you add bubblewrap/stickers/bag etc.)
Shipping costs (If you include this in your price, don't forget to calculate it!)
Platform costs (For example if you're selling on Etsy they also take a percentage, same counts for a store etc.)
So lets say you sell your product for €50 ($55,60)
materials : € 7,5 $ 8,34
Taxes 19% : € 9,5 $ 10,56
Packaging : € 2 $ 2,22
Shipping : € 10 $ 11,12
Platform 5% : € 2,5 $ 2,78
Total costs : € 31,5 $ 35,02
That leaves you with a profit of € 18,5 ! ($20,58)
To get back to the first point of making a €125 a day, basically means you need to sell this product 7 times in one day to actually get to that number, a.k.a. your salary!
And again, if you sell 7 products, you also need to restock, so basically need to make 7 items a day as well.
Obviously if you're making printable your shipping costs will be much lower, my shipping costs are actually a bit higher.. But the rest of the costs are a pretty basic reflection of what's happening with your money that you worked so hard for!
So financial business 1.0.1. This one was on the house! See you next time!