Pricing

[Eshields1014]

Hello, Maybe someone can explain this to me as simple as possible.

I am starting a Dog Treat Business, and I am having the worlds hardest time figuring out pricing. Here is what I have done so far and I want to know the easiest way for me to do this.

We usedeverything from....
milk, butter. wheat flower. white flower, corn meal, powdered milk, eggs, oatmeal, brown sugar, vinilla, carrots

This was to make a total of 3 different kinds of treats

one double batch made 42 we did it again another double batch and it made another 42 which is a total of 84 treats out of a total of 4 batchs

We made another kind of treat(dont have the paper) i believe it made a total of 119 treats 2 double batchs

Can we figure out pricing with this information?

Oh and the bags that we are going to order are 25.41 including shipping

Our labels are prolly about 10.00 you get about 200 total

I am horrible at this and need as much help as i can get. Math isnt my strong point or understanding it.

[robert]

Need a little more information:

• How much did all the ingredients cost?
• How many bags do you get for $25.41?
• How many treats will go in each bag?

Just for clarification:
from one purchase of all those ingredients, you made a total of 203 treats? (84+119)

[Eshields1014]

Originally Posted by robert

Need a little more information:

• How much did all the ingredients cost?
• How many bags do you get for $25.41?
• How many treats will go in each bag?

Just for clarification:
from one purchase of all those ingredients, you made a total of 203 treats? (84+119)

oh I guess I forgot to finish, ha 100 bags for that price. all the ingredients were around $20.00. The bag is a one lb bag so it could hold up to 1lb of treats depending on size, which that will vary. No I didnt just make 203 treats that is just some of what i have made. I have made more than that but i dont have those numbers with me. I was just giving what I had with me right now.

[robert]

its impossible to be accurate without all the information.

information still needed:

• how many treats go in each bag. Since you are determining this by weight apparently, the weight of each treat is also needed. And how much weight do you want to put in a bag?
• total amount of treats able to be made with said ingredients. Determining pricing with only partial figures will cause the numbers to be wrong.

[robert]

This is the basic formula. It probably will need to be adjusted slightly once you get all of the real figures.

Cost of ingredients / total treats made = cost per treat

Cost of labels / number of labels = cost per label

Cost of bags / number of bags = cost per empty bag

Cost per empty bag + cost per label + (cost per treat x amount of treats per bag) = cost of loaded bag

Since you are manufacturing the treats yourself, I would suggest AT LEAST 300% markup on treats:

Cost of loaded bag x 4 = selling price


BUT this is all can be adjusted depending on the real numbers. You might want to increase it by more than 300% if the dollar figures are small, or less if the dollar figures are big. You also need to take competitors prices into consideration.

[Eshields1014]

I dont want to do price by pound. I dont know how many I am putting in each bag untill I find out prices for example 10 for $5.00....I have looked at my comp. prices. also my idea was to say 10 for $5.00 and if they are the smaller treats of course you are not going to say 50 treats for 2.00 you would say lb so i would weight the 5 treats and the 50 treats so they would be the same price because they would weigh the same. I just dont want to list my prices by weight, but that may change. I just know that the bag says 1lb bag

So what you are saying is to use all of the ingredients untill one of them runs out and from there stop and see how many treats you made, then? go where from there.

See I was hoping with some information of what i have made so far I could figure it out.

[robert]

Originally Posted by Eshields1014

I dont want to do price by pound. I dont know how many I am putting in each bag untill I find out prices for example 10 for $5.00....I have looked at my comp. prices. also my idea was to say 10 for $5.00 and if they are the smaller treats of course you are not going to say 50 treats for 2.00 you would say lb so i would weight the 5 treats and the 50 treats so they would be the same price because they would weigh the same. I just dont want to list my prices by weight, but that may change. I just know that the bag says 1lb bag

So what you are saying is to use all of the ingredients untill one of them runs out and from there stop and see how many treats you made, then? go where from there.

See I was hoping with some information of what i have made so far I could figure it out.

You went from saying that you don't want to price per pound to explaining how you were going to price the small ones per weight......that doesn't make any sense.

That formula isn't set up for weight. Its set up for X amount of treats per bag (as you can see if you read the formula).

You can use only the figures you have now, but it won't be as accurate as it could be. Its up to you. Its not going to make that big of a difference though. And whatever the difference is, it should be in your favor.

[robert]

Originally Posted by robert

Cost of ingredients / total treats made = cost per treat

Cost of labels / number of labels = cost per label

Cost of bags / number of bags = cost per empty bag

Cost per empty bag + cost per label + (cost per treat x amount of treats per bag) = cost of loaded bag

Since you are manufacturing the treats yourself, I would suggest AT LEAST 300% markup on treats:

Cost of loaded bag x 4 = selling price

$20 / 219 = $0.19 per treat (average of small and big)

$10 / 200 = $0.05 (per label)

$25.41 / 100 = $0.26 (per empty bag)

$0.26 + $0.05 + ($0.19 x 10 big treats per bag) = $2.21 cost of bag of 10 large treats

$2.21 x 4 = 8.84 selling price.

Raise the selling price to $8.99 (price points with 99 or 95 are best for online orders. At bazaars you might prices ending in 25, 50, 75, or 00)

So with those numbers you would be making over $6 per bag of large treats. Is that enough?

Do you see how this is working? You can use these numbers if you want, they aren't perfectly accurate though. But it gives you a rough idea.

[Eshields1014]

Originally Posted by robert

You went from saying that you don't want to price per pound to explaining how you were going to price the small ones per weight......that doesn't make any sense.

That formula isn't set up for weight. Its set up for X amount of treats per bag (as you can see if you read the formula).

You can use only the figures you have now, but it won't be as accurate as it could be. Its up to you. Its not going to make that big of a difference though. And whatever the difference is, it should be in your favor.

oh that is just what i wanted to hear that it would be in my favor lol. thanks. So was i right though....to make all the treats i can untill atleast one of the ingredients or more runs our and see how far i got with all brand new ingredients and price from there once i have a total.

by it working in my favor is that because they are small treats and i can charge more using that as my pricing for the larger ones?

[robert]

Originally Posted by Eshields1014

oh that is just what i wanted to hear that it would be in my favor lol. thanks. So was i right though....to make all the treats i can untill atleast one of the ingredients or more runs our and see how far i got with all brand new ingredients and price from there once i have a total.

by it working in my favor is that because they are small treats and i can charge more using that as my pricing for the larger ones?

yes you are right, it would be more accurate if you knew the total amount of treats you can make from ALL the ingredients.

It being in your favor had nothing to do with the type of treat. It has to do with the numbers you use. If you use the numbers you have right now, you would be over-shooting the pricing and pricing it higher than what you actually need to. So you would technically have a higher profit margin without knowing about it. Thats what I meant.