Pricing a Product

The following structure should help in deciding what to price your product.
1 min read
Opinions expressed by Entrepreneur contributors are their own.

To price products, you must become completely familiar with pricing structures, including the difference between margin and markup. Every product should be priced to cover its production or wholesale cost, freight charges, a proportionate share of overhead (fixed and variable operating expenses), and a reasonable profit. Such factors as high overhead, unpredictable insurance rates, shrinkage (theft, shippers' mistakes), seasonality, shifts in wholesale or raw material product costs, freight expenses, and sales or discounts will all affect the final pricing.

Excerpted from Starting a Home-based Business

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.