4. Tips How To Price Your Products For Your Shopify Store #12
4. Product Prices & Cost Per Item In Shopify
Add the price of your product and the cost of your product in this section.
This is probably the most important part of your business. If you don’t price your products correctly you could be losing money without even realizing it.
Your product pricing should include all your fixed costs (monthly costs) and variable cost (cost per product).
Quick Lesson About Prices, Costs, and Profits
Here is a quick example of what you should be thinking about:
These are expenditures you have every month eg. Shopify store, hosting, rent, electricity, equipment rentals, software, marketing, etc.
Costs for each product which is different for each product you sell. These might include shipping, labor, materials, packaging, etc.
The next fees are also part of your Variable Costs for your products.
The merchant fees you pay for selling your products.
The salespeople help you sell your products.
A little BONUS - I have added a link to a Breakeven Analysis spreadsheet for you to use to determine your product prices and costs.
How to Use the Break-Even Analysis:
Add all your costs/numbers to the yellow and orange cells. Add the price of your product to the bright green cell.
In the top row are your Variable costs per product, and your contributing margin (your profit) and how many units you have to sell to break even.
Above is a quick overview of the BEA spreadsheet so you can get a general idea of what it looks like.
So now you have a price for your product and the cost price for your product. It is a good idea to add both so you can see clearly in the Analysis and Reports in Shopify what your profits really are.