Costs per product
With the Calculate Costs per Product tool, you get immediate insight into what a product actually costs you.
With the Calculate Costs per Product tool , you gain immediate insight into what a product actually costs you. Many entrepreneurs only look at the purchase price but forget to include fixed costs such as rent, software, marketing, and administration.
By distributing all costs fairly across the number of products sold, you get a realistic picture of your cost price per product.
What are product costs?
The costs per product consist of two parts:
- Variable costs : costs that vary per product
- purchasing
- packaging
- dispatch
- Fixed costs : costs that are independent of sales volume
- rent
- subscriptions
- marketing
- administration
Formula for costs per product
- Total costs = fixed costs + (variable costs × number of products)
- Cost per product = total costs ÷ number of products
Why calculating costs per product is important
- prevents excessively low selling prices
- helps with margin and profit calculations
- provides insight into scaling up
- supports pricing strategy
Who is this tool suitable for?
- webshops
- producers
- self-employed
- small business owners
- start-ups
Frequently Asked Questions
Is this inclusive of VAT? No, standard excluding VAT.
Can I use this per period? Yes, for example per month or per year.
What if I sell more? Then your fixed costs per product decrease, which often leads to higher margins.