EEVblog #887 - The Economics Of Selling Hardware
Video from EEVblog. Watch on YouTube.
What you'll get
Dave Jones, who runs the EEVblog electronics channel, covers the arithmetic of pricing your own hardware, sold direct and through a distributor or reseller: cost multiplier, gross margin percentage, markup and cost of goods sold, with chapters on pricing, distributors, margin, markup and a spreadsheet. His examples are electronics, but the arithmetic is the same for any made good, and it keeps you from mixing up margin and markup when a store asks for its cut.
Do this week
Build a sheet for one product with your cost of goods, the price you would sell it at direct and the price a distributor or store would pay, and calculate gross margin and markup for each, naming the base each percentage uses.