good afternoon. how would you go about figuring the price of a truffle in a shop? and what margins…
how would you go about figuring the price of a truffle in a shop? and what margins should you use?
There are a lot of considerations that go into pricing:
• cost of ingredients (in part determined by the size of the product)
• cost of packaging
• cost of labor
• overhead costs (rent, electricity, marketing, professional services, etc)
There is also the question of location and the demographics and psychographics, which determines the upper limit for what you can charge. For example, I have a chocolate shop in my building and one three miles or so down the road. I live in a quite affluent town, so the price charged for “European-style” truffles ($2.25 ea) in my building is about double what is charged for “American-style” truffles ($1.25 ea) down the road. In Manhattan, that European-style truffle can go for as much as $3.25.
Pricing and margins will also be determined by who you are selling to. Direct to retail customer and you collect 100% of the margin. If you sell through a broker/distributor who sells to a retailer your price should be based on gross margin (not markup) after accounting for all your costs.
I know this is not a precise answer, but there are many variables to consider.