WORKSHOP - PROCESS

Profit Margins and Accounting

You will need to work out the cost of making each product and how much you will need to make a profit!

1. You will need to calculate the cost of each product unit ie. how much does it cost to make a bag?

2. Need to establish how many (Bags) units the group and/or an individual needs to manufacturer per day to break even.

3. To calculate what wholesale price you want to put onto your product, you need to calculate:

a. The cost of the raw supplies

b. The value added extras ie. screen printing for bags or printing of story books.

c. The cost of the packaging (if any).

d. The cost of advertising/marketing.

You need to determine your buy price, the cost of your work and thus arrive at the wholesale price; also need a margin for outside retailers.


For the bags, you will need to:

a. Approach independents supermarkets etc to get shelf space while giving an undertaking not to sell into the chain stores.

b. Approach supermarket retailers such as IGA in Sydney, Ritchies in Victoria, Kings in Victoria, Fishers in Victoria, Cellarbrations (liquor outlets) under the Metcash umbrella in NSW and Victoria.

c. Conduct an advertising campaign and get media coverage via ABC in all states, on either 'Landline', or  'Message Stick'; get a friendly newspaper journalis in 'the Australian' and 'Current Affair' to interview your group.


Decide whether to deal with chains stores or small independent retails. Don't deal with Coles or Woolworths if main focus is to be via independent retailers; as independents need a point of difference otherwise they'll not support you.

 

 

 

 

 

Introduction | Task | Process | Resources | Evaluation | Conclusion | Teacher's Guide