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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.

 
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