Have a new product idea that shocked the world? what are you waiting for? When developing and pricing new products overseas, the first step should be to check whether similar products already exist on the market and what the prices are. If there are similar products, check out how to differentiate your ideas and use the prices of competing products as a starting point. This is needed to bring products to market and price them fairly.
Let me first sketch that many people sourcing products from abroad will be relevant. like this
You want to launch a good idea on the market: large, durable, lightweight high-style eco-friendly canvas tote bag with waterproof function, adjustable shoulder straps, which can be adjusted according to your comfort, and has multiple internal and external Pocket and can hold baby items and computer equipment at the same time. For user convenience, the bag will include a replacement pad, a tablet pouch, a smartphone case and a laptop case.
With a pencil in your hand, you can draft your idea on paper and prepare it for submission to a potential supplier who can make your product meet specifications. At the same time, you tore off photos from magazines, newspapers and catalogs that look similar to your tote bag style. In addition, you have captured website screenshots of some products that capture the essence of your idea, or combine parts of your idea (baby tote and computer gear tote) or almost all components (color canvas tote )combine it all toghther.
Congratulations! You are ready to show your ideas to the supplier! You are ready to draw sketches, photos and screenshots in a neat and organized way. But wait. You forgot to consider the price. What price are you looking for on this product? What price does the market offer for your products-retail price is $ 25, $ 35 or $ 60 (excluding shipping) of course?
Once you’ve identified a reasonable retail price point, step back from there to see what price you need from your supplier when importing your product. Assume that based on the initial 1,000-bag order, the price per bag is approximately $ 5. Then, when you take into account taxes, duties, customs clearance, transportation and insurance, its landing price (ie home delivery) is $ 11 per bag. This way, your profit per bag is between $ 14 and $ 59. But wait. There is more to consider.
After you import the bags, you must store them somewhere, unless you think you can temporarily store 1,000 bags in the basement. However, if the number of imports is large, you must set up a warehouse, order boxes for luggage, establish a direct transportation process (when someone orders luggage, they must be shipped in stages), and a transportation method. All these steps add extra cost to the product. So now that you’ve deducted an additional $ 7 from the cost of $ 11 per bag to cover all other incidental but significant costs associated with bringing the bag to the customer, you now have a cost of $ 18 per bag. Yes, fortunately, you can still make money. Oh, who will sell the product once it is available on the market?
This is an additional cost for you and others. Now your fees are up to $ 20 per bag, including sales costs, and depending on the retail price, your profit will range between $ 5 and $ 39 per bag. Other factors to consider: Are you going to sell business-to-business (B2B) or business-to-consumer (B2C)? If you sell B2B, the retailer selling the tote will add a high markup (its profit) to your price, making the retail price higher. By selling B2C, you can keep your profits steady and maintain most of your profits, but you will most likely end up selling a small number of bags because you sell one bag at a time instead of selling a bunch of tote bags to a retailer for resale.
Now that you’ve considered pricing and profit, you can start purchasing products and eagerly waiting for product samples.
I will cover these two key steps more fully in another article. Be careful!