product pricing

Inventing 101

Your Profit Formula

As a general rule, a product needs to be manufactured for 25 percent of its expected price to consumers to make money. This is due to distribution and selling costs. That means that your manufacturing costs must be less than 50 cents if your product’s retail price is $2.

Inventing 101

Think Like a Licensee

Companies always want a margin of at least 50 percent. You need to have a good grasp of the percentage of the retail price the company receives to address this issue. Understand and leverage these 4 main deal-making factors for your potential partners.

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