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What margins and ratios do you use for product sales?

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Daytraderz

Contributor
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Feb 11, 2016
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Hey Fastlaners,

I have been MIA for a minute, finishing up school, getting my company going, making connections. I'll make an update post later, but for now, to the point!

I have two products. One costs $9.75 (a t-shirt) and the other costs $12.50 (a patented product). I am having some problems in my head calculating the finances out for everything and was hoping my fellow entrepreneurs could steer me in the right direction... Here's my questions.
1. What profit margins do you look for?
2. How do I calculate the real price of my product (including taxes, COGs, if i'm missing another one let me know)
3. Do you look for any other ratios/margins that I am not?

Lastly, I have an idea to incorporate my artists for the shirts in advertising/sales... I was thinking about giving him a base fee for each shirt sold as he did the work for free (what would be fair for this, I am thinking 10%), and then upping his return if he directly sells a shirt and/or the patented product.

My biggest issue in my head, and yes i've done my own research, is how can I have this set-up so he isn't an employee? I have thought about doing a work-for-hire contract but am hoping there is a better way to go about this (maybe under the table? Not that I would eeeeevvvvvveeeerrr do this...)

Thanks friends
 

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Merging Left

Silver Contributor
Read Millionaire Fastlane
Speedway Pass
Jul 20, 2014
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You could possibly structure your deal with the artists as a consulting/marketing agreement where they get a fixed amount plus some additional commission/royalty based on direct sales. Talk to a CPA/Lawyer on that one.
 

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