Profit Orientation - Cost Base Pricing

Variable Cost = $30 per tote

Fixed Cost = $4,500 (annually)

Whole Market Estimate is 76,000 (see Rochester census data for number of females between the ages of 18 and 65) of which I would like to get 10%

What would the selling price of the tote be if I wanted to get a 50% target profit.

What would the Break Even volume be, i.e., how many would I have to make and sell before I began to make money.

Customer Orientation - Value Pricing

The cost based pricing gives me a starting point.There are other pricing considerations however.Consumers could use the price of this tote to judge its quality - is it priced appropriately for a custom item?If I change the price what would the effect be on my Break Even Volume?

Competitor Orientation - Competitive Pricing

What is the competition like for totes and purses of this type - is it oligopolistic, monopolistic, or pure competition?How would this affect how we might set a price.