What would you price this at?

[inhawaii]

I love doing math.

I have a food item that i sell. There is a 1.5 oz. size and a 4.0 oz. size.

The odd thing is my cost is the same on both items.

The 1.5 oz. item costs me $5 and i sell it for $11.

I'm trying to figure what i should be selling the 4.0 oz. item for?

I'm not going to sell it for the same price just because it cost me the same.

If my math is correct the 4.0 oz. pack is 166% more than the 1.5 oz. pack.

$11 X 166% = $18.26 

Is that what you would sell the 4.0 oz. item for?

[nobody*s_perfect · Accepted solution]

4/1.5 is 2.66  

2.66 times $11 is $29.26.

So any price below that would save your buyers in terms of unit price.  

$25 would be fair.  And a price of $20 would clearly be more than twice as much product for less than double the price of the smaller unit.

[wastingtime101]

1.5 oz for $11.00 is $7.33 per ounce. 4 oz would be $29.33, not $18.26

I would look at retail and competitor prices before setting a price. If that was no help then I'd charge somewhere around the 3 oz ($22) price - maybe stretch it a couple bucks. Larger size packages typically cost less per ounce in the food store and that's what buyers will likely expect.

[coastaltechsolution]

$59.99 😁

[m60driver]

If both sizes cost you the same then you are making about 55% gross profit margin (GPM) on the small size and if you sell the large size at 19.99 you are making about 75% GPM.  You would need to add up the small sizes vs the larger sizes in inventory to get your average GPM and adjust accordingly.   You might want to slightly raise the price on the larger size, say to $24.99 until the smaller size is sold out.

[luckythewinner]

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@inhawaii wrote:

I have a food item that i sell. There is a 1.5 oz. size and a 4.0 oz. size.

The odd thing is my cost is the same on both items.

The 1.5 oz. item costs me $5 and i sell it for $11.

I'm trying to figure what i should be selling the 4.0 oz. item for?

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I would not price the 4 ounce item based on my 1.5 ounce item ... I would price the 4 ounce item based on the my competitor's prices for the 4 ounce item.  

I would also stop buying the 1 .5 ounce item altogether, since my cost is 166% higher 🙂

[inhawaii]

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@luckythewinner wrote:

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I would not price the 4 ounce item based on my 1.5 ounce item ... I would price the 4 ounce item based on the my competitor's prices for the 4 ounce item.  

I would also stop buying the 1 .5 ounce item altogether, since my cost is 166% higher 🙂

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 I actually thought of that at one time. Why am i wasting my time on the small size when the larger size is the same price?  But there seems to be a market for both. People are buying both sizes.  I adjusted my price to nobody's perfect's  $20 suggestion.  I had it priced at $19.

I find it  interesting that even though the larger size is a much better deal, the smaller size outsells the larger size.  I think customers are just looking at the dollar amount and not at which is a better deal. 

[nobody*s_perfect]

In that case, maybe you should increase the price of the smaller size by $1.

[wastingtime101]

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@inhawaii wrote:

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I find it  interesting that even though the larger size is a much better deal, the smaller size outsells the larger size.  I think customers are just looking at the dollar amount and not at which is a better deal. 

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The 4 oz size has much longer pieces - that's a heck of a lot of sugar cane to gnaw on. It's extra work to cut them in half. This is essentially candy. The smaller size is much more convenient and people pay for convenience.

The longer ones are also marketed on the packaging as swizzle sticks. The photo in your listing is darker, too. There are tons of reasons why buyers might gravitate towards the smaller package.

You should put 1.5 oz and 4 oz in the respective listing titles. 😁

[biggymoe]

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@inhawaii wrote:

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@luckythewinner wrote:

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I would not price the 4 ounce item based on my 1.5 ounce item ... I would price the 4 ounce item based on the my competitor's prices for the 4 ounce item.  

I would also stop buying the 1 .5 ounce item altogether, since my cost is 166% higher 🙂

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 I actually thought of that at one time. Why am i wasting my time on the small size when the larger size is the same price?  But there seems to be a market for both. People are buying both sizes.  I adjusted my price to nobody's perfect's  $20 suggestion.  I had it priced at $19.

I find it  interesting that even though the larger size is a much better deal, the smaller size outsells the larger size.  I think customers are just looking at the dollar amount and not at which is a better deal. 

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Might be buying the smaller size to try it and see if they like it.  Do you get many repeat buyers that upgrade from the smaller, to the larger?