Calculating the value of your Product
A quick way to calculate the value of your product is to add up the amount of money that you spend on marketing and advertising, then add up the cost of goods and other related expenses. Then, divide this total by the number of units sold. This is a good indicator to determine if you are creating a valuable product.
You should also look at your business expenses as a whole and determine if you are spending more money than you are making. If this is the case, then you should think about altering your business model to create a more profitable product.
Take into consideration how much time and money you have invested in your product before declaring it a failure. There are many ways to re-package and sell an existing product, so don’t throw it away until you have exhausted all of your options. You may be able to create a new product that sells for more than the original product.
How to Create a Valuable Product
If you’re a creative person, then you will probably enjoy trying out new ideas. You may have a hobby that can be turned into a profitable business. It may be something that you’ve always wanted to do, but never had the time or money to pursue. The idea that you can make money doing something that you love is very appealing.
However, if you aren’t good at creating new products, then consider buying an existing product and selling it for more than what it cost you to buy it. There are many people who are looking for a great deal on certain products and they will pay more than what the product is worth just to get a bargain. If this is your idea of creating value in your product, then it may be worth pursuing.
Most people don’t have the patience or money to spend on expensive marketing campaigns in order to create brand awareness of their product. Instead, they will buy someone else’s product and resell it for a higher price.
If this is your idea of creating value in your product, then make sure that the person from whom you bought the product isn’t aware of how much profit you are making from reselling their products. Otherwise, they may stop selling their products through online channels and go back to wholesaling them instead.
There are many ways to create value in your product. The best way to do this is to look at the amount of money that you are spending on advertising and then divide it by the number of units sold. If you are making a profit, then your product is valuable. If you aren’t making a profit, then try re-packaging or re-selling your product in order to create value.
How to calculate the Cost of Goods Sold for Digital Products?
If you’re selling digital products, then the cost of goods sold is calculated by taking the total amount of money that you spent on developing your product and dividing it by the number of units sold.
For example, if you spend $50,000 to develop a software program and you sell 5,000 copies at $100 each, then your cost of goods sold is $10 per unit. If your cost of goods sold is more than what you are selling your product for, then you need to reduce the price or create a new product.
If your cost of goods sold is less than what you are selling your product for, then it’s time to make some money. You can start re-selling other people’s products in order to increase your profit margin. The best way to do this is to resell someone else’s product for more than what it costs them to make it. This way, both parties win and there is no reason for either party to stop doing business with each other.
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.