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Questions & Answers

Posted by Judy Vendramini on 2014-09-12 16:15:00
Title: I am starting up a gluten free food manufacturing business. Currently I have one primary client and ...
Category: Leadership

I am starting up a gluten free food manufacturing business. Currently I have one primary client and I am hunting for subsequent clients. My question has to do with pricing. I have a spreadsheet that lists all the ingredients so I have no problem with that price, but I have a problem with insurance and delivery fee. I took the insurance that I pay for the company and divided it by 52 weeks. I put a $5.00 delivery fee. If the subsequent companies purchase 1 dessert, then the $5,00 is okay, but what happens if the companies purchase 3 desserts? How do I put that into the pricing?

Answer:

Fabio Campanella
2014-09-16 10:20:00

The answer to this question depends on whether or not the insurance is a fixed annual cost or variable.

If the insurance is variable (i.e. goes up with every delivery you make) then the answer is simple, just divide the total cost of the insurance by the number of deliveries you make.

If the insurance is fixed (i.e. you pay a flat annual fee for the insurance once per year to cover all deliveries) then you should estimate your annual deliveries and divide the total amount of insurance by this number. You would then charge your customers this amount per delivery.

Fabio Campanella
Partner, Campanella McDonald LLP