Enterprise Budgets – Pricing for Profit
Pricing products that do not have an established market can be difficult. For example, let’s assume you are producing tomatoes and notice the local grocery store is selling California tomatoes for $1.50 per lb. In addition, you have asked potential buyers and they say they are willing to pay 10-20% above grocery store prices. From this information you sell your tomatoes for $1.80 per pound. Were you profitable? The key to long-term success is the ability to sell products at a profit. To do this you need to know your costs.
Craig Chase (ISU Extension)