Follow-Ups to Answer from Expert Eric Hofer

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steve wrote at 2009-09-24 12:24:41
$1.30 to produce a drink is WAY too expensive, it should be well under 50 cents if you're targeting a $2 retail price, but that doesn't include marketing or development costs.



If you were producing it for $1.30 and selling it to a distributor for $1.50, it looks like you're making a 20 cent profit per bottle, which is pretty low, but in actuality you have to also factor in marketing and administrative costs and you' likely be losing money on this product.



Also, fruit and vegetable juice spoils, so if you can't move the product really fast you will fail.



don't expect the distributor to do all the work, you need to support them with sales personnel, POS tools and promotions/incentives. In fact, the distributor wont want to buy your product unless they know you are going to go all out and help market your product - and with a 20 cent margin for yourself they'd probably have a hard time believing that you'd put much into marketing.



Also, $2 for 12 a 12 ounce bottle is kind of high, unless the product has premium packaging.



Alternatively, I have seen some ultra high priced organic/natural juices selling for $3+ and if you could reach that price point your beverage could be feasible if produced for that high $1.30 cost.



Your distributor will also want to make at least $.25 per bottle, and if you're selling at a premium price point above $2 they will want more. Same with the retailer, they will want to make at least $.25 per bottle but more is obviously better. Also, the retailer will decide the price point, you can only give them a suggestion  

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