Recipe Cost Calculator Updates: Units, Margins
As the name implies, at ReciPal we want to keep building simple tools based around your food business’ recipes. One of the first additions we made was to create a simple recipe cost calculator for your recipes. It worked and provided insight into your recipe’s costs. But, it was probably too simple.
Costing Tool: Before
Having to price each of your ingredients based on grams is not that practical, which is how the initial costing tool worked. For example, take eggs. You probably buy a dozen (or more) at a time, or even have a per unit price. How the heck do you convert that into grams? We ran through this example at one point and realized the flaw.
Costing Tool: After
The improved pricing tool allows you to select units and quantity for each ingredient instead of having to enter the weight in grams. It’s more flexible, more powerful, and more closely mimics the process of creating a recipe, making it very intuitive for our users.
Helping You Price Your Products
The costing tool provided great insight into your product unit costs, but left something to be desired to understand how you should actually price your product – for distributors, brokers, and retailers.
To that end, we’ve added options to include your various sales channel margins to understand how to figure out the right retail price for your product. So, based on your costs, the margins you want to make yourself, and the margins each of the middlemen you work with will charge, we can come up with a minimum suggested retail price.
We think this will help our users run a better business. Not only will they understand their costs, but they’ll be able to make more informed pricing decisions.
Lots of food businesses start out thinking they’ll charge $5 at farmers’ markets, and then have their minds blown when they realize that retailers charge 40% margins and distributors another 30%, meaning that their product will be selling for at least $10 in the store if they want to make any profit.
We want to avoid that moment of surprise when a food business realizes their pricing is completely incompatible with a retail and distributor model. And we think our recipe costing software and the new pricing tool will help.