Let’s look at what it does in a few simple words:
It helps determine how much your products are going to cost you during your sales.
How much will it cost you? We’ll answer that for you:
How much is it going to cost you to produce an item on the market?
Here are some common ways to read fabric prices in the United States. Most fabric retailers also include the NAP fee.
What’s that NAP fee? It’s a marketing fee that you and your business have to pay to your manufacturer to be sold.
How much does it cost the consumer? According to the FTC, an NAP fee can only be paid when you sell 1,000 or more items on the market.
What’s the NAP calculation? It’s a standard mathematical equation you have to solve for a product that can be described on one flat sheet of paper or on the Internet, like a $5 dress. Here’s an example:
Example 1: A $5 dress made at an outfit or a label
Your fabric costs $2.99. So your NAP fee is $0.01 per square foot.
Your item sells for $40 and you make $4.99.
Your item sells for $5.97 and you make $0.25.
Example 2: A $5 dress made at an outfit or a label
Your fabric costs $2.99 and you make $5.96. Your NAP fee is $0.01 per square foot.
Your item sells for $46.81 and you make $1.92.
Your item sells for $10.47 and you make $0.09.
Example 3: A $5 dress made at an outfit or a label
Your fabric costs $2.99 and you make $4.96 for the $50 cost. It is a $1.50 sales price and has a NAP fee of $0.29 per square foot.
Your item sells for $5.99 and you make $1.24.
You’ve already made more than $1.24 for the product, because you’ve not only sold the item but also made sales on it. You can make more sales on the dress if you go shopping and you’ve got the sales pitch ready.
You’ve also made sales on other items you sell to yourself, like the $20 jeans
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