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Dave,

Thanks for your reply. I have a feeling he's looking for the "keystoning" you're talking about. I sent him an email asking him to clarify what he's looking for.

Right now my costs beyond materials are relatively small. Web hosting, artists fees, some odds and ends. My wife and I both have stable incomes, so beyond my start-up costs so far, my only new cost is my time, which I'm happy to donate.

As I've thought this through, I see sales volume as a big priority. If I set prices for my first few sales that turn off potential buyers, then I figure I'm limiting our long-term potential. Because it's a niche product, my customer list is relatively small.

I've been thinking I'll go with a lower profit margin to get a solid base of regular purchases and build relationships with my retailers. If I can cover my web hosting and my artists fees the next few months, I'll be really happy.

From there, as I produce shirts at higher volumes, my production costs will go down and hopefully increase the margin. And as the retailers get into the routine of buying and selling my products regularly, I'll have more room to increase my sales price simultaneously. This will also allow us to see what prices the market is willing to pay, before we just price ourselves out all together.

See any first-timer mistakes in my rationale?

Thanks again,

Ryan
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