CONSUMER PRODUCT INDUSTRY PRACTICIONERS:
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This is a Quora question. This is my answer.
The general goal in consumer products is 20% EBITDA (earnings before interest and taxes) profit margins.
But these are commodity products and the category is probably competitive, so it’s possible EBITDA is less, may 10%-15%.
Cost of Good Sold (COGS) on a product like this is probably 15% – that is raw materials+manufacturing+packaging+shipping to warehouse.
Retailer margin (markup from wholesale) depends on the channel – anywhere from 14% to around 50%.
So, when you break it all down, the costs are all in marketing, sales and distribution. Prices probably are not that high because this is a commodity product and many competitors, thus less ability for one to charge higher prices.