FREE 3+ Product Cost Proposal Samples in PDF | DOC

Product costs proposals, also known as price proposals, are the type of proposals you hand out to clients or customers regarding a product’s price for sale. Proposing to clients can be a tricky process since you have to analyze the situation as well as your product’s quality and cost of producing them as factors in providing prices to products. If your price is too high, clients will turn don your proposal and if your price is too low, you’re not gaining any revenue since it won’t cover your expenses. However, at most times, what you charge does not always a make or break factor of getting your proposal approved. Sometimes it is also in the way of how you present your prices to the clients. This article will guide you on how to make a product cost proposal for you to present to your clients.

3+ Product Cost Proposal Samples

1. Flexible Product Cost Proposal

2. Software Product Cost Proposal

3. Product Cost Settlement Proposal

4. Product Cost Project Proposal

What are Product Costs?

Product costs are the incurred expenses when a business is creating a product intended to sell to customers. Product costs include these three basic categories: direct material, direct labor, and manufacturing overhead.

1. Direct material: These are the costs of raw materials or parts that will be used to manufacture products.
2. Direct labor: These are the costs to compensate employees directly involved in manufacturing and producing the products. These come in form of salaries, benefits, and insurance.
3. Manufacturing overhead: These are the costs that are related to the machinery, tools, equipment used to manufacture the products. This category can also include indirect costs such as indirect materials and indirect labor.  Indirect materials are materials that are used in the production process but are not directly included in the products. Indirect labor is those workers not directly involved in the production process. They could be working as security or quality assurance.

How to Make a Product Cost Proposal

1. Use the Bundle Pricing Technique

Bundling pricing is a technique done by pairing two or more complementary products or services together and selling them for a single price. It’s a clever way for businesses to upsell and cross-sell their products or services to benefit both their customers and revenue goals. When you do this technique ensures that you have enough products or services to sell as a bundle and that your customers prefer to buy the bundles. To sum it up, make sure your business is the right fit for this technique.

2. Present a Benefit or Solution

When you communicate your price cost proposal, present all the benefits of the products or what solutions the services can provide to customers. Explain the value, expertise, and competency that justifies the price of your products or services.

3. Offer Multiple Options

If you only list one pricing option in your proposal, your clients will have second thoughts on going through with it. Offer more flexibility by presenting multiple options or packages through tiered pricing. Tiered pricing should make sense from a value perspective of your client for them to know what exactly to expect in each option and they have the freedom to choose which pricing they are most satisfied with. You can do tiered pricing by using value, standard, and premium packages, for example. Try to limit with 3-4 options so you don’t overwhelm your clients with too many options.

FAQs

Writing a cost proposal can be challenging since it takes a lot of work and concentration to avoid mistakes and inaccuracies. However, take your time to write your proposal according to your client’s needs and style, and make sure to revise it when you’re done. You can also ask for help from a colleague to review your proposal. To help you get started on writing the proposal, download our free sample templates provided above!