SERK Posted January 6, 2006 Share Posted January 6, 2006 If you made a candle that cost around 30 cents to make, how much would you charge? Would you give a price break for a huge order? (2,000 units a month is a single order) Would $1 per candle be reasonable? (This product is for a high end company who will have a large profit margin themselves.)Usually I just double my cost and throw a little in for labor to determine my costs, but I've never been faced with an order this big and steady. I'd like to hear your thoughts. Thank you! Quote Link to comment Share on other sites More sharing options...
Trish Posted January 6, 2006 Share Posted January 6, 2006 30 cents to make? What kind of a candle, votive? It depends on the type of candle, IMO...on really how much you can get for them but I pretty much stick to 2 - 2.5 times for wholesale and 3-4 times for retail... Quote Link to comment Share on other sites More sharing options...
MommaD Posted January 6, 2006 Share Posted January 6, 2006 I agree with Trish, it would depend on the type of candle, and I have also always used those rates for pricing.Btw, DAYUM!!! That's quite an order! I am jealous! Good luck, and let us know how it goes! Quote Link to comment Share on other sites More sharing options...
SERK Posted January 6, 2006 Author Share Posted January 6, 2006 I would be filling a really small glass container that is screen printed. They will be shipping the containers directly to me to fill, and I will deliver the finished products to their home office each month. (just a 10 minute drive) Quote Link to comment Share on other sites More sharing options...
7Angela7 Posted January 6, 2006 Share Posted January 6, 2006 For me, I charge 2x for wholesale, 3x for retail. Just my opinion, but I think $1 would be a bit much, for that large of an order & a steady one you'll be getting each month, especially since they'll be supplying the container, which I think would be the greatest cost if you had to supply them yourself. Quote Link to comment Share on other sites More sharing options...
Dustpuuppy Posted January 6, 2006 Share Posted January 6, 2006 It's often better to be a bit high than too low. It's a lot easier to get a customer to go along with you, if you want to lower your price.One tactic I've used in printing is to tell them that for right now I have to charge XXX, but If I can figure a way to cut that back without affecting quality, I may be able to give them a break, later.You also have to figure your time as part of your cost. If you figure your time at $10/hr and it takes you 5 minutes per candle, that's just under 85 cents per, for labor. that would bring your cost up to $1.15 if you're spending $0.30 for materials.Double that $1.15 and you're at $2.30 for wholesale. Quote Link to comment Share on other sites More sharing options...
Ashleigh Posted January 7, 2006 Share Posted January 7, 2006 You'll also want to add some for the gas and time for delivering them...Ash Quote Link to comment Share on other sites More sharing options...
candlebean Posted January 7, 2006 Share Posted January 7, 2006 are you going to be packaging them in any way, like boxes or anything?..that would also be a factor. even just lugging them to your car and into the business...sheesh! that's a mess of candles! need an assistant? LOL Quote Link to comment Share on other sites More sharing options...
SERK Posted January 7, 2006 Author Share Posted January 7, 2006 LOL.. actually I probably will need an assistant!! I hope I'm not getting in over my head on this one, as they expressed an interest in possibly even expanding the line during their next product launch! It may come to the point that I have to ...hire? someone... wow, that was weird to say. Thanks for sharing your opinions. I love to hear all the different points of view! I was starting to feel a little greedy by wanting to be paid for my labor and not just my expenses... I'm glad to see others feel the same. I do believe I will ask at least $1 per unit, maybe more at first, then possibly go down once my start up costs even out. I will have to get more melters, buy wax by the pallet, scent by the gallon etc... No, I do not have to package anything, fortunately they have people in house who do their packaging. I would love to hear more advice or opinions if anyone has something to thow in... Thank you.... Quote Link to comment Share on other sites More sharing options...
Dustpuuppy Posted January 7, 2006 Share Posted January 7, 2006 Thanks for sharing your opinions. I love to hear all the different points of view! I was starting to feel a little greedy by wanting to be paid for my labor and not just my expenses... I'm glad to see others feel the same. I do believe I will ask at least $1 per unit, maybe more at first, then possibly go down once my start up costs even out. I will have to get more melters, buy wax by the pallet, scent by the gallon etc... No, I do not have to package anything, fortunately they have people in house who do their packaging. I would love to hear more advice or opinions if anyone has something to thow in... Thank you....One thing we got plenty of around here is opinions. Prolly about 7 opinions for every 5 people. *My* opinion is that if you aren't getting around $2 per unit, you might as well find a nice fast food job. If you're making $0.70 per unit ; @ 2000 per month, your gross profit is $1400. Figure that this is going to take almost all your time, and you're making about $8.75 per hour. That's how it works out if you charge $1 per. Burger King will start you at $8 per hour.And you're going to hire help and buy equipment out of that ?Quite simply, you're going to starve, at those prices. Worse yet, you ruin the market for every other chandler. Then we *all* starve.A couple of ideas, here : First, these stores generally mark things up 100% or so. Take a look and see what they're currently selling these things for. Take thier retail price, divide by 2, then deduct $1 because they supply the jars. See what you get. Also, thier purchase agent might give you a clue as to what they've paid in the past.I'd tell them that I was looking into getting some better prices for materials, but currently I'm looking at $3 per unit. But I'm fairly certain that I could lower that on the third order of 2000. Then be very quiet. The first one to speak, here loses. If they balk at that, they'll generally give you an idea of what they are willing to pay. Then you can tell them that you'll have to crunch the numbers and make some calls.If they bite at $3, you drop the price to $2.50 on the third order and you're a hero. If they want to pay less than $2, tell them to keep looking. Let somebody else kill themselves and starve doing it. I doubt Wal-Mart could get a better price. And these people want to brag about a high quality, hand crafted, hand poured candle. Quote Link to comment Share on other sites More sharing options...
CranberryGirl Posted January 7, 2006 Share Posted January 7, 2006 I agree with Dust puppy!!!! Sorry but to kill ur self over it is not worth it... Quote Link to comment Share on other sites More sharing options...
Dustpuuppy Posted January 9, 2006 Share Posted January 9, 2006 Hope I didn't make you mad or burst your bubble. You should be able to clinch the deal at a higher price than what you were thinking of, though.Maybe Sara, or some others who are more experienced can give you some other opinions.I'd just hate to see you get locked into something that you can't make anything out of. I figure if you take this on, then have to bail after a couple of months, it's gonna make you look bad and word gets around. Quote Link to comment Share on other sites More sharing options...
The_Dallas_Texas_Dean Posted January 9, 2006 Share Posted January 9, 2006 A buck an ounce. Period Quote Link to comment Share on other sites More sharing options...
Suzanne Posted January 9, 2006 Share Posted January 9, 2006 On something like that, make sure you don't cut yourself short like others have said. Once you have an agreement you won't want to have to ask for a higher price per item a month or two down the road. It's easier to give them a discount in the future but it's much harder to negotiate (and get) a higher price after the deal is made and realize the actual cost. Good luck! Quote Link to comment Share on other sites More sharing options...
sockmonkey Posted January 10, 2006 Share Posted January 10, 2006 Hey, don't go laying guilt trips on her because she might have gotten an opportunity for herself! Being too greedy could make her loose out all together. Who knows how many other people could possible be in line to get this job.Another question might be what these candles will be used for. Are they going to be re-sold, or are they give-aways? Is she acting as a sub-contractor for someone else? Who knows. There are large companies who could do the same job instead of her. Maybe this other company isn't aware of them. My advice is to contact one of the larger companies and get a price quote for yourself to see what they would charge for the same job to give you a guide as to what would be fair and realistic. Quote Link to comment Share on other sites More sharing options...
Trejen Posted January 10, 2006 Share Posted January 10, 2006 My 2 cents is I totally agree with Dust....don't cut yourself short. I've done that many times and it bites big time. I'm not good at charging more and I should because that has cost me in the long run. I've probably lost more than I've made if the truth be known!:undecided Quote Link to comment Share on other sites More sharing options...
Dustpuuppy Posted January 10, 2006 Share Posted January 10, 2006 Hey, don't go laying guilt trips on her because she might have gotten an opportunity for herself! Being too greedy could make her loose out all together. Who knows how many other people could possible be in line to get this job.Another question might be what these candles will be used for. Are they going to be re-sold, or are they give-aways? Is she acting as a sub-contractor for someone else? Who knows. There are large companies who could do the same job instead of her. Maybe this other company isn't aware of them. My advice is to contact one of the larger companies and get a price quote for yourself to see what they would charge for the same job to give you a guide as to what would be fair and realistic.Well, personally, I've run two businesses into the ground because of cutting prices to get work. It just doesn't work. If you can't pay yourself as much as you could make elsewhere, plus have a profit for the company, you're spinning your wheels. I've worked for 4 or 5 other people who learned the same lesson, the same way. You've got to make a decent profit to stay afloat.If you cut prices to get the work, then lose money on the deal, you're just losing money twice as fast. Plus you wind up with all your resources tied up, so you may miss out on something that could actually make you a profit.As far as who she's doing them for or what they are going to do with them... it really doesn't matter. It doesn't affect how much you spend to do the job or how long it takes. Thus, it doesn't affect your pricing.Contacting a large company to get a price quote is an idea with merit, but be prepared to *LIE*. 9 times out of 10, if they figure out who your customer is, they'll be calling him as soon as you hang up.The thing is, when you're doing the hobby thang, you can afford to cut prices a bit, but when it turns into a business; it's a whole new world. Most people never think about all the work you have to do and all the money and time you spend, that has nothing at all to do with making production. Business licenses, taxes, paper work out the yazoo. You can count on spending about 1 day a week on stupid crap, just dealing with the government type folks and the bank you have your biz account with and your insurance company, accountant, lawyer. Things like that. You aren't pouring any wax on those days, but you still have to eat on those days.Another thing you have to consider, is that if you have a price based clientelle, the first time they can get what you sell for a penny or two less... you're gone. Doesn't matter if you've been dealing with them for 10 years, they won't remember your name a week after someone offers them a better price. Quote Link to comment Share on other sites More sharing options...
BACKWOODS Posted January 10, 2006 Share Posted January 10, 2006 Amen Dustpuuppy!! Quote Link to comment Share on other sites More sharing options...
donna4909 Posted January 11, 2006 Share Posted January 11, 2006 Burger King will start you at $8 per hour.Meep! Where do you live? *lol* I'm guessing on the west coast, because it's definately not like that here. Fast food pay starts at a little over $5 an hour (minimum wage). I've worked at Taco Bell for 8 months. I started at $5.25, and I'm at $5.34 an hour now. And I for one think it's past time to raise the minimum wage, especially with gas prices nowadays.Seriously though, your labor counts for something. Don't sell yourself short and end up making $5 an hour to just barely get by... Quote Link to comment Share on other sites More sharing options...
sockmonkey Posted January 11, 2006 Share Posted January 11, 2006 I understand where you're coming from Dust, however, there is nothing wrong with calling the competition and getting prices. Yes, you certainly will have to lie. It's done every day in business. It's a simple way for her to educate herself on what real businesses charge for their services and products. I think it would be a smart move on her part to do so. Learning what they charge does not change her costs, it only serves to give her a better idea of a price range she might be able to charge. She might learn another manufacturer would charge $5 for the same thing, or even $1.50. Either way, it should help provide justification in her mind, since she seems worried about asking for $1 per candle. Another good thing to do, is to ask the buyer if they have a budget in mind. She might learn they only expect to pay $.50 per candle, so she shouldn't be wasting her time with them.I disagree with you that it doesn't matter what the end use of the candles is for. It's absolutely important to know and understand your client's needs if you want to stay in business to gain repeat business. If this company Serk's dealing with is just going to use the candles as free giveaways to employees or possibly clients at a party, that's one thing, but if they intend on re-selling them, then they might have higher standards and could be watching the "bottom dollar" a lot more closely to maintain or increase their profit margins.I'm not suggesting she cower and ask for a pittance for her candles. She absolutely should make a profit off of her candles, and to make the most profit, she needs to understand her costs, including all of the extras she will be forced to buy if she gets the job. I don't know if that was already factored in or not. I also don't know what her financial circumstances are--whether this is a hobby or her occupation. I believe she said she had $.30 worth of materials per candle. How long do you think it will take to pour 2000 candles? Can it be done in a day? Is it reasonable to get $1 per candle plus whatever amount per hour in wages she would charge? For example, two 8 hour days x $10 per hour = $160 + $2000 = $2160 for the job, which then breaks down to $1.08 per candle.In my head it doesn't sound too bad, because when she said small candles, I'm thinking tealight size. Sometimes the amount you can get away with charging is actually a perceived value of the item. So, who knows? If we had a little more concrete information it would probably be helpful. Quote Link to comment Share on other sites More sharing options...
BruceCarvesWax Posted January 11, 2006 Share Posted January 11, 2006 Yes, the actual ouce size will help on answering this question. If its 2000 votive/ tealight size candles, it can be done in a week or less, making a nice profit for the time involved. If its a larger size, might have to refigure the deal. (Im guessing votive amounts of wax per candle) No matter what price she quotes them, someone can do them for a cheaper price, so I wouldnt worry about the compitition, just the quality and let them know that also. If its a give-a-way candle, they dont want it made cheap and if they are high end and reselling them, that is even better. Bruce Quote Link to comment Share on other sites More sharing options...
elle110 Posted January 11, 2006 Share Posted January 11, 2006 The other thing you have to consider is that if you "really" have to pay someone else to do them for you (a helper) then their cost is a real cost and most people are going to want approx. $7-$8 an hour, if your lucky to find a college student or someone else who does not need a lot of money.I have shorted myself in the past to get something and I get very resentful by the 2nd order because I am not making $$$. I think you need to sit down add your cost of material and come up with a very real number for labor and add that in, just in case you do have to hire someone, you have them figured in. Also, figure in a # for overhead, it does not have to be a big number, but it is a real cost as well. What if you were to move into a shop next month and had overhead and had the same account, you would have to raise their price, instead already have some kind of # figured in.Once you have that # multiply it by 3 for retail then to get your wholesale # multiply by 2. What I like to keep in mind on my wholesale accounts in that they can get by charging more in a store than I can at a craft show or on-line so on some of my items I multiply 2.5 for wholesale and suggest their retail at a higher amount than I sell them for.The way the big companies get rich is they sell for cheaper but might sell 30,000 of them, so if they only made a $1 on them they still made $30.000. We don't have the resources to make huge accounts like that plus if we did the whole handmade factor goes out the door and we are just another company making bulk product the cheapest way possible.Charge what you are worth and sell the crap out your product and always capitalize off the fact you are offering a different type of product than a BIG company!!!!!!!!!!Good luck and make sure to let us know how it goesMichelle Quote Link to comment Share on other sites More sharing options...
SERK Posted January 11, 2006 Author Share Posted January 11, 2006 Thank you all for your valuable information. I'm learning so much from it and I truly appreicate the feedback. More info as requested: *The candles will be two ounces, all the same scent, no color.*These will be resold, but included with other products in a gift pack.*My goal is to be able to get 500 poured in one 5 hour day, once a week. Clean up and re-boxing would be done the next day. Deliver once a month. I realize this is ideal, and I expect to be hit hard with reality once it begins and will adjust my goal accordingly. *I would not need to hire anyone to help with this particular order. They expressed interest in eventually expanding their line and offering some candles to be sold individually. If this happens, I would probably need help at that point. Working full time is not an option for me at this point. *They had someone out of state pour their existing candles, but contacted me as they wish to buy locally for the next run.*This is a mid-to-high end line of products. They expressed they want to keep the resale to a "reasonable" price, but not "low". *I asked them to give me a budget to work within for my product development and they are researching container options and will be calling me with some numbers.*They appear to be flexable and willing to work with me. They are putting the product development in my hands and they seem excited to see what I come up with.*I have been out of the candle "business" for the last 5 years, and this would be my only account other than the friends and family that I currently pour for. One thing I know for sure, a lot has changed in 5 years in the candle making world. My prices are way outdated. Quote Link to comment Share on other sites More sharing options...
BruceCarvesWax Posted January 11, 2006 Share Posted January 11, 2006 That sounds like a sweet deal to me. Same scent, no color.... you can easily crank out 500 in a day. If the cost to you is 30 cents, I think I would be selling them for $1.00 and pick up an easy 350.00 a week. Im not sure about anything over that price, if they have fancy jars custom printed they are already paying .50+ cents so they would have about 1.50 min in the product. Yep, thats what I would do, no labeling, no packaging, no color... no problem. Bruce Quote Link to comment Share on other sites More sharing options...
Dustpuuppy Posted January 11, 2006 Share Posted January 11, 2006 Thank you all for your valuable information. I'm learning so much from it and I truly appreicate the feedback. More info as requested: I had actually been thinking these were a bit larger. I still think $1 per is a bit low. But my figures may be a bit high. 500 per day seems a bit optomistic, but I seem to recall Bruce saying that he could pour something like 800 4oz containers in a day, or something along those lines. You have to remember that he's a bit better equiped than most of us, though. He can give you a real good idea of what's realistic, though.I might still start off hinting at around a $2 per unit figure and see what kind of reaction I got. Bruce seemed to think that your figures were close, though. He's a lot more experienced than I am, in the candle making as well as the selling of them. I'm more of an expert in what *NOT* to do, in business. Equipment will matter. A presto pot holds enough wax for about 40 of these. To pour 500, you'd need 62 1/2 pounds of wax. A melter of that size will cost around $800 - $850. Here's one link :http://www.wenesco.com/wax2.htmCandlewic ( I think ) and a few others have the water jacket type, but they run about the same price, if memory serves. For me, it would be worth a few extra dollars not to have to watch the water levels. I'd prolly be buying new elements quite often because I know I'd forget to check the water. I'm thinking you'd need at least 4 Presto pots to keep any kind of a smooth work flow going. You might get by with 3. With 2 you'd spend half the day waiting for wax to melt. A couple of turkey roasters might be an idea. I think they run around $30 or $40. Might be worth taking a look at. Quote Link to comment Share on other sites More sharing options...
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