I need help with wholsale pricing

[jamie]

I have always sold my candles myself, I sell them probably too cheap, but for $8 for an 8oz tin . But I have been asked what they would be wholesale, if they bought 100 candles . I never really thought about it. But I did sit down and figure my cost of everything, including the shipping, and a round dollar amount is $3.00 per candle. In your opinion, what would you sell this candle for, retail and wholesale. I thought about selling them for $10.00 but I haven't went up yet. I'm not sure how much I should be making if I sold it wholesale. Can you help me ?

Jamie

[TwinMom]

I have been approached to do wholesale and like, am stuck at what to do....hopefully we both will get some answers....lol

[judyvega]

http://www.candletech.com/forums/showthread.php?t=21339

Maybe this sticky from the business section will help you?

[Scented]

In a nutshell, which you should find on that link, you take what it costs you to make your product and most peeps x that by 2. Keep in mind I think most charge for the container once and packaging once.

[bugtussle]

I find that wholesale pricing is a very difficult subject. 2xcost is just a rule of thumb. You have to consider the time, effort it takes to make the product. I will not pour a 6 oz tin unless I can add a $1 for labor, just not worth it. I also add .50 for overhead (elec, ins, wax melters, etc) and another .50 for Bugtussle (my company.) Therefore, my cost on a 6 oz tin is 3.15. Just went up .15 for increased cost of wax. The tin can be easily retailed for $6, $6.25 or $6.50. I apply this same formula to the bigger 11 oz tureen but double labor, twice as hard to make. Therefore, $2.50 matl, 2.00 labor, 1.00 O/H & Bug = $5.50 whlse price, retailer can mark up to $11.00.

I avg cost of FO at $16.00/oz & try to not use any that go over that. Wax averages .98/#.

What I am basically saying is some things can't be wholesaled, matl cost is just too much. But don't ever forget to leave yourself enough labor for pouring. Pouring candles is an art and make sure you allow enough for your time. I was an accountant (cost accounting) for 35 years before my candle company and learned that your labor is what makes it all work. Hope this has not been too confusing. Good luck. Carole

[bugtussle]

Think I will bump this one! We need some more help. Carole

[mizbizzyb]

I am the odd one. I give myself an hourly rate to pour if I am doing wholesale.

Example - just throwing out numbers...none are mine.

It cost $2.50 to make that candle at your cost.

Give yourself an hourly rate to pour - label etc.

mmmm...say $20/hr for your labor (just throwing this out - this is not what I use)

Lets say you can pour 25 of those above candles in an hour. Then I give myself time for labeling, wicking, etc. Lets say another hour.

That takes 2 hours total. $40 of time.

Labor is $1.60

Candle is $2.50

Wholesale price $4.10 (if it seems too low to me I inflate this sometimes - but I give myself a different hourly amount)

I set minimums on wholeslae like 12/24

So if this candle min is 24 the case would be $98.40 - or whatever.

When I first got started in candles back in 2000....another candle maker told me that is the formula she used to price her candles in general for shows etc. I can't use it for general sales - but have been using it for large bulk orders and for the couple wholesale accounts I have.

That is just me - I know others use another formula. But this has worked for me.

[jamie]

Thanks Mizbizzyb !

that was the best explanation I've read. And it makes sense. I am going to use my numbers and see what I come up with. Instead of looking at each individual candle, look at it as a whole. That's easier for me and makes more sense.

Thanks,

Jamie

[Keith]

The above explanation from Mizzyb is great .. except for one very major point .. PROFIT !!! she hasn't factored for it, only materials and labour.

Imagine you were the boss of Walmart or Marks and Spencers or any othr retailer across the world, how would they even begin to make money if they only factored materials and labour, who would line the bosses wallet or in fact pay the employees !

The absolute golden rule for pricing is actually very simple and this is it :-

Retail products are x 3, the first is the cost of materials, the second is your labour time and the third is your profit. If the materials of your pillar candles were £1.50 then the retail would be £4.50, materials @ £1.50 + labour @ £1.50 + profit @ £1.50

Wholesale prices have to be a little less for obvious reasons and the rule there is x 2.3 the profit is reduced by 0.7 for the customer to make a profit and the loss in profit is made up for by the increased turnover revenue.

It's as simple as that. This is a universal formula used by businesses the world over. I've come across it time and again in the different ventures I've either been involved in or had connection with. Needless to say I employ the same formula in my own business very successfully !

Have fun guys !

Keith

Candelights in the UK

http://www.candelights.co.uk

[mizbizzyb]

My profit is in my hourly wage. That is how I pay myself. That is calculated into the wholesale price for my customer.

[bugtussle]

I will not pour a 6 oz tin unless I can add a $1 for labor, just not worth it. I also add .50 for overhead (elec, ins, wax melters, etc) and another .50 for Bugtussle (my company.) Therefore, my cost on a 6 oz tin is 3.15.]

Keith, you're right on! My company has to make a profit, my labor is for making them, what if I employed someone to do it for me. I probably don't have enough allowed for my company. It is so competitive around here, I'm not sure I could add another dime. Carole