How much would you pay for a candle.....

[ValhallaGal]

time 12.50 hour x .5 6.25

Um.. you include your own time at $12.50 into the cost? ROFL

I'm sorry coco, but I don't see what you find so amusing about this statement from southern scents. It is perfectly logical and of sound business sense for him to be paying himself a wage. Or at least figuring it into his costs. I do the same when figuring my own costs. As advised by my accountant many years ago. This is why I will have social security to retire on when the day comes. Unfortunately many small businesses do not take that into consideration. And find themselves in a quandry when they are too old to work any longer.

Granted southern scents may need to re-figure his prices in order maximize his gains. However, at the moment, it is working for him and his methods do not warrent the unkind comments that have given him.

Just my opinion.

Blessings,

Donna

[coco]

Valhalla- forgive me if you find my remark uncalled for, though Southern is a 16 year old kid. What works for him is selling anything and everything he can, whether it is tested safe or not. Insurance is not something he posseses, therefore I doubt he cuts himself a paycheck and issues himself a W2 at the end of the year. I would be shocked if he actually has a business license. When he is attacked by others here because of his teenage ignorance (which is quite often), I am usually the first to defend him because my opinion is "his problem, not mine". In this case, I just couldn't bite my tongue as it is NOT an accurate way to calculate cost of the product and those who do this will be in for a rude awakening if audited.

I have owned a business for 12 years now and my PROFIT is what is considered my personal income. If you report all of your income and pay taxes on it annually, then you are paying into social security (as I can only assume that if he does in fact actually have a business license that he is operating as sole proprietor under his own social security number) . It works out to be the same dollar amount that goes into your pocket whether you call it "wages" paid to yourself or profit from your income. Yes, you can write off a salary paid to yourself at the end of the year to help minimize the amount of taxes that you owe, but you cannot include paying yourself as part of the "cost of goods sold". Cost of goods sold is deducted directly from your gross income, and if this were the case, people would pay themselves as much as they wanted to an hour to completely offset any tax liability making it appear that they were only profitting 25 cents. It's a form of tax evasion, learn it, live it, love it!

The bottom line here is that it doesn't COST you $12.50 an hour (not to mention 30 minutes per candle is incredibly exaggerated and unrealistic). The only thing that should be calculated into the cost your final product is the materials (unless you are paying someone else to make them).

[mizbizzyb]

Um.. you include your own time at $12.50 into the cost? ROFL

I guess I dont find what is funny. Depending on my items and what I pour....I will base my cost off of an hourly rate added in. Not all of my items, but there are a few. And that rate is not for 1 candle. I can pour many candles in an hour. One of my larger accounts I base my pricing off my hourly rate plus supplies but I am pouring in bulk. So I pay myself and she gets a great rate.

There is no right or wrong way to do it.

I am not a business major either....but it works for me and my accountant.

[southern.scents]

You don't know if I have insurance or not much less anything about my business licenses. I do have insurance and the way that I pay myself is my business, not yours. You mind your business and I will mind mine.

Valhalla- forgive me if you find my remark uncalled for, though Southern is a 16 year old kid. What works for him is selling anything and everything he can, whether it is tested safe or not. Insurance is not something he posseses, therefore I doubt he cuts himself a paycheck and issues himself a W2 at the end of the year. I would be shocked if he actually has a business license. When he is attacked by others here because of his teenage ignorance (which is quite often), I am usually the first to defend him because my opinion is "his problem, not mine". In this case, I just couldn't bite my tongue as it is NOT an accurate way to calculate cost of the product and those who do this will be in for a rude awakening if audited.

I have owned a business for 12 years now and my PROFIT is what is considered my personal income. If you report all of your income and pay taxes on it annually, then you are paying into social security (as I can only assume that if he does in fact actually have a business license that he is operating as sole proprietor under his own social security number) . It works out to be the same dollar amount that goes into your pocket whether you call it "wages" paid to yourself or profit from your income. Yes, you can write off a salary paid to yourself at the end of the year to help minimize the amount of taxes that you owe, but you cannot include paying yourself as part of the "cost of goods sold". Cost of goods sold is deducted directly from your gross income, and if this were the case, people would pay themselves as much as they wanted to an hour to completely offset any tax liability making it appear that they were only profitting 25 cents. It's a form of tax evasion, learn it, live it, love it!

The bottom line here is that it doesn't COST you $12.50 an hour (not to mention 30 minutes per candle is incredibly exaggerated and unrealistic). The only thing that should be calculated into the cost your final product is the materials (unless you are paying someone else to make them).

[Late Night]

Hummm. It's a good thing some of us don't get paid what we are actually worth.

SS, you are smart for thinking about your Social Security at such a young age. Hope it's still there for you but that's another situation.

Maybe you can learn a lesson from my story. I married young and didn't work until my son started school. After almost 7 years of working to help my husband through grad school, I didn't have to work anymore. However, I did keep busy and did lots of volunteer and charity work.

Fast forward about 30 years. I'm divorced now and although D-ex is very generous and has to pay alimony, I don't have enough Social Security credits to qualify for it because I didn't work for a total of 10 years. If he remarries, I assume his new wife would collect his S.S. if he should die. Then I get nothing...including alimony.

I'm not saying this for sympathy and I'm not crying poor. But, now at the age of 55 I need to find some kind of a job or create one for 4 years to earn enough S.S. credits to 'retire'. As it is now, I don't even have enough credits to qualify for disability if I should get hurt.

So SS, do what you need to do now while your parents are supporting you and you can afford it. Paying taxes isn't fun by any stretch of the imagination but not paying can hurt you in more ways than one.

[coco]

One of my larger accounts I base my pricing off my hourly rate plus supplies but I am pouring in bulk. So I pay myself and she gets a great rate.

There is no right or wrong way to do it.

I disagree that there is no right or wrong when it comes to calculating costs where a business is involved. When you itemize your costs on your taxes, they want to know exactly what money went where. I don't know about you, but when I do my own calculations I want the ACTUAL amount of money that the item cost me to make so that I know how much I have actually profitted at the end of the year. Aren't you paying yourself for your time with your profit? I find it hard to believe any accountant who is still employed would ever suggest you pay yourself an hourly rate of whatever you see fit for the evasion reasons I mentioned above. I am confused here... Perhaps I am misunderstanding how some of you do this, so I will clarify because it seems like we are talking about apples and apples here.

Anything I sell I want to profit at least 100% for retail sales of what it cost me out of pocket. For large wholesale amounts let's just say 50%. Using his calculation minus the hourly rate, it costs $6.75 to produce the candle. In order to profit 50%, I would have to sell it for $10 (which is roughly $3.37 a candle- even if I can only pour 10 an hour that is $33.70 an hour I am earning) and the store then charges the customer $20 (as most stores will keystone). The 50% calculation is what I base my price on with my time included. Now are you telling me that you base your cost to the wholesaler on your cost plus an hourly rate (whatever you see fit) and THEN you add more to that? It is all considered YOUR earned income at the end of the year and you pay taxes on all of it, so what's the point? Again, isn't any amount you make over and beyond what it actually cost you in shipping and supplies payment for your time?

[coco]

SS, you are smart for thinking about your Social Security at such a young age.

I completely agree, and I definitely have to hand it to you for your motivation and willingness to work for your own money at your age. My 16 year old doesn't do anything but stare at MySpace all day. Now if you actually read my entire posts on why calculating paying yourself into the COST of the candle doesn't make sense, you wouldn't have taken such offense.

[Stella1952]

I disagree that there is no right or wrong when it comes to calculating costs where a business is involved.

I have kept books for several different businesses and can vouch for the amount of latitude that exists in determining "costs." There are many different ways to determine expenses (and labor is one of them), categories, etc., as well as differences based upon how a business is set up (ie. personal income, hobby business, sole proprietorship, LLC, corporation, etc.). The art of how the business is set up and the fine art of bookkeeping comes into play. How people arrive at their "costs" is varies greatly. There truly are some "wrong" (aka illegal) ways to do so, but many different "okay" (legal) ways also. There is no "one way."

[coco]

I have kept books for several different businesses and can vouch for the amount of latitude that exists in determining "costs." There are many different ways to determine expenses (and labor is one of them), categories, etc., as well as differences based upon how a business is set up (ie. personal income, hobby business, sole proprietorship, LLC, corporation, etc.). The art of how the business is set up and the fine art of bookkeeping comes into play. How people arrive at their "costs" is varies greatly. There truly are some "wrong" (aka illegal) ways to do so, but many different "okay" (legal) ways also. There is no "one way."

I completely agree with you Stella in that there is no "one way" in that it does vary greatly in how businesses are set up. And yes, how people do "arrive" at their cost does differ depending on just how much they want to manipulate the system

I do know however, that there are SEPERATE entries on a schedule c tax form for "cost of goods sold" and "labor". They are deducted differently and need to be differentiated for a reason (I know this from experience, as I was audited in the beginning and had included my employee's pay in that section-this cost me $8500). To each his own, and I'm sure nothing but owing the IRS will change the way people do things. To be honest, I wouldn't even had responded or found it so amusing had it been anyone other than SS that mentioned it. As far as what I do and don't know about you or your business SS- I've been following your lies for quite awhile now, I know all that I need to...

[debscent]

This is a tough one, based on prior posts of SS, but I see he is attempting to move forward, but the teen arrogance is sometimes easy to fall into. SS (Adam) if you are paying yourself a wage, please do this the correct way and have your business set up where you are an employee, so you can collect social security when that time comes. There is always talk about whether there will be social security in the future. But, fast forwarding through some significant steps will hurt you or your parents in the long run.

I see you are trying to make a name for yourself and promote a good business, and that is great, so many young people expect something for nothing. I think your hourly rate is a bit steep and to calculate 30 minutes of time for one candle might be over zealous. Everyone approaches business differently, but in this case, I would suggest you hire a good accountant, not just a "cheap" one. Have you set aside money to pay taxes on this income you are receiving? I work in tax law, trust me you don't stand a chance when you are on the IRS' radar.

I understand wanting to try everything that seems appealing to you, but there is some good advice on here (not all of it is good, but there is a fairly good amount of experience that you may need at some point).

Boy, this thread got hijacked in a big way! LOL!

And for that much wax, that's not a bad price for the candle. 4 Yankee jars at $23 is more!

[kandlekrazy]

Now that this has gotten way off track, I just have to add that 30 minutes per candle is not excessive if you consider every little thing that goes into it...unpacking supplies, storing supplies, washing glass, storing glass, wicking jars, heating jars, mixing candles, pouring candles, poking relief holes, heat-gun, labeling, boxing for storage, pulling from stock when sold and boxing to mail (or take to wherever selling.) I can easily see 30 minutes going into each and every candle.

[mizbizzyb]

Now that this has gotten way off track, I just have to add that 30 minutes per candle is not excessive if you consider every little thing that goes into it...unpacking supplies, storing supplies, washing glass, storing glass, wicking jars, heating jars, mixing candles, pouring candles, poking relief holes, heat-gun, labeling, boxing for storage, pulling from stock when sold and boxing to mail (or take to wherever selling.) I can easily see 30 minutes going into each and every candle.

Yup, that is why I hate pouring one candle.

[mizbizzyb]

I disagree that there is no right or wrong when it comes to calculating costs where a business is involved. When you itemize your costs on your taxes, they want to know exactly what money went where. I don't know about you, but when I do my own calculations I want the ACTUAL amount of money that the item cost me to make so that I know how much I have actually profitted at the end of the year. Aren't you paying yourself for your time with your profit? I find it hard to believe any accountant who is still employed would ever suggest you pay yourself an hourly rate of whatever you see fit for the evasion reasons I mentioned above. I am confused here... Perhaps I am misunderstanding how some of you do this, so I will clarify because it seems like we are talking about apples and apples here.

Anything I sell I want to profit at least 100% for retail sales of what it cost me out of pocket. For large wholesale amounts let's just say 50%. Using his calculation minus the hourly rate, it costs $6.75 to produce the candle. In order to profit 50%, I would have to sell it for $10 (which is roughly $3.37 a candle- even if I can only pour 10 an hour that is $33.70 an hour I am earning) and the store then charges the customer $20 (as most stores will keystone). The 50% calculation is what I base my price on with my time included. Now are you telling me that you base your cost to the wholesaler on your cost plus an hourly rate (whatever you see fit) and THEN you add more to that? It is all considered YOUR earned income at the end of the year and you pay taxes on all of it, so what's the point? Again, isn't any amount you make over and beyond what it actually cost you in shipping and supplies payment for your time?

You do yours your way and I will continue to do mine my way.

You can disagree, but I have never read a book or law for that matter that says you have to calculate 'THIS' way. I never disclosed the rate I charge per hour. You can take Adams if you want...but if I paid myself that, that is way less than I make at either of my two jobs....so I might as well just go to work instead of making candles. My hourly rate also varies amongst the customer and what how much they order. For regular retail I use a different calculation to come up the price of the candle. It has worked for me, sorry if you don't feel it should work.

What is the difference in determining an hourly rate vs doubling your cost for wholesale. If you have an wholesale order for $500 and it costs you $250 to make it and it took you 6 hours to pour, clean, label, etc....it you technically made about $41.67 an hour (that is just some figures off the top of my head).

Both of my jobs I work in Accounting so believe me I would be told if I was doing something wrong.

Just because you don't agree with it, does not mean Adam is doing it wrong let his parents guide him regarding the way.

Hell, I need to find out how to get a dayum refund (got any input on that?) in the last 10 years, we only got money back 2x. So I am pretty sure Sam is happy with me dishing out money to him every year.

[mizbizzyb]

Oh yeah.....back on track. For a good candle, whatever my budget allows - but that is just me. There are many people with a Walmart mentality or a Dollar store mentality....not that it is bad....but some folks do not believe on spending certain amounts of money on things.

I have 2 sisters like that.

[Late Night]

I completely agree, and I definitely have to hand it to you for your motivation and willingness to work for your own money at your age. My 16 year old doesn't do anything but stare at MySpace all day. Now if you actually read my entire posts on why calculating paying yourself into the COST of the candle doesn't make sense, you wouldn't have taken such offense.

I did read your entire post and I took no offense to it at all. Actually, I was addressing Southern.Scents post #25 where he was talking about building up his Social Security.

[southern.scents]

I did read your entire post and I took no offense to it at all. Actually, I was addressing Southern.Scents post #25 where he was talking about building up his Social Security.

Thanks you guys for all the help that you have given and I want to appologize to bthouse for hijacking your thread. I promise it was not intentional. I think my way of paying myself is fine and I along with other business owners will continue to pay myself this way. As my business grows and I get older, things may change and I might choose to do this differently but for now, I am gonna stay where I am. Thanks again.

[coco]

What is the difference in determining an hourly rate vs doubling your cost for wholesale. If you have an wholesale order for $500 and it costs you $250 to make it and it took you 6 hours to pour, clean, label, etc....it you technically made about $41.67 an hour (that is just some figures off the top of my head).

I apologize as well for the hijack! I didn't intend to start an argument and this will be my last post on this particular subject..

Miz, this is EXACTLY what I was trying to say in my post. Like I said, apples and apples- there is no difference if you do it one way or the other. And yes, how you figure that amount in your mind is personal preference in that regard. I was trying to determine if you did both (i.e. included an hourly wage into the cost to produce the item PLUS adding a profit, which is what SS said he was doing and makes no sense). My initial point before we started getting into tax issues, was that if attempting to figure how much of a profit you will make on an item (in your own mind), calculating your own hourly wage into your costs doesn't work as it isn't an accurate figure. It would make more sense to say "Ok I've got $6.75 out of my pocket into this candle. I would like to make $6.25 for my time, so I need to sell it for $13". Not "This candle cost me $13 (because it didn't) so I need to sell it for $20. I hope that makes more sense...

[coco]

This is a tough one, based on prior posts of SS

The prior posts are what made this hilarious to me initially Deb, apparently those who came to defend the issue aren't familiar with "its" situation. Must....learn...to...ignore...it....

[bthouse]

Thanks you guys for all the help that you have given and I want to appologize to bthouse for hijacking your thread. I promise it was not intentional. .

No problem :smiley2: I didnt realize it would get so much response and diversity lol

I just posted on a whim as I found the candle online as I had seen Colin Cowie and Oprah talking about these candles.

As always, this board is very informative and very interesting to read everyone's opinion.

Happy Holidays everyone.

Kathy

[southern.scents]

The prior posts are what made this hilarious to me initially Deb, apparently those who came to defend the issue aren't familiar with "its" situation. Must....learn...to...ignore...it....

I really don't appreciatly being reffered to as "it". You have permission to call me Adam, SS, Southern Scents, Southern.scents, He, him, but I take offense to "it".

[coco]

I really don't appreciatly being reffered to as "it". You have permission to call me Adam, SS, Southern Scents, Southern.scents, He, him, but I take offense to "it".

I'm afraid I don't need your permission to call you anything. You brought the lack of respect upon yourself by telling everyone you were a older woman, then a kid, then a male... who even knows. Your posts are always one contradiction to your story after another. Personally, I take offense to someone who comes on a public forum and consistently lies. At first I felt sorry for you, now I just find it annoying that I constantly have to read through your BS when trying to find information. I will not be referring to you as anything in the future, as I don't enjoy the hostility you bring out in me. This topic is over.

[Stella1952]

I'm afraid I don't need your permission to call you anything. You brought the lack of respect upon yourself by telling everyone you were a older woman, then a kid, then a male... who even knows. Your posts are always one contradiction to your story after another. Personally, I take offense to someone who comes on a public forum and consistently lies. At first I felt sorry for you, now I just find it annoying that I constantly have to read through your BS when trying to find information. I will not be referring to you as anything in the future, as I don't enjoy the hostility you bring out in me. This topic is over.

Could we please stay relatively on-topic and not bring other disputes from other threads into the fray? Dredging up old disputes makes threads extremely hard to read and comprehend... JMO... :tiptoe:

[coco]

Could we please stay relatively on-topic and not bring other disputes from other threads into the fray? Dredging up old disputes makes threads extremely hard to read and comprehend... JMO... :tiptoe:

Yes Stella, hence the

Quote:

Originally Posted by coco This topic is over.

I apologize for the hi-jack once again all

[islandgirl]

I'm afraid I don't need your permission to call you anything. You brought the lack of respect upon yourself by telling everyone you were a older woman, then a kid, then a male... who even knows. Your posts are always one contradiction to your story after another. Personally, I take offense to someone who comes on a public forum and consistently lies. At first I felt sorry for you, now I just find it annoying that I constantly have to read through your BS when trying to find information. I will not be referring to you as anything in the future, as I don't enjoy the hostility you bring out in me.

AMEN!!!! WELL PUT!!!

[mizbizzyb]

Happy Holidays?????? :tiptoe: