Question about packaging candles for customer

[cybersix]

Hi all, my customer would like to start a production of soy candles, I'll be the candlemaker. we're talking about 5000 candles per year, I already gave them a quote, what I didn't know was that I have to package candles as long as I'm making them. They'll provide glasses, caps for glasses, boxes, and labels. So I need to give them another quote including prices to pack up everything. I was thinking to add 10-15 cents for each candle, is it too cheap? is it too much? What should I do in your opinion?

TIA

[Amylynn]

Hi Sabrina, basically you now have to charge for your labor. So what I would do is figure out how many candles you can package properly and fully in one hour.

If you want to be paid say 12.00 an hour for labor and you do 12 candles I'd charge a dollar a candle for packaging.

[cybersix]

thanks, but I really don't know how many candles I can pack per hour. Candles cost are set.

They told me package is simple, a box to close and one label per candle.

So now I'm trying to figure out something acceptable, both for me and the customer.

[sockmonkey]

You should ask for a sample of the box and the label. It might sound dumb, but the difference in boxes and labels can affect the speed with which you can work with them and therefore, affect your profits.

Most regular boxes will arrive flat and require you to manipulate both ends to close it. There are other options though and one of them could be a box that would require you to glue flaps on the bottom or top, which would require more effort and more time.

How many labels are they giving you to apply to each candle? Labels could arrive on a roll, a sheet, or might be loose. They might have a crack and peel back on them, which is easy to use, or they might not, which could slow down your packaging process.

If for some reason they can't provide you with samples, you can go through the motions without them and time yourself. If, for example, it took you 20 seconds to package one candle, that means you should be able to pack 3 in minute, or 18 an hour. If you give yourself a wage of $10 an hour, that would give you a labor cost of .55¢ per candle to package it.

Is that too much or too little? I can't say. If you're wholesaling your candles for $6 each, it amounts to about 9% of the cost. To me, that sounds reasonable; but if you're wholesaling them for $3 each, the amount goes up to 18% which sounds like too much.

The determining factor in this is how much you should be paid for that particular aspect of the job. In my part of the country, someone performing that type of job would probably only be earning around $7-$8 per hour, not $10, so that really drops the price per unit substantially if you lower the wage. In your area, perhaps the numbers you gave are good ones. Just do the equation using wages appropriate for your area and you should be fine.

[southern.scents]

Hi SM,

Your math is just a little wrong. If you can do three candles per minute at $12 per hour then your would add about .06-.07 cents per candle.

As SM said, you should get samples of the packaging and just see what the difficulty level will be.

You should ask for a sample of the box and the label. It might sound dumb, but the difference in boxes and labels can affect the speed with which you can work with them and therefore, affect your profits.

Most regular boxes will arrive flat and require you to manipulate both ends to close it. There are other options though and one of them could be a box that would require you to glue flaps on the bottom or top, which would require more effort and more time.

How many labels are they giving you to apply to each candle? Labels could arrive on a roll, a sheet, or might be loose. They might have a crack and peel back on them, which is easy to use, or they might not, which could slow down your packaging process.

If for some reason they can't provide you with samples, you can go through the motions without them and time yourself. If, for example, it took you 20 seconds to package one candle, that means you should be able to pack 3 in minute, or 18 an hour. If you give yourself a wage of $10 an hour, that would give you a labor cost of .55¢ per candle to package it.

Is that too much or too little? I can't say. If you're wholesaling your candles for $6 each, it amounts to about 9% of the cost. To me, that sounds reasonable; but if you're wholesaling them for $3 each, the amount goes up to 18% which sounds like too much.

The determining factor in this is how much you should be paid for that particular aspect of the job. In my part of the country, someone performing that type of job would probably only be earning around $7-$8 per hour, not $10, so that really drops the price per unit substantially if you lower the wage. In your area, perhaps the numbers you gave are good ones. Just do the equation using wages appropriate for your area and you should be fine.

[sockmonkey]

Whoa! Thanks for pointing that out--I guess I didn't hit that zero on my calculator hard enough! At the rate I gave of $10 per hour, that equals .05¢/.06¢ rounded off.

Regardless of my numbers, if she conducted the process to arrive at the numbers she gave, she should be fine. Pulling numbers out of the air isn't cool (but obviously, just as effective as when you give bogus figures like I did).

[cybersix]

Thanks to everyone.

Today I asked for samples of boxes, labels for each type of candle. I hope they will send something quick.

I made prices based on my labor and my supplies, I don't know how they will sell the candles. They are a big home decor and SPA company, they sell almost worldwide, I can't check exactly their retail prices. Also, this is a brand new product for them, so there's no way for me to find out what the final price will be.

For example the smallest candle is 1.4 oz and I'm going to charge 0.90 each. That's without packaging, of course.

I only provide wax and wicks, so FOs and tumblers don't fall in my calculations.

Still confused because they changed things on the run, also they stated we could start in january but changed their mind and want to start with some hundreds to show at a big commercial fair.

Thanks

[southern.scents]

Make sure you get full payments before starting production.....