Wholesale, How much to charge

[tam1116]

How do you figure what to charge for whoesale. I charge $12.00 for my jar candles, what would I charge for wholesale? Any help is appreciated.

Tammy

[darrell]

How do you figure what to charge for whoesale. I charge $12.00 for my jar candles, what would I charge for wholesale? Any help is appreciated.

Tammy

based on your $12.00 retail price i would assume your cost is around $4.00 (from what i gather retail is cost x's 3) . Wholesale cost is usually cost X's 2, so I would say $8.00 wholesale. Just curious what type of candle these are .

[tam1116]

thanks for your reply, I make soy candles. would it be best to set a minimum dollar amount per order or so many candles per order

Tammy

[darrell]

thanks for your reply, I make soy candles. would it be best to set a minimum dollar amount per order or so many candles per order

Tammy

Well Tammy , I would think that is up to you to be honest, I myself am new at this and the info i passed on to you is the info that I have have gathered off of the boards and the ton of other research that I am have done and am still doing What size jar candle are they , I am just curious .

[RichardLOZ]

Hi Tammy

Start with your base cost and then go from there. Typically wholesale is 2 x cost, sometimes a little more depending on what you can command in your area. For us wholesale is about 2.2 x cost, markets is about 3.2 x cost and retail is 2 x wholesale. Using my example if your base cost was $4 (total cost to produce) wholesale would be $9 ($8.80 rounded up), at markets we would most likely sell for around $13 and retail would be $18.

It really depends on your product and what you can get for it. Some of ours we can get 3 x or 4 x cost at wholesale and others only about 1.8 x cost, so each product is different in the margins that we can achieve.

In the business thread somewhere I have uploaded an excel spreadsheet which will help you to work out all of your costs, from manufacturing through to wholesale / retail.

HTH

Edited July 17, 2011 by RichardLOZ

[darrell]

Hi Tammy

Start with your base cost and then go from there. Typically wholesale is 2 x cost, sometimes a little more depending on what you can command in your area. For us wholesale is about 2.2 x cost, markets is about 3.2 x cost and retail is 2 x wholesale. Using my example if your base cost was $4 (total cost to produce) wholesale would be $9 ($8.80 rounded up), at markets we would most likely sell for around $13 and retail would be $18.

It really depends on your product and what you can get for it. Some of ours we can get 3 x or 4 x cost at wholesale and others only about 1.8 x cost, so each product is different in the margins that we can achieve.

In the business thread somewhere I have uploaded an excel spreadsheet which will help you to work out all of your costs, from manufacturing through to wholesale / retail.

HTH

Thanks for that post, I was under the impression that retail was 3 x's cost not 2 x's wholesale. Learning something new everyday.

[Noodle]

I was under the impression that retail was 3 x's cost not 2 x's wholesale. Learning something new everyday.

I do not think that anything is etched in stone. I have never followed any strict wholesaling rules. Cost is not the only factor. Time is also a factor, and time is money. I think that you have to be competitive and have one heck of a product that cannot be found elsewhere. Unique scents, catchy packaging, etc... It really does depend on your product and what you can get for it.

[Candybee]

Exactly. Typically wholesale is 2x your total cost per item. So if your candles cost $4 to make you would wholesale at $8. Keeping in mind that the store will turn around and sell them at 2x what they purchased at wholesale. So the store will retail them at $16.

So you have to do your homework and research the market in your area. What are candles selling for? Is yours at a competive price? Same quality or more upscale?

For me I had to wait a couple of years before I could start wholesaling my candles because I could not keep the price down to what is selling locally. Plus I took the time to improve my candle making, product image, and marketing. I also had to build my business and buy larger quantities to keep cost down in order to be able to wholesale.

Edited July 18, 2011 by Candybee

[ScentsofHeaven]

Remember you have to crawl before you walk and walk before you run!! It takes time to get the best for the best. Oh yeah and know your market!!

[Candybee]

BTW-- on my wholesale orders I allow customers to mix and match scents but they have to order candles by the case. I have no other minimum. I may change it later but for now this method is working and customers feel they get more bang for their buck because the can order more scents. I feel if they can't order at least a full case of candles why should I give them wholesale prices?

[jonsie]

What about labor costs? Do y'all typically factor in the cost of paying someone else to make the candle for you? Or do you waive the labor when calculating your wholesale/market/retail prices? This is what has completely confused me. Sometimes I need help with candle jobs so I'll ask the neighbor's son or I'll ask the babysitter to come over and help. Do y'all have any idea what a babysitter charges per hour here in Perth? $20/hour!!! Factor that into the price of a candle, and it is astronomical.

[darrell]

What about labor costs? Do y'all typically factor in the cost of paying someone else to make the candle for you? Or do you waive the labor when calculating your wholesale/market/retail prices? This is what has completely confused me. Sometimes I need help with candle jobs so I'll ask the neighbor's son or I'll ask the babysitter to come over and help. Do y'all have any idea what a babysitter charges per hour here in Perth? $20/hour!!! Factor that into the price of a candle, and it is astronomical.

Wow, either i'm coming to make candles with you or babysit in Perth

[Candybee]

I already factor in an overhead % to cover misc. expenses including my time and labor, storage, label ink.... etc. This is why its important to work out your expenses and make sure you have an item that is wholesalable. If you don't have an accurate handle on your expenses you should not think about wholesaling.

[Whisper Girl]

Candybee - I have been working on my wholesale pricing. Can you give me a range in percentage as to what profit is acceptable? In other words, after cost, should you expect to make somewhere around 30% profit when wholesaling? I believe that was a number I learned many years ago in college, but I'm not sure. There is a point where it is not reasonable to sell wholesale because there just is not enough profit. A little guidance would be appreciated.

[jonsie]

Thanks, all of this is helpful.

I use a spreadsheet to tally everything and break down all of my costs, etc. When I first got started, I had read somewhere on here that Retail was 4x Cost, and Wholesale was half of retail (inline with what y'all are saying). So that is how I calculated my retail price, but labor was always a booger. I had been making wooden wick candles, and those require extra time to wick each one. Add that labor in x 4 (oh yeah, I looked up the minimium wage for Western Australia ~~ $15/hour) and my price blows up.

So when tallying up your prices, do you do it this way:

Wholesale = [(Unit Cost) + (Labor)] x 2

Retail = [(Unit Cost) + (Labor)] x 4

or

Wholesale = (Unit Cost) x 2 + (Labor)

Retail = (Unit Cost) x 4 + (Labor)

I really appreciate your input on this. This has been bugging me for a long time.

[Candybee]

I don't factor in my labor cost per se. I add a % to my candle cost to cover my overhead and labor. If I added my actual labor hours the price would be rediculously expensive. So my wholesale price is 2x my candle cost plus overhead. If you are treating your candle biz as any other business you have to factor in your annual expenses along with your candle costs; taxes, licensing, labor, storage, travel, utilities, etc., etc. These extra expenses can add up so if you don't factor them into your costs all your sales will be eaten up and you have nothing left or are operating in the red.

How much your biz expenses are depends on how you run your biz. If you are unsure get together with your accountant and figure out what % of your expenses need to be factored into your sales.

[barncat]

for a true cost you should include labor, packaging, marketing/advertising, electric, insurance in your cost of good sold. You cant alwasys go by 2x or 3x or 4x. Consider market and competition factors as well. I have items that cost me $1.00 to make but I wholesale for $4 and retail for $8.

[MissMori]

Then there's the 3.5 X cost figure.

Everyone along the way is going to add on their profit. If you can sell 1000 candles for 2x cost, but only a few at 4x cost, which is of more value to you? Where is the greater profit for you? Where is your time better spent? Don't price your self so low that you don't make a profit or so high that you price yourself out of the market. The message being, know your market.