Pricing

[Holly]

I understand how the Walmart stores and stores of that type can afford to sell scented products at a very low price, but I don't know how some of the small home candle businesses do it. To me it would be a lot of work in order to make much at all. You would have to pump out the volume in order to make much and that to me can mean hours and hours of work if you do not hire any help for hardly a profit. How do they manage this? I have been searching the web for online marketing ideas and I have noticed several small home based candle companies offering decent products for a very low cost. I have never charged as much as some say I should charge but I sure don't want to go too far the other way to where I am making pennies if anything at all in the long run for the amount of work that is entailed. If I want to market strongly online, how can I compete with this? i.e. Etsy.....some vendors have really low pricing and may also eat some of the shipping as well. Not sure how they work this.

Edited June 13, 2012 by Holly

[David Fields]

It starts with volume selling. When you are selling enough to justify buying raw materials in larger quantities (lower cost), then you try it. Lower costs, higher profit.And so on. You also have to look at where your costs are and what increase in ordering will net you. For us, wax is as cheap as we can justify at the pallet rate. The next price break does not equate to greatly reduced costs per candle. Or not enough to justify the outlay. Tart clamshells, on the otherhand, definitely justifies the increase in ordering. At the 10, 000 unit level our cost is 12.1 cents, including shipping. We don't sell enough yet to justify the next price break. Same with jar labels. 10,000 labels are 5.4 cents each. And so on... So, look at each component to your products to see if increased buying will significatly lower costs. Again, the sales have to be there first.

[Holly]

It starts with volume selling. When you are selling enough to justify buying raw materials in larger quantities (lower cost), then you try it. Lower costs, higher profit.And so on. You also have to look at where your costs are and what increase in ordering will net you. For us, wax is as cheap as we can justify at the pallet rate. The next price break does not equate to greatly reduced costs per candle. Or not enough to justify the outlay. Tart clamshells, on the otherhand, definitely justifies the increase in ordering. At the 10, 000 unit level our cost is 12.1 cents, including shipping. We don't sell enough yet to justify the next price break. Same with jar labels. 10,000 labels are 5.4 cents each. And so on... So, look at each component to your products to see if increased buying will significatly lower costs. Again, the sales have to be there first.

Thanks, David. I definitely understand what you are saying and agree with you. I am pretty sure that these people are not at the point where they can buy in large enough quantities as you are talking about, especially with the amount of fragrances they offer. Even companies that are selling in high volumes and can order supplies in large quantities to cut cost, are selling their products for a lot more and even more than me. Maybe many of these small home based candle makers are not doing it seriously for a good profit or are keeping the prices low now and working for pennies in hope to grow a big customer base and then move up in price later with more to offer, etc. Not sure.

Edited June 13, 2012 by Holly

[blacktieaffair]

David is so blessed to be at a point where he is able to do what he was describing!!!!

I on the other hand, probably at this point, in this economy and in my area, probably sell my TPs for a little less than I actually should ( ok yes, I do, it';s not a probably it's an actually )

The reason for this , is TP is still considered something that no one has heard of and it definitely has a shelf life. I can't afford for one to sit on the shelf for 2 months because it only goes off CT and the scent starts fading.

I also have the discretion of making these are "fancy" or "plain" as I want, but I always buy my goodies as cheap as I can ( have yet to reach Davids "ordering" level )

I also live in an area where there are a lot of tourists ( mountains ) and they see "lye soap" and tend to forget about MP lol so I sell each bar probably about .50 less than the other soaps around here.

For me, at this point, I know that I'm not making the profit I need to be making, but I'd rather turn stock, than have it sitting there waiting on that big sale LOL. I am a teeny tiny almost not there kinda sales level business, and it was a hard call to make about "selling myself short a little" because that's really what I am doing. But with the above factors stated (economy, competition, area, lack of big business, somewhat perishable products)... I have to lower my prices enough to get people interested and move stock.

HTH

David....... I wanna be you !! 10,000 clams ?? shew!

[SliverOfWax]

My best advice to you, Holly, is to do your best to ignore those who sell for practically nothing. They probably won't be around next week or next year. Or it's just a little hobby they indulge in because someone else pays the living expenses, i.e., husband or government entitlement check.

I'm convinced most crafters who sell have no idea how to figure their costs. I've seen people ask questions such as wondering if they should include shipping charges on wax or jar delivery in the cost. Those who can't figure their costs, including labor, electricity, etc, will never be profitable and are not my competition, thankfully.

I guess what I'm trying to say is don't undercut yourself. For me, my repeat customers allowed me to keep my prices above those who were here today, gone tomorrow.

[Holly]

David is so blessed to be at a point where he is able to do what he was describing!!!!

I on the other hand, probably at this point, in this economy and in my area, probably sell my TPs for a little less than I actually should ( ok yes, I do, it';s not a probably it's an actually )

The reason for this , is TP is still considered something that no one has heard of and it definitely has a shelf life. I can't afford for one to sit on the shelf for 2 months because it only goes off CT and the scent starts fading.

I also have the discretion of making these are "fancy" or "plain" as I want, but I always buy my goodies as cheap as I can ( have yet to reach Davids "ordering" level )

I also live in an area where there are a lot of tourists ( mountains ) and they see "lye soap" and tend to forget about MP lol so I sell each bar probably about .50 less than the other soaps around here.

For me, at this point, I know that I'm not making the profit I need to be making, but I'd rather turn stock, than have it sitting there waiting on that big sale LOL. I am a teeny tiny almost not there kinda sales level business, and it was a hard call to make about "selling myself short a little" because that's really what I am doing. But with the above factors stated (economy, competition, area, lack of big business, somewhat perishable products)... I have to lower my prices enough to get people interested and move stock.

HTH

David....... I wanna be you !! 10,000 clams ?? shew!

I definitely hear where you are coming from. It can be a catch 22. I guess I will stick to a good balance and try to use common sense and see what can happen this time around....going to do things a little differently this time.

[Holly]

My best advice to you, Holly, is to do your best to ignore those who sell for practically nothing. They probably won't be around next week or next year. Or it's just a little hobby they indulge in because someone else pays the living expenses, i.e., husband or government entitlement check.

I'm convinced most crafters who sell have no idea how to figure their costs. I've seen people ask questions such as wondering if they should include shipping charges on wax or jar delivery in the cost. Those who can't figure their costs, including labor, electricity, etc, will never be profitable and are not my competition, thankfully.

I guess what I'm trying to say is don't undercut yourself. For me, my repeat customers allowed me to keep my prices above those who were here today, gone tomorrow.

Thank you for your encouragment. What you have said is what my common sense tells me. The reason why I have been thinking about this lately is because I am going to do things a little differently this time and have been considering working the net a little harder this time around. My main issue that I had when I was in the biz for 5 years before was I developed a very time-consuming main candle line (pure soy headaches). I am a perfectionist with this type of thing so that made it even worse for me. As much as I liked them and my customers liked them, I cannot have that same line anymore. It took too long to pump them out so I was only able to do what I could do and did not want to market too heavily in fear of not being able to keep up. I was busy enough as it was and it ended up being WAY too much work for the lack of profit. I needed my life back. I was spending too much as well wanting this and that, which many crafters have trouble controlling. The jars were too expensive, which ate into the profit. I learned a lot and know what I will not do this time around and what products I will not offer again. I must control my spending. I am developing a new wicked candle line but it will be an easier line to produce but still will be attractive and of good quality. Actually, the two years that I was not in the biz, I grew to love the wax melts more so than before and in some ways I like them better than wicked candles. I want to offer both though and still do like candles.

Thanks again for your advise. I respect your opinion. Hope all is going well with you biz!

Edited June 14, 2012 by Holly

[SliverOfWax]

Have you considered wickless candles in something like a tureen jar? I added wickless about 6 or so years ago, thinking I would have to spend all my time explaining why the things didn't have wicks. That was not the case. They took off like crazy and far outsold candles with wicks. As of now, it's about 50/50, but people who have already bought the hotplate warmers, which I also sell, love their wickless candles. And really, there's no testing involved, to speak of. You know when the concoction is in the pour pot whether it's gonna throw. I tested only for purposes of having an idea how long the scent would last, much like testing tarts, but since there are so many variables (wattage of warmer, air movement in room, etc), even that testing was just for my own amusement.

I made most of my wickless in 6 oz tureens. They hold a little over 4 oz when poured to the neck. In the beginning I used 4 oz masons. Both sell for $8.

Wickless is just a suggestion if you want to pound them out in a hurry.

[SliverOfWax]

BTW, Holly, look at this. I have a ton of these saved, but I think this is my favorite:

[Holly]

Have you considered wickless candles in something like a tureen jar? I added wickless about 6 or so years ago, thinking I would have to spend all my time explaining why the things didn't have wicks. That was not the case. They took off like crazy and far outsold candles with wicks. As of now, it's about 50/50, but people who have already bought the hotplate warmers, which I also sell, love their wickless candles. And really, there's no testing involved, to speak of. You know when the concoction is in the pour pot whether it's gonna throw. I tested only for purposes of having an idea how long the scent would last, much like testing tarts, but since there are so many variables (wattage of warmer, air movement in room, etc), even that testing was just for my own amusement.

I made most of my wickless in 6 oz tureens. They hold a little over 4 oz when poured to the neck. In the beginning I used 4 oz masons. Both sell for $8.

Wickless is just a suggestion if you want to pound them out in a hurry.

Thank you. I did sell wickless candles. I started off selling them in the tureen jars and then went to the metal tins. I liked that the tins got hotter and melted the wax faster for a faster throw and were lighter for shipping. The tureens are way prettier though. I had a nice label going around the tins but the glass is still prettier. I love the tureen jars. They sold really well, and you are right, you can pump them out and way less work to create. I get so sick of wicking and wicking issues. I also offered the clamshell melts and decided this time around to only offer these and single sample melts. During my time off, I ended up liking the melts better than the wickless. I guess it is personal preference. I get the same results with 1 to 2 cubes (depending on the size of the warmer) each melting session without melting more wax and fragrance than necessary. Although, before, I did not like messing around with getting the wax out of the dish, so at that time I thought customers would prefer wickless as I thought I did. Since Scentsy has become a big hit, there are so many people that are accustomed to changing out wax whether they freeze it or pour it out or if it is hard enough it will pop right out after it solidifies. If my past customers ask for the wickless back, I will definitely consider it.

I thought what I would do is offer limited addition specialty melts per season.....to make it more fun than just offering the plain clamshell melts only. This will also satisfy my creative side but will not be too difficult or a pain to pump out. I tend to make things a little complicated, and I have to watch myself this time around. I am very detailed with anything visual and can drive myself nuts! I already started to think about cupcake candles and I stopped myself...wicking will be a pain in the butt. I think gourmet bakery candles would be easier, but I need to take this one day at a time. My creative side always want to do this and that but to be serious with a biz you gotta balance it and do things when the timing is right.

Thanks again!

P.S. Nice picture of your wickless tureen jar.

[Holly]

BTW, Holly, look at this. I have a ton of these saved, but I think this is my favorite:

Thanks so much, Joyce, for posting this. I have seen this before but I never get tired of seeing it. It brings tears of joy to my eyes. I love all horses but the big boys hold a special place in my heart and since I have had Clyde, I am very partial to Clydesdales. He is very kind and I love him to death. We had a hoof issue that was diagnosed last April and it was a very long haul and took a lot of dedication on our part to get him better, not to mention vet bills. We are at the end of it. It took four surgeries (major hoof debridement) on the right front and 6 on the back. He still has the hospital plate on the back hoof. We have maybe another 2 weeks or so. He cannot get it wet. He developed Equine Canker (long story) and it was so deep in the back hoof that the whole frog and one half of his hoof on the underside had to be dug out. It is taking a long time for it to completely grow back. There is a small part that still has not completely cornified and that is what we are waiting for....still weeping cells out. He has been a trooper through all of this. If he was not easy to deal with there is no way we could have dealt with this. The front was over with last Summer but we have had to continue with the back hoof this whole time. It was a year ago April 6 that he had his first surgery. What a long haul. They even have a Yahoo Equine Canker board where horse owners can talk and support one another and give off ideas of treatments. Usually, surgery and after treatment is needed. It is very hard to conquer but it looks like we did it! Major dedication..cleanings, redressings, replacing the plates, daily walks. When it is wet he is in the barn with the whole breezeway and his stall. I am with him a lot and we walk and even jog together.

Thanks again for sharing.

P.S. They do not know for sure what causes Equine Canker but draft horses are more vulnerable to it. Wet conditions make it worse. We can get really wet muddy springs in the part of the horse area and the previous owner said they had a really wet spring the year I got him.....took a year for us to figure out what was going on....often misdiagnosed until it is obvious. I did not even know what Equine Canker was and many vets are not well studied on it. It is not common in this area. He is from OK (northeast side) and after I got him, one thing led to the other, but it is too complicated to explain here.....I just noticed things about him. They had him on a high carb diet (sweet feed and corn as his supplement) which is not a good thing for any horse and especially a draft horse and one that is not worked enough. It can lower their immune systems.

Edited June 14, 2012 by Holly

[SliverOfWax]

Sounds like you rescued Clyde from a not-so-good situation. I can't imagine the work and expense treating an ailing Clydesdale. Goodness, dogs are hard enough.

I know what you mean about tears of joy. I recently figured out how to burn YouTube videos and I've burned a bunch of short Clydesdale and Budweiser videos to watch when I'm at my store. Sometimes I have to stop watching for fear a customer will come in and I'll have to explain why I have tears on my cheeks. I could watch Budweiser Clydesdales all day. There's absolutely nothing better than the original Budweiser commercial, imo. I shouldn't get started on this. I'll spend the entire day poking around, lol.

[Holly]

Thanks.....LOVE the videos. I too can watch them all day. I would be the same way if I were watching them where customers could come in. Do you have a candle store?

The gal that I got him from takes care of their horses but she obviously is not well studied on diet, especially for draft horses. She just does not know. I did not know as much as I do now until I got back into horses in 2000 as an adult....studied up on things over the years since then. You never know everything and there is always something to learn. Sometimes you learn the hard way.

I was very fortunate to find a vet in the area that not only would tackle the situation (my original equine vet did not want to take it on and wanted to send me to Pullman - WSU Veterinarian Hospital), but was also a former Budweiser Clydesdale farrier while putting himself through vet school in CO. He also drove the sleds. I could not have gotten more fortunate to find him. If I had to go to the hospital that would have been a pain in the butt...had to keep going back after each debridement. The canker would appear again but each time it would reappear, it would come back slower and smaller....it is common for it to reappear after surgeries....hard to conquer. There is something that I believe the vet should have done from the get go which I did not talk him into until we were desperate...involved an antibiotic. Since he waited so long to put him on it, I do not know for sure if that is what ended it on the back hoof or if it would have ended anyway. Some vets say it should be used and others say it is not necessary....read up on it online.

Pullman is a drive. Who knows, maybe if the hospital took it on, they could have gone deeper the first time around because they could have had him out longer with the right equipment for safety. But, it is hard to say. I have had to go to Pullman before to the hospital and it brings back very sad memories and they milk you. Clyde's vet recently moved right down the road from us to a brand new facility and they now have a hospital bed big enough for Clyde and most likely upgraded to hospital equipment that can sustain a larger horse under anesthesia for longer periods...more risk is involved with the draft horses when under anesthesia because of their size. They had to do his surgeries in the pasture. The thing is, we can't afford anymore surgeries, but I have faith all is well, and it won't return ever again! I have to think this way. I will never feel confident to let him be in the wet Spring muck which is not avoidable with horses...always an area that turns mucky in the Spring. He may be vulnerable to this type of thing. Good thing we have a big barn!

One of WSU's top surgeon's quit WSU and is working for them now. It is a partnership Equine Clinic. I could ride Clyde and my other horses there to get their yearly checkups! lol

Sorry this got a little long...really got to rambling. Thanks again to chatting with me about this. It is funny how this post turned into a horse post, which is fine with me!

Edited June 14, 2012 by Holly

[EnvyCandles]

There are a few candle businesses in my area that are absolutely thrilled with making a small profit during shows. I know one family to takes about 4-5 adults to each show (even the small ones!) and they all stay there all day. Some of the show fees are about $40 or so, and they are very happy if they sold $100 in products for the entire show.

That $100 in sales, minus the show fee of $40, minus their expenses of material cost (not all that $100 is profit), taking into consideration of any costs for the day such as gas, time, any food purchased at or for the show....

That is simply not enough money for me to be there for that many hours, not to mention all of the prep time! Clearly after show sales are a plus, but, it is difficult for me to justify all that time and prep time, to make not even a profit of $60 for the day... hourly that is just a few dollars an hour!

I understand if these sellers are content with making such a small amount, if that is what they are looking for, but I cannot afford to put so much time and effort and testing to make such little money.

[TallTayl]

I'm with you Envy and SOW. Most people have absolutely no idea what their material costs and overhead are.

Certainly many are hobbyists that must have other sources of income to support the family. Or they just need some great ta write-offs.

Hobbyists are not my competition. They come and go. In the end it takes money to run a business and real profit to keep it healthy.

I often wonder if the 'too cheap' sellers are insured for product liability.

[EnvyCandles]

I often wonder if the 'too cheap' sellers are insured for product liability.

The particular 'business' does not use warning labels on ANY of their products and make some wild claims about their products! I do not consider them to be competition, either. It is a joke of a 'business'...

[SliverOfWax]

There really is absolutely nothing you can do about those people. They are everywhere. It doesn't matter if it's candles or jewelry or baby bibs. Someone is always trying their hand at making and selling something, and by this time next year, they'll be off on other projects. To try to compete with their prices will drive you crazy. It's important to tell potential customers why your candles are the best. You can do that without dissing the other person.

I'm glad I don't do craft shows anymore. To answer you, Holly, yes, I have a store in a local historic mall. I have my candles and B&B, plus Dept. 56, Just The Right Shoe, I trying to get a hand-made quilt inventory built up, and I've started making the Starbella scarves some of us were talking about in the craft section. Just a bunch of stuff, and I'm always looking for something new to make, like purses, belts, something. I thought I would have time to make more stuff when I retired, but the older I get, the slower I move.