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  1. #1
    Join Date
    Oct 2011
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    Robesonia, Pa., USofA
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    Default How do you set your wholesale price?

    I have been asked recently by someone in marketing if I would be interested in selling my ironwork through some select stores that offer artisanal work.
    Sounded great till I realized they want it for 50% less than my retail.
    I said no way, I'm not a machine and my work is made one piece at a time.
    May as well give it away for 50% off retail.

    So, I'm taking the same approach with beekeeping.
    Last year an organic food vendor in a local farmers market and a stand-alone semi-large produce stand ask to carry our honey. Both of these places are in my area but far enough apart that they won't compete.

    I've been reading through the many threads on wholesale honey and am just not finding answers.

    I'm not looking for a price from any of you to set for our honey but rather what criteria do you use when setting your own prices?

    Are there a minimum number of cases for a store to purchase?
    Do you cut your retail pricing in half to get the wholesale price?
    Or do you reduce the retail pricing by a certain percentage?

  2. #2
    Join Date
    Nov 2011
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    Rader, Greene County, Tennessee, USA
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    6,190

    Default Re: How do you set your wholesale price?

    You may be interested in sqkcrk's posts in this thread:

    http://www.beesource.com/forums/show...ght=case+price

    If I was selling your ironwork, I'd consider a sliding discount for wholesale buyers. The percentage off retail goes up as the volume they purchase goes up. Perhaps start with 30% for two or three piece minimum purchase and work up to 50% with a high enough volume. Do you want to spend your time schmoozing potential customers, or making more iron? Which do you get a better return from?
    Graham
    USDA Zone 7A Elevation 1400 ft

  3. #3
    Join Date
    Jan 2011
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    Athens, OH
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    2,698

    Default Re: How do you set your wholesale price?

    Try for the highest price you can get while looking them in the eye and keeping a straight face.
    Politics is the entertainment branch of industry. -Frank Zappa

  4. #4
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    May 2009
    Location
    Flora,IL
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    2,644

    Default Re: How do you set your wholesale price?

    Generaly you can assume retail is around 60% more than wholesale. since most wholesale on honey is around 2.00 the retail is around 5.... we sell our honey retail, but we have to work more. we run deliveries, bottle, and market it. all that takes time and money. Some people who are good ata sales get 8-9 a pound... thats fine... all up to how much you have. I think if you sell all your honey in less than 9 months, you must be too cheap. I like my price to be high enough the honey last all season....

  5. #5
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    Jan 2011
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    Athens, OH
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    2,698

    Default Re: How do you set your wholesale price?

    A lot depends on how much you have and how much effort you are willing to put in to move it. I'm getting $7 for 1lb plastic (or $5 to resellers). Also been getting substantially more for fancy glass containers resold in gift shops.
    Politics is the entertainment branch of industry. -Frank Zappa

  6. #6
    Join Date
    Oct 2011
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    Robesonia, Pa., USofA
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    Default Re: How do you set your wholesale price?

    Rader, that is the tough thing about handmade items. Not being a machine, 50% is a big chunk to lose even with a large minimum.
    Definitely like hammering iron but meeting the customers gives me a break sometimes.

    Thanks cg3, I can look 'em in the eye and deliver. LOL
    By fancy glass do you mean hexagonal jars or a variant of that?

    gmcharlie, what kind of honey and how much of it gets the $2/lb price?
    If I did my math correctly, $3.20 is 60% less than $8.
    The $3.20 wholesale price is a no-go for me.
    When you mentioned about selling all your honey in 9 months, what poundage amounts were you thinking about?


    I forgot to mention that we'll be selling honey at some of the artisan shows we attend and will have exposure to additional customers that way.

  7. #7
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    Sep 2011
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    Reno, NV
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    3,012

    Default Re: How do you set your wholesale price?

    Berry, You also have to consider where the costs are. And yes you have to consider your time as cost as well. something most people do not want to do. If you where paying a high school kid xx dollars an hour you would count that as cost.
    A formula for setting prices for a small home crafts business is Material costs times three plus labor. But how do we apply that to Colony of bees and the honey they produce?

    I am not goign to look up actual numbers but take a rough guess.

    The hive itself. Three deep boxes. 30 frames with foundation a bottom board. inner cover and outer cover I am goign to say costs $300 average. It should be expected to last what. 10 20 years. so you can break that down to cost of 15 to 30 dollars per year.

    You then have bees that cost around $100. maybe will last you 2 years so add another $50. The cost of bees is a big one that you can fiddle with to lower your price if needed. You can capture swarms do cut outs or make your own splits etc and bring that cost down to just your labor for example.

    Lets say a beekeeper spends on average 4 hours per season on a single hive. again this will fluctuate depending on how many hives they have and how quickly they move form one to the next. I have 4 hives and will spend far more time per hive than that this season. if I had 20 the time per hive woudl fall although I spent more time working on hives. Again an effect that needs some attention if you want to build a successful small business situation with your bees. it is not only how many hives do you want. it how many hives must you have to be profitable. So again a factor you can use to help control final cost. I will set my hourly cost at $20 per hour.
    So we have at worst $30 for the hive. $50 for the bees and $80 for my time not including time I spend selling the honey. The hive produces 50 lbs of honey.

    $240 for materials and my labor is $320. divide that by 50 and I end up at roughishly $6 a lb. This means I must sell my honey at $6 a lb to make the money required to remain successful. And that is not allowing anything for jars, labels. selling at markets etc. that must all be added in as costs to get the honey sold. Even if I don't see it. I am loosing money if I sell it for less. I am not making money if I sell it for less.

    But lets say I am selling honey right next to someone selling for $5 a lb. What do I do. I must reduce my equipment and supplies cost or reduce my labor. I must get faster at working the hives. get more honey production from the same effort. reduce equipment and material costs.

    If I decide I don't need that formula and can in fact sell my honey at only twice my material and $20 an hour for labor. I will sell honey at a lower price. But I am also slowly putting myself out of business. Or I agree to work for less per hour. And I already consider $20 an hour being cheap.

    It is about making the formula spit out the price you need to be at. not just lowering your price to meet the market. if you cannot produce honey and meet the market price. you are not the person to be producing honey. Your methods and the costs associated with it are not getting the job done.

    It is in this sort of area that business owners and those that want to be business owners part ways. I helped a person invest nearly $50,000 in a business several years ago. arguing with them every step of the way that they where doomed to fail. they did in less then 9 months. They never did see the losses they took every minute they remained in business. they watched the bills pile up that they could not pay. but it never accoured to them that it was because they where not charging enough. they thought they needed to just sell more. I kept asking them why do you want to sell more things that you loose money on every time you sell one. They could not see it. most people can't that is why most people are employees and not business owners.
    Stand for what you believe, even if you stand alone.

  8. #8
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    May 2009
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    Cattaraugus,New York, USA
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    Default Re: How do you set your wholesale price?

    Daniel,
    Step out of the business owner mindset and use a farmers mentality for a moment. I know many farmers that have gone their whole lives and never used their labor hours with a cost involved. The owner is not an employee that earns an houly wage, but rather the one that deals with profit or loss after the year is over.
    Think about it. If i am a small sidleline beekeeper with 100 hives or so, what can I do to make money? Nucs and queen sales, pollination, and honey? Maybe all of them.
    Lets say I don't want any more than 100 hives, and I have already established the cost of woodenware on a previous tax return, so i won't be depreciating it. Say I have 30% loss, so i have 70 hives left. I split all hives into 2 and graft my own queens. I have about 25 dollars in queen cages, cups, candy and swarm bow to raise the 70 new cells I need. I replace the 30 deadouts, and now have 40 nucs to sell at 125 each. Lets say I put them in cardboard nucs, so i spend 200 dollars with Mann lake to buy them. Now I run 50 hives to a locale apple grower for pollination at 40 dollars a hive fee, because he is a close friend and he lets me leave them their until harvest time, and I get a good summer flow their. Just in the nucs sales and apple pollination I have made 2000 from the pollination and 4775 from nucs. If that took me a total of 100 hours to do, which is way to long, are you saying that i really didn't make 6775 profit? Now I know that there are other costs involved such as fuel, marketing etc, but isn't there still money in my hand? Not everyone in agriculture collects a paycheck like a 9-5 worker. Sometimes there is money to draw from, sometimes there isn't, but farming isn't like a brick and morter business.
    Allegany Mtn. Bee Farm
    Quality Queens and Honey from Western New York

  9. #9
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    Sep 2011
    Location
    Reno, NV
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    3,012

    Default Re: How do you set your wholesale price?

    Quote Originally Posted by NY_BLUES View Post
    Daniel,
    Step out of the business owner mindset and use a farmers mentality for a moment. I know many farmers that have gone their whole lives and never used their labor hours with a cost involved. The owner is not an employee that earns an houly wage, but rather the one that deals with profit or loss after the year is over.
    Think about it. If i am a small sidleline beekeeper with 100 hives or so, what can I do to make money? Nucs and queen sales, pollination, and honey? Maybe all of them.
    Lets say I don't want any more than 100 hives, and I have already established the cost of woodenware on a previous tax return, so i won't be depreciating it. Say I have 30% loss, so i have 70 hives left. I split all hives into 2 and graft my own queens. I have about 25 dollars in queen cages, cups, candy and swarm bow to raise the 70 new cells I need. I replace the 30 deadouts, and now have 40 nucs to sell at 125 each. Lets say I put them in cardboard nucs, so i spend 200 dollars with Mann lake to buy them. Now I run 50 hives to a locale apple grower for pollination at 40 dollars a hive fee, because he is a close friend and he lets me leave them their until harvest time, and I get a good summer flow their. Just in the nucs sales and apple pollination I have made 2000 from the pollination and 4775 from nucs. If that took me a total of 100 hours to do, which is way to long, are you saying that i really didn't make 6775 profit? Now I know that there are other costs involved such as fuel, marketing etc, but isn't there still money in my hand? Not everyone in agriculture collects a paycheck like a 9-5 worker. Sometimes there is money to draw from, sometimes there isn't, but farming isn't like a brick and morter business.
    NY Blues, Your post reminds me of the people that come to Reno. they go into a Casino with $50. they come out with $30 and then say they won $30.
    Stand for what you believe, even if you stand alone.

  10. #10
    Join Date
    Dec 2005
    Location
    Brasher Falls, NY, USA
    Posts
    27,200

    Default Re: How do you set your wholesale price?

    I can only imagine how much the people who know something about Business and Accounting and Marketing find beekeepers entertaining. Laughably thinking about how much we don't understand about Price Setting as part of a profit making Business Plan.

    How many of you have a Business Plan? I don't have one. I used to do them annually for the FSA, because I had a Loan w/ FSA. But I haven't done one since.

    If you are going to sell honey, are you doing so w/ the idea of making profit in mind? How do you know when you are making that Profit?
    Mark Berninghausen #youmatter

  11. #11
    Join Date
    Nov 2008
    Location
    Grand Rapids, Ohio
    Posts
    851

    Cool Re: How do you set your wholesale price?

    Supply and demand.
    If you sell out before the end of your honey season you are priced to low or you just want to get rid of your product.
    I wholesale 91% of my crop, because at this time I only have time to retail 9%.
    With the wholesale price increasing 10% for the last 3 year. I just keep setting more hives.


    My accountant keep telling me, bees in a box is better them money in the bank. So now I store all my money in my hives.
    Last edited by The Honey Householder; 03-22-2013 at 07:55 PM.

  12. #12
    Join Date
    May 2009
    Location
    Cattaraugus,New York, USA
    Posts
    345

    Default Re: How do you set your wholesale price?

    [QUOTE=sqkcrk;911732].

    How many of you have a Business Plan?.

    QUOTE]

    Written or well thought out? Written, no, I dont have one. Thought out, yes I do. Its not hard to figure out if I made or lost money in a years time, Uncle Sam wants to know annually. My accountant helps with that, and after the year is over, I hope I made enough to cover costs and put some aside for the years that I need to spend a little more.
    I agree with you guys about raising your prices and selling more honey, I have seen that also in my area of the world.
    Allegany Mtn. Bee Farm
    Quality Queens and Honey from Western New York

  13. #13
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    May 2009
    Location
    Cattaraugus,New York, USA
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    Default Re: How do you set your wholesale price?

    For the original poster,
    I looked around at what other local beekeepers were selling their honey for, and set my price at 25% higher than theirs, as i felt that they were to low. The market would bear my price and the other beekeepers raised their prices also. I then raised my price another 25%, and still sell out before the next season, which tells me I could raise my price again. Set a price that you feel is fair and stick to it. If the customer also thinks it is fair, they will buy. Remember you aren't selling the stuff at Walmart, you have a quality product that demands a quality price. If you set it to low, people will compare it to other low cost honey.
    Allegany Mtn. Bee Farm
    Quality Queens and Honey from Western New York

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