How do you set your wholesale price?

[Allen]

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?

[Rader Sidetrack]

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?

[cg3]

Try for the highest price you can get while looking them in the eye and keeping a straight face.

[gmcharlie]

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....

[cg3]

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.

[Allen]

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.

[cg3]

When people talk about getting $2 wholesale, they're talking about selling buckets or barrels. Don't equate your product with store honey. If youre only dealing with a couple hundred lbs you'd be cutting your own throat to do that. My crop this year is probably 350-400 lbs and it will sell out before the next crop comes in. That's just casually selling it by word of mouth and to a couple of gift shops that specialize in local products.

[cg3]

2012 prices on 16oz Muth jars have been $7 and on 8oz $5. The resellers have been getting $15 and $9. I've got less than $2 in honey, label, jar and shrink band in them. I hesitated to use them at first because they seemed expensive but I sell them out instantly. 2013 prices are going up.

[dixiebooks]

I get $9 for a 22 oz jar and it's not "muth" or anything else fancy, just a plain round jar.

I'm not an artist, but if I were and I did ironwork or anything else, I think I would set my price and that would be that. Retail, wholesale, call it what you want. If someone wants to buy it and resell it at a profit, let them raise the price according to how much profit they want. After all, is it not a one-of-a-kind piece? I dunno, maybe I'm wrong. Like I said, I'm no artist.

-js

[Bee Bliss]

I agree with Allen. Why should he work harder to make less on his ironwork.
An artisan only has so much time in the day. It's a handcrafted work of art and people pay for that. The artisan is only one person and can only produce so much. The middle man would be making the profit and taking advantage of the artisan at that rate. I understand how he feels as I used to do stained glass. People do not appreciate how much work, time and talent went into the crafted product.....I mean piece of art.

At least with honey, you have some control on production by having more hives, etc.

[sqkcrk]

When I started out selling honey to grocery stores I asked the store how much wer they paying for the honey on their shelves. I decided I could afford to sell it at that price too. So that's where I started. Over the years, once my brand was established in markets in my area, I raised prices and sold more honey each year, even after raising prices.

Look at the cost of the jar, the cap, and the label and then decide what you want for your honey. Total all that together and see if you think you can sell honey for that and make a profit. I like round numbers, sorta. So once you come up w/ a number round up to a number you can multiply easily.

[Daniel Y]

As a craftsperson I can say that selling your work to retailers removes the work of selling it from you. Selling does not come without cost. With that you must realize what you are selling at a lower price for. and that is they do the selling. That means you product sells. That is far to often not the case. I have had my work in several stores and none of them will sell it yet. I can take the same goods back when I am doing a show and sell it within hours. So at the very least make sure you get what you are paying for.

[camero7]

I get $10/lb. retail and $6/lb wholesale in case lots. Almost out of honey now.

[sqkcrk]

I am a member of a Food Co-op which sells locally grown foods to institutions in the area, colleges and restaurants. I have 20% removed from my Wholesale price to cover Co-op costs. If you check Food Distributors costs you will find similar or even higher costs. I don't have to deliver directly to a handful of customers. I find it worthwhile selling thru the Co-op. It frees me up to do other things.

[cg3]

As long as you get a fair price, markup is not something to be concerned with. Stores have overhead costs to do what they do, freeing you up to do what you do. As a small-timer, I'm trying to squeeze as much out of my limited production as I can to cover costs in this somewhat expensive hobby. If I had a lot more product there's no way I could both produce and market, even if I wanted to. There is a huge difference between marketing a few buckets vs. a few tons.

[Allen]

Thank you for all of the input.
BTW, I forgot to mention about a small local orchard that offed to sell our honey in their little store and not take a percentage.
The orchard has been around a long time and the nice lady who runs the place must of taken a liking to me or something.

Since we are small and new, we will mostly sell face to face and test the waters with the farmers market, produce stand and the orchard.

While selling iron at the artisan shows last year I had an iPad slide show running showing our bees and ironwork. It generated interest and started conversations about beekeeping and local honey.
With those experiences, I'm confident we will sell honey this year at those same shows.
All of that should give us some experience and start to establish our honey reputation.

Hijacking my thread but its still related:
Since customers may need to be educated on the benefits of local honey, granulation, and other things, I'm going to create some kind of handout for them to take.
We have a 44" printer in-house and may print up an informational poster with photos and/or info for POS use.
Internet sales are also being looked at.
Offering free taste samples should also get some buyers.

[gmcharlie]

2.00 is the around the nationwide average wholsale. you can find it monthly in ABJ or other sources. We can and do get more for local pasturized "artisan" honey.... but you have to sell it..... that takes time. so are you ahead sitting all weekend at the farmers market or selling it wholesale... thats your call. Depends on how many miles you want to clock and your market. There are certianly a lot of people here getting 10.00 a lb for there small lots. therey are also several guys here who will sell you a full drum of great honey for 2.00 a lb... we manage to sell around 5000 lbs a year at 5.00... a a bit with comb in for 6.00.... no way to move that much here at 10.00 our income in this range won't support it. those are things you have to explore...... I hire a salesgirl who handles several store. the idea of a day at a fair makes my stomach roll... but thats me. If you like it have a blast!

[Allen]

Thanks for the info.
Won't have time to sit at a farmers market which is why I'll sell at the Artisan shows I attend.
Figured we'll start slow and see where the demand is and what does and doesn't work.

One of our new yards for Spring is at a nearby non-profit historical farm.
It functions as a place for schools to bring grade schoolers on field trips where they learn about early American life.
In Fall we caught a late swarm and placed it in a Nuc box on the property. It ended up not working and they died out.
Saw the president of that and he wanted to make sure we were still putting hives on their property. He said folks keep asking about the bees. LOL
This area is managed by the Pa Game Commission and Army Corps of Engineers for wildlife conservation and can't wait to what kind of honey gets made there.

[Daniel Y]

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.

[NY_BLUES]

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.