Figuring out wholesale pricing
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  1. #1
    Join Date
    Apr 2016
    Location
    San Antonio, Texas, USA
    Posts
    4

    Default Figuring out wholesale pricing

    Hey guys,

    I'm pretty new to the honey business in terms of moving wholesale weight, but I can't seem to get a handle on how much to charge for the honey I'm selling. I'm selling Guajillo honey, pretty unique and high quality compared to the honey in the area (SouthEast Texas), but still largely unknown. Internet searches are giving my results that are all over the place. I'm getting clientele, but I don't really know how to price them. I'm currently referencing honey.com's wholesale pricing, but that seems to be scaring wholesale clientele away.

    http://www.honey.com/honey-industry/...nth-wholesale/

    We're selling retail by web, 12$/lb. and 30$/3lbs and those are moving just fine, but I'd like to get into wholesale markets. All help is appreciated!

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  3. #2
    Join Date
    May 2010
    Location
    Spokane, Washington, USA
    Posts
    1,120

    Default Re: Figuring out wholesale pricing

    Never tried that honey but if its dark then 1.80/lb in drums and 3 bucks in buckets.

  4. #3
    Join Date
    Feb 2014
    Location
    Ottawa, ON
    Posts
    176

    Default Re: Figuring out wholesale pricing

    Esargent, I wholesale to 3 highend bakeries (and a local micro brewery pub). (cases of labeled jars, creamed and some cut comb). They retail it for $8 for 500 gr (~a pound). They want to make about 40% markup or profit margin. For these kinds of retailers it is about markup as they do not expect to do a volume business. It is an impulse buy. The consumer did not go to their store to buy honey. They are looking for a sweet treat or quality bread. The retailer wants to get as much of the customers sweet treat budget as possible and they want to maximize the profit margin. Why let a 20% markup product replace their normal high markup bakery items.

    If you are wholesaleing to a regional grocery chain. They want low price, terms, guarantee supply, consistent product quality, long shelf life(no granulation?). Their margins are smaller and they would like to sell volume. It is price competitive. You need to differentiate your product from the big packers or try and compete on price.

    If you calculate the average markup between the monthly average retail and wholesales prices listed at the Honey.com site it is consistently ~30%. I would be interested in the % of sales reported by type of retailer. More grocery chains would skew the average down. More high end sellers would skew the average higher. I would also like to know % sales reported by region/state or even major urban vs small urban etc.

    Regards Peter
    Ottawa. ON

  5. #4
    Join Date
    Dec 2013
    Location
    Austin, Texas
    Posts
    523

    Default Re: Figuring out wholesale pricing

    Huajillo (aka Guajillo) is a very light, honey. Nice product but all of the major producers had it washed out in south Texas this year. There was some brush honey produced - usually pretty good but this year it had an off-taste and was considered an inferior product by most.

    What are you considering wholesale? Cases of 1 lb jars to the local feed store or buckets and barrels?

    Quote Originally Posted by esargent View Post
    Hey guys,

    I'm pretty new to the honey business in terms of moving wholesale weight, but I can't seem to get a handle on how much to charge for the honey I'm selling. I'm selling Guajillo honey, pretty unique and high quality compared to the honey in the area (SouthEast Texas), but still largely unknown. Internet searches are giving my results that are all over the place. I'm getting clientele, but I don't really know how to price them. I'm currently referencing honey.com's wholesale pricing, but that seems to be scaring wholesale clientele away.

    http://www.honey.com/honey-industry/...nth-wholesale/

    We're selling retail by web, 12$/lb. and 30$/3lbs and those are moving just fine, but I'd like to get into wholesale markets. All help is appreciated!

  6. #5
    Join Date
    Apr 2016
    Location
    San Antonio, Texas, USA
    Posts
    4

    Default Re: Figuring out wholesale pricing

    Thanks Peter. To answer Chuck's question, I was thinking about $3/lb wholesale. Since you already know about Guajillo honey, what do you think/recommend? Also do you think it's worth the effort to attempt to try and raise the popularity again? What I'm currently doing is middle-manning the honey to companies until I can take over the beekeeping/production. Before I came onto the scene, the Guajillo was just being sold to another huge company that just mixed it in with anything and sold it as wildflower honey. The current owner is getting paid a little over a dollar for it. He doesn't bother marketing it as Guajillo. Any advice on that?

  7. #6
    Join Date
    Dec 2013
    Location
    Austin, Texas
    Posts
    523

    Default Re: Figuring out wholesale pricing

    Quote Originally Posted by esargent View Post
    Thanks Peter. To answer Chuck's question, I was thinking about $3/lb wholesale. Since you already know about Guajillo honey, what do you think/recommend? Also do you think it's worth the effort to attempt to try and raise the popularity again? What I'm currently doing is middle-manning the honey to companies until I can take over the beekeeping/production. Before I came onto the scene, the Guajillo was just being sold to another huge company that just mixed it in with anything and sold it as wildflower honey. The current owner is getting paid a little over a dollar for it. He doesn't bother marketing it as Guajillo. Any advice on that?
    At wholesale, not producing it yourself, you are essentially middle-manning to the middle men = I don't see a lot of margin there to work with.

    The packers are selling varietals at around $2.75 / lb and likely paying around $2. At wholesale varietals are 20 - 25 cents more per lb than wildflower. Freight and long-term relationships being a factor. Varietals are a niche market, some customers know them, many do not. Some years you'll make a crop, other years it'll get washed out and still other years it will not have an acceptable flavor profile (and to some extent, color).

    While the honey you have can sell locally as Guajillo, it is my understanding there was no honey produced out of South Texas this year that was acceptable to the packers as Guajillo. If the product is routinely unacceptable to the packers as a varietal, there's little point in pursuing that market.

  8. #7
    Join Date
    Apr 2016
    Location
    San Antonio, Texas, USA
    Posts
    4

    Default Re: Figuring out wholesale pricing

    Quote Originally Posted by ChuckReburn View Post
    While the honey you have can sell locally as Guajillo, it is my understanding there was no honey produced out of South Texas this year that was acceptable to the packers as Guajillo. If the product is routinely unacceptable to the packers as a varietal, there's little point in pursuing that market.
    Where did you get the info about the packers opinion on the quality? This sounds like a useful source of info. Thanks.

  9. #8
    Join Date
    Dec 2013
    Location
    Austin, Texas
    Posts
    523

    Default Re: Figuring out wholesale pricing

    Quote Originally Posted by esargent View Post
    Where did you get the info about the packers opinion on the quality? This sounds like a useful source of info. Thanks.
    Asked. I normally sell some varietals alongside the wildflower as having some contrast both visually and for sampling helps sales all around. Guajillo / Huajillo is a favorite but not available this year. Two reasons for a varietal being not available = the crop was washed out or the samples provided to the packer did not pass the muster. As picky (if not more so) than the packers is my wife. I know a good many of the major producers and packers in the Central Texas area including families that have been in it 50 - 100 years. If barrels of quality Huajillo were available they'd have been picked up this spring. Mesquite is the alternative at the moment but it has a fast crystallization rate. Typically the darker honey coming out of these areas will be called a "Brush Honey" though it's not recognized as a true varietal.

    The average consumer does not know varietals and will buy based upon a label and a little marketing. That extends into Wildflower as well which can be a very pleasant honey but can end up as a dumping ground for interior quality product. The packers will be more discerning and looking to avoid returns and refusals further down the distribution chain.

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