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Author Topic: Pricing . . .  (Read 1120 times)
Opulence
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« on: August 20, 2012, 03:52:36 PM »

I know we discussed the topic of pricing several times; heck . . . I bought it up a few times myself.

I just made a batch that cost me $54.73 to make 4.5 lbs or so.  The cost of each 8 oz bar is $3.70 for ingredients.

I will probably get 9 - 8 oz bars and 10 - 1.5 oz samples.

Based on previous discussions each 8 oz bar will cost $14.80.  $3.70 x 4 = $14.80 . . . Is my pricing correct?
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Martha
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« Reply #1 on: August 21, 2012, 07:13:55 PM »

Holy smokes that must be some great soap. But you are correct. The minimum amount to set your price is 4x the cost of the product.

Initially, I thought of "sticker shock" . But then when you think about a lux bar this is not that way off. I have splurged on a few must have treats for myself . Once customers get used to your line, I am sure they will open their wallets.

Some people like high end skin products and some like Jimmy Choo shoes . And some like both. Going to run those lotto numbers again:)
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lightningbug
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« Reply #2 on: August 23, 2012, 04:36:32 AM »

Martha,  Are you saying we should charge 4x the cost of the soap in sales at craft shows as well? I misunerstood I thought the cost of the soap should be 3x the cost of the soap. Are you charging the sales tax on top of that or incorporating it into the price? I was wondering how people took care of the sales tax issue, in my state the sales tax is 8% which can add up quickly on top of the cost per bar price.
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Opulence
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« Reply #3 on: August 23, 2012, 06:47:48 AM »

Lightning,

There is a posting on this where we spoke about taxes in depth.

Any registered business that sells retail is expected to pay sales taxes (on products sold) to their state.  You collect the taxes from the customer and pay the state. The 8% in your state is charged on top of the retail price.  People expect to pay taxes on products they buy . . . we pay taxes everyday on items we purchase!!!

Don't be shy about charging taxes!!!  Some people pay the state taxes out of the business revenue.  I don't suggest this because it not only cuts into your profit but you, the business owner, is not supposed to pay the taxes; the customer is.

As business owners, we have to be business minded!

Look up the posting.
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lightningbug
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« Reply #4 on: August 27, 2012, 10:48:03 AM »

Opulence, I will definitely look up the post for further information. You are right I do need to think more business minded I am not giving my products away and should  consider what I pay taxes on regularly. I am working on a variety of issues right now for some upcoming shows and the holidays season, I needed to hear some basic common sense. Up to now I have done alot of research and development for my products and need to switch gears into the selling aspect. thank you for your generous input.
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CrystalS
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« Reply #5 on: August 31, 2012, 01:27:00 PM »

Personally I have purchased high end ingredients to help get my soap recognized but I figure up cost of supplies before making a batch because there honestly isn't that many people that will go to a craft show etc and pay $14 for a bar of soap, not around here. If you do happen to sale a lot at that price that's great! Just saying I want to build clientele and of course offer great soap at an affordable price.
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soap1967
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« Reply #6 on: August 31, 2012, 01:29:41 PM »

I have read through the thread and I don't see anything that I would construe as being unkind.

Most businesses fail - just a fact.  I think the responses are trying to reinforce what to do in order to be successful - every penny counts.  
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soap1967
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« Reply #7 on: August 31, 2012, 01:34:19 PM »

Take into account she is selling an 8 ounce bar of soap ....twice the size of most.  I have seen soap at 3 ounces priced for $6.

Part of the process of building the business in branding for your intended customer.  I have a soap I sell for $18  @ 4 ounces weight and can't keep in stock.  My lotion bar is $22.50 a sell out as well.  In fact my lowest priced bar @ $9 sells less than the others.
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CrystalS
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« Reply #8 on: August 31, 2012, 01:45:18 PM »

That is a large bar of soap.
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Opulence
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« Reply #9 on: August 31, 2012, 01:54:01 PM »

That's great Soap!  Maybe I should decrease the size of my bar!!!  Smiley
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soap1967
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« Reply #10 on: September 01, 2012, 04:05:29 AM »

I would cut that bar down to 4 ounces and still sell it at $7.50 which is the "correct" mark up.

Unless it is a facial soap.  If its a facial soap I would price it much higher.

The 4 x rule is applicable to make a profit but there is no rule to say you cannot price your product higher.  The soap I sell for $18 costs $1.93 a bar - i do not factor in labor. Understanding the psychology of the consumer is important here.   In cosmetics the markup on products is an average of 1000%!  Think what the most expensive cost is in a cosmetic line - its skincare.  The average price of a cleanser in a department store is $32 though I have seen them as much as $60 and higher.  Generally the greatest expense to the company is packaging.  These formulations cost $2 - $7 to produce. 

Women (whom I believe are more likely to purchase our products) will also spend more money on facial products than body products UNLESS the body product has "something" unique and special to it.  Even so body products are not as expensive per ounce.  The average facial moisturizer in dept. stores is around $50 for 1.7 ounces.  The average body cream is $40 for 8 oz.

Even drug/discount stores have gotten on this band wagon - L'oreal revitalift moisturizer is $24.99 for 1.6 ounces.  I bet the cost with packaging is $2. 

You get my point here by now.  Yes handmade soap is more expensive than MOST soaps but not all.  I just saw yesterday a L'occitane body soap at 8 ounces for $20.  Primary ingredients Palm and PKO with some EO.  I think it would be hard to sell a daily body soap for $20. In my line The daily body is the lowest priced.  Yet I sell it less than the others!!!  My customers buy the $18 soap and use it for both face and body.  Go figure.  Because of this I have decided to go to one fragrance in my body line.  Per your suggestion Op I have put a design on that soap, chosen my most successful fragrance, and that's it. I have a feeling I will see an increase in sales.
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Opulence
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« Reply #11 on: September 01, 2012, 04:28:16 AM »

Soap,
Thanks for your input and suggestions!
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