Saturday, March 13, 2010

I get asked this a lot

Hi there!! First, I loved looking thru all of your items - so very cool!!! But I am a little confused about how your prices are like 1/2 of most of the others. I just spent $14 plus shipping for 4 OZ of yogurt body cream/butter and you have this wonderful 10 OZ for so much less. I love the prices - but it just blows my mind about the difference in price. WOW!! Also, I am 43 and use the SUKI brand organic items for my face but they are so pricy and I would love to use your items for my face. I see you have the brown sugar scrub for the face and the squalene, but do you have a regular facial cleanser and moisterizer? If you do, can you please let me know the price? Thank you and I look forward to using your products! Take care, 

My answer...
Simple... I don't charge retail! Retail is cost of goods x 2.5 + selling fees + hourly rate.   That's why those little 4oz jars of body butter are so expensive, because you're paying MORE than DOUBLE of what it cost to make!

Secondly,  I buy all of my raw material directly from the source that produces it. I do not have a "supplier" or "middle man" who can cut the quality and jack up my prices.  Typically a 3 lb bucket of Organic Cocoa Butter from a supplier will cost  about $70. I buy cocoa butter in a 55 gallon plastic drum. from where it's made.

Say, The factory will charge $1000 for a  55 gal plastic drum of oil. That's a little over $18 a gallon. or 11 cents an ounce.
  A supplier will order this and then split it up each into 55 - 1 gallon jugs and then charge it's customers $36 a gallon., or 23 cents an ounce. Whoever buys this will use the cost x 2.5 pricing formula to make their products.  So, they are charging you 23 cents x 2.5 = 57 cents per ounce of oil that goes into your product.

I only charge you the 11 cents, plus I don't use a retail pricing formula. I charge wholesale which is cost of supplies + paypal & etsy fees + piece rate. Most will charge a flat hourly rate, I only add $1.00 on to the the cost of what it is to make.
That is my wholesale pricing formula.  Etsy accounts for about 1% of our total sales, so really we're not loosing out on much :)

 If I were to charge retail price for a 10oz jar of my body butter ($9.99), it would cost $23 a jar! I lowered my prices online because shipping needs to be factored into the total cost. If you were to visit one of my local shops, you'd pay $13.99 for that same jar of body butter because I can charge a little extra because there's no shipping.

Third, why take advantage of the consumer? I'm not trying to become a millionaire. As long as my costs are covered and I have a little extra to add some new things to my shop the next time I order my material, then I'm happy.


Anonymous said...

That's why I love you and your shop; you actually care! I hope you never change!

Anonymous said...

One of the many, many, MANY reasons I love your shop as well. You're awesome!

gina said...

I agree with the above post- AND your products are simply amazing! My skin has never looked better. Please don't stop making your products-I would CRY!!!!

Anonymous said...

Just wondering but is that girl on your etsy avatar you?

by BB*Jayde said...

This is me :)



Anonymous said...

Ah! You look so young!!! Wow!

by BB*Jayde said...

Wanna hear something funny? I was at the grocery store the other day waiting in line at customer service to buy some stamps and this old guy asked me why I wasn't in school LOL
He asked is I was playing hooky! I was like, um.. no.. I'll be 30 in like 2 months!

Anonymous said...

Take it from someone who knows. You will get tired of working so hard for so little pay. I used to think the same way as you do about keeping the prices down. It only took about a year of tireless, around the clock work, for little or no pay for me to change my train of thought about pricing. Pay yourself for your hard work. You deserve it!