is 4$ a fair price?

[honor435]

what is the average price per bar? iam having a small sale at work, they are 3.3 oz or so.

 

[kaseencook]

3.3oz is about 100g. I usually sell soap at about $3.50/100g but that's in Australia. I have seen some shops in the city (those "all natural" Bath and Body shops) sell 100g bars for $8! I bet if they sold them for less they would probably not sell as many, as purchasing expensive soap is a status thing for the rich people who spend all day shopping in the city.
I suppose price is what people will pay. If it is too cheap, they may think it is cheap. It is also related to the "look" as well, and the style of soap and the essence of the product - does the marketing/labeling/look say "I'm a luxury bar, only the rich high status can afford me" or "I'm fun and affordable" or "I'm natural and rough, cheap but a great bar of soap with conscience" est....
There are also pricing formulas (that aren't pricing based on emotion)

Total cost per bar x 2 = wholesale
total cost per bar x 4 = retail

I have rambled on a bit, hope that helps!

 

[Maria]

When I started I was told the retail going rate was between $1 an oz on the low end and up to $1.25 per oz on the higher end in my area. Later on I read that retail is 4 times the cost.
The little bit I have checked my local competition, $4 to $5 is the average for a bar in the 4 to 4.5 oz range in South Florida.

 

[Tabitha]

1$ per oz oz is average making your 3.3oz bars $3.50-ish. It also does depend on your cost.

 

[jcandleattic]

1$ per oz oz is average making your 3.3oz bars $3.50-ish. It also does depend on your cost.

yep, good advice, and it also depends on the market and your target area and what people within that area are willing to spend.
My market here I can sell my soaps at a pretty average price, but can't sell a votive for more than a quarter... LOL Go figure...

 

[carebear]

Oh goodness, I sell my 4 oz bars for $6-6.50 or 4/$20 or $21.

Think about how much they cost before setting a price. Cost of materials and shipping (oils, lye, additives, colorant, FO, packaging), cost of your insurance spread over a theoretical number of bars you could potentially sell during the year, cost of your equipment spread over say 3 years... Don't sell yourself short. Unless you are in it solely for fun.

And don't forget to collect taxes.

 

[barefootbody]

Well, even if you are just doing it for fun, please don't sell it for too little. It undercuts all of us who are trying to do it for a living. I don't make a high profit on soap, but I do sell it for more than I have in it ($ wise, I mean), but that doesn't account for the time it takes me to make it, or the hours of research that I have put into this.

Last week, the lady who taught me to make soap, called me. She wants me to take over her few accounts, she wants out. Well, she's selling 4.5 oz bars for $3, & she pays for the shipping herself!! It's just a hobby for her . . . Well, hey, I can't compete with that, I cannot sell my soaps for $3, and I will not pay the shipping!!!!

Please, think about everything involved when you price your soaps!

Barefoot

 

[Soapmomma]

Ok I may get stomped on here, but how can you possibly think about everyone involved when you price your soaps? There are different ingredients involved, varied prices of supplies, location makes a huge difference, how you package (if you package). Unless you are selling the exact same soap in the exact same place, everybody's will be a little different. I personally only sell my soap and a lotion base. My soap is 4oz and it sells for $3.00 a bar, and my soap with added silk and shea butter goes for $4.00. We live in a very small town and I sell a very small quantity just as a hobby to keep myself in soap making materials.

In the end it really is your call, how much you've got in it and how much you, personally, need to profit. Just my 2 cents.

Rissa

 

[kaseencook]

I too think that price is really determined by where you live and your target market.

If your target market is "gourmet", then it would not matter if other people sell their soaps for rock bottom prices, because the people who buy gourmet are not interested in cheap soap. Essentially there are many targeted markets within the handcrafted soap relhem, all with different criteria.

I guess what I am saying is that I think people purchase soap for mostly emotional reasons, not just to find the cheapest handmade soap. They imagine themselves using the soap, being apart of something "natural" "clean" "fresh" "gourmet" or whatever your marketing and look portray. I think the actual soap plays a smaller part of the sale than other factors (especially for web based sales as people cannot touch/smell the product), such as the look, marketing angle, sales pitch/product descriptions, apparent trustworthiness of the seller, ect...

If someone cares enough to buy handmade soap over store soap, they are probably not going to be so concerned with price, but the product and what the product means to them will be what attracts a buyer.

I suppose if you had two soap stores with the same theme (like "All Natural"), and very similar soaps, and perhaps the customer couldn't decide which soap was better, they would probably go with the lower priced soap.... but that's competition, which is good for the customers, because price fixing rips people off.

But I say all this with a friendly feeling, and I don't want to be negative, because everyone has good ideas! I guess that's the thing with communicating in text is that tone is hard to determine and I don't want to step on toes, because this is a great forum!

 

[Maria]

Understanding your target market is vital to any successful business. As far as being competitive in your area, it really doesn't matter who sells what for how much, particularly if that person is not competing with you. Maybe those people are not good at controlling costs and have to sell for a higher price just to break even. If you can make a profit selling at $4 a bar and it fits in with your customer base, that is the most important thing.
You do need to make a profit and it is worth the time and effort to make sure you understand the true costs including a wage to make the soap. My accountant advised me to include no less than $10 per hour in my cost of goods. I don't pay myself that as the soap company is a subsidiary of our other business I already receive a salary from but is counted toward cost of goods because that would be the minimum I would have to pay someone else to work for in this area.

 

[jcandleattic]

Ok I may get stomped on here, but how can you possibly think about everyone involved when you price your soaps? There are different ingredients involved, varied prices of supplies, location makes a huge difference, how you package (if you package).

How?? Research. it all takes time and effort, but if you are in this as a business and not just a hobby it is esssential that it is done, otherwise the business portion of it will most likely fail.

(Hope I didn't stomp too hard. )

 

[Soapmomma]

Naw, that wasn't too bad. But to respectfully disagree, research does no good if you are selling locally within towns of pop. 2000 and less and low incomes. I make enough to keep me in oils and that makes me happy. And I shop around enough for the lowest prices +shipping that I do make a nice profit at that price.

Others looking to profit more will likely have more expenses along the way, advertising, different ingredients, better packaging etc of course will have to ask more for their products.

 

[jcandleattic]

research does no good if you are selling locally within towns of pop. 2000 and less and low incomes.

Knowing that information right there shows you DID do research and KNOW your target market. That is how you go about doing your pricing - pricing to allow what YOUR market will pay. It all factors in, so you are not actually disagreeing, you just don't realize you ARE agreeing.

 

[Soapmomma]

That's funny! Ok let me change my comment to "I respectfully, unknowingly agree"

 

[cdwinsby]

I just figure out what each bar costs to make, including my time and packaging.

I then checked out what others were charging in my target market. Once both of those things were assessed, I picked a price that was nicely competitive while still providing me with a comfortable profit margin.

I charge $5 US. At markets I will be charging $6 CAN or 4/$20 CAN.

 

[barefootbody]

I really appreciate seeing everyone's opinions! I also agree, understanding your target market, your area, etc is essential. Personally, I would like to sell my products for more money, but know that my market won't accept it, so I take a cut on profit & hope to make it up on volume. At my price for a bar of soap, I am not making a wage.

I've done a lot of research to obtain the best prices on ingredients that I can afford, & there are a lot of things I would love to try, but don't because of the cost.

Barefoot

 

[kaseencook]

I hear ya barefootbody! I would like to try a lot of things too, but it can be too costly to experiment and harder to think up excuses for why it would be good to get the that miracle ingredient you've been eyeing off :wink:
I chant to myself "you have to spend money to make money" which sometimes makes me feel better

 

[barefootbody]

You've said it so elegantly!

 

[Jeremy]

I already run a business that makes decent coin and I don't get into anything that I don't see being able to match my current imcome.
My driving force is to create the same income with a business that I can use my creativity and business accumen to prosper with.
I will give you the three big secrects to big success.
Either,
1. Big backers, lots of money to stop the failure point that we all have, whether being another income or start-up capital.
2. Dumb luck, you don't want this as most people that succeed right off the hop fail on their second venture due to ego getting in the way of logic.
3: Smart, small timed growth, no big marketing hoops, no big expenditures, just flea markets, trial and error, and learning and growing your own system. And brand the hell out of yourself, even if it's wrong, you can always change it later.
And never, never go the MLM, network marketing , blahdee blahdee way unless you are the person to start the scam.
The reality is, small business is pretty and fun, big business is ugly and cruel.
I don't mean to go on but just to show you I'm not just blowing smoke here, I once had a business, (Maui SunWare Company), where I retailled Chinese Sunglasses at flea markets, you now see them everywhere. They are sold as "Compare to Vuarnet" 1 for $15 two for $10 three for Blah blah.
I bought them at $.50 to $1.5 per pair and made huge markup on them.
My average weekend take was around $1500.00 per location. But what I started that no-one else was doing was I changed all the labels on the boxes to read Maui Sunware Co. I branded the hell out of myself. Not bad a for a part time gig.
Anyhoo, I was making pretty good bucks for a startup business.
My point here if I finally get around to it, is as a business person, you have to first decide if you are selling a product that is better than your competitors, secondly, if not, are you marketing it better than your competitors, and third, all that aside is there enough demand.

After reading everything I wrote I see I lost focus but I am leaving it all in because I believe it's all relevant, it may not be defintive but it is a start.

 

[Jeremy]

Man, I hate to get back into it but I just re-read the post.
Like any venture it is bloody costly to start. Any book you read tells you to take into account your hourly wage to cost your soap.
FORGET IT, it ain't going to happen.
The only way to make real profit on your soap is to produce big volume.
But you do not want to produce big volume unless you have a marketable product and a market.
And the only way to know this is to test market, back to my last post, this read ,(and slow steady growth).
You will not, cannot, produce enough product to make the big bucks until you are ready to commit to producing bigger batches, more often and spending the money to buy production sized equipment and supply quantities.
Now, this being said, if you have marketable products there is absolutely a way to generate a solid income even working off your kitchen counter.
Just be creative, find your niche and market the hell out of yourself.
My wife and I were just at a farmers market in our town and there were two home-made soap makers there. One lady was sitting behind her table reading a book, the other (gently) shoved a soap in our snouts and explained what was in it and didn't we agree how lovely it smelled, which do you think we bought?

One final note, others have said this, this is definately not a get rich quick deal. I have been soaping now for about 6 months. I have created, with input from the great people on this site, one type of soap that is up to my standards and that I believe to be marketable with a few tweaks (meaning better than most, in my opinion only, and hopefully many others). And through a lot of failure feel I am on the verge of being able to create other marketable products at a faster rate from here on in.
I have done the setup, have the domain names bought and paid for, presently creating the online store template (hating it, probably going to hire a web geek), having stamps made, seeking out packaging and label makers, and getting ready for when I have enough product to launch.
Butttttttt, even after all this, and don't forget I have financial backing to propel my business faster than most, I am going to sell my product at farmers/flea markets because that is your ultimate test market. Though your sales price must be cheaper than retail.
And quite frankly there is gold in them dere hills.
Hope I haven't waxed too poetic for you, just wanted to share what limited insights I have.
Good luck, and go forth and prosper...treckie fans'll get that one.