Tuesday, February 12, 2013

Pricing your product!

Figuring out what to charge for your product may be just about as daunting as learning how to make it was to begin with. There are so many things to consider. Do you pay shipping? Do you drive to pick up your supplies? How long does it take to make it? Am I planning to sell only retail or retail and wholesale? Each question twists the answer in a brand new light! I will be going over pricing products that will hopefully ease some of the pain in this process.

I will use for this example Jelly Jar Candles since they are likely one of the most popular sold.

Consider ALL your supplies when making candles. Some things, like liquid dye, ink to print labels are best estimated. I also estimate my fragrance cost. I added all my scent costs up one time...and divided by the number of them there were and came up with my "average cost" including shipping. This is probably better since not all scents are likely to cost the same. With things that have absolute prices: jars, lids, wax, wicks etc. use those costs and don't forget to add in your cost for shipping! It costs you, you need to charge for it as well. If you drive to pick up supplies, figure your cost to get them...again, add that in.

  • Wax: IGI 6006 $89.70 per case, $35.00 to ship it to me = $124.70 That means my wax is actually costing me $2.08 per lb or $0.13 per oz.
  • With fragrance as I said above. I use an average cost. My average cost is $18.00 per lb. $18.00 plus $2.00 per lb to ship = $20.00 per lb or $1.25 per oz.
  • My cost for dye is averaged and I figured my cost per lb of wax to add dye is $0.10
  • I use a label, a wick stickum and a warning label on each jar as well. This is an averaged amount per candle of $0.40
  • My jars, the 8 oz mason Jars cost $6.72 and the lids cost $0.20 each. So the cost for the lids and the jars is $9.12 per dozen plus $4.00 to ship = $13.12 This comes out to $1.09 per jar.
  • My wicks are $9.49 a dozen for the CD 10's. I use one per jar. They are $0.10 per candle.

Ok, so we have the basics down. Now it's time to break it down to show you the way to cost it out. With the IGI 6006 I like a very full jar so I use 6.5 weight oz of wax per container. I use 1 weight oz of scent per lb of wax. The easiest way to determine the cost of the wax and scent is to add that cost together and break it down like this:
Wax per lb = $2.08 + Fragrance per oz. $1.25 = $3.33 per lb or $0.21 per oz.

$1.35 for the cost of the wax and fragrance
$0.10 for the cost of the dye
$0.40 for the cost of the wick stickum, labels and ink
$1.09 for the cost of the jar and lid
$0.10 for the cost of the wick
$3.04 total cost to make an 8 oz Jelly Jar Candle

Now there are many ways of determining your selling price but don't undersell yourself. You worked hard to make this candle. No sense in giving them away. Retail prices are generally your cost times 3 or 4. So in this case, your selling price would be between $9-$12 per candle. If you plan to wholesale your product, you will want to keep your retail prices in line with the resellers of your product. Standard wholesale is cost times 2, so in this case around $6.00 per candle. The shop will double that for a standard retail mark up and thus they will likely charge $12.00.

Keep in mind these are only estimated costs based on estimated shipping. The amounts you buy and your shipping will create some variation in this price. It's just to show you how it's calculated so you can figure your own costs easily.

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