Deciding on prices...

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Deciding on prices...
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Hairyloon

Joined: 20 Nov 2008
Posts: 15425
Location: Today I are mostly being in Yorkshire.

Posted: Thu Feb 13, 14 10:12 am Post subject:

vegplot wrote:

Work out all your costs including time and add profit margin.

At this point, most of the time is likely to be spent on marketing, so how do you work that one out?

RichardW

Joined: 24 Aug 2006
Posts: 8443
Location: Llyn Peninsular North Wales

Posted: Thu Feb 13, 14 10:36 am Post subject:
If you are really stuck find other peoples products & average all the prices.

Rob R

Joined: 28 Oct 2004
Posts: 31902
Location: York

Posted: Thu Feb 13, 14 11:04 am Post subject:

Hairyloon wrote:

vegplot wrote:

Work out all your costs including time and add profit margin.

At this point, most of the time is likely to be spent on marketing, so how do you work that one out?

Well you have 168 hours every week. Work out how many of those are spent working. Presumably you have a target income to make each week or month. Subtract any other work from that figure and divide that by the total time spent on oil related activities. If that's lower than the wage you'd have to pay someone else to do it, add a bit on (you don't want to have to up the price in order to employ extra help in the future). It doesn't matter if you're marketing, producing or delivering, it's all costing you the same amount of time on it.

Hairyloon

Joined: 20 Nov 2008
Posts: 15425
Location: Today I are mostly being in Yorkshire.

Posted: Thu Feb 13, 14 4:38 pm Post subject:

RichardW wrote:

If you are really stuck find other peoples products & average all the prices.

Tesco's range of direct competition costs from �6-10 per litre.

sean
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 42219
Location: North Devon

Posted: Thu Feb 13, 14 4:48 pm Post subject:
Price yours at or above the top end. Cutting prices is easy, raising them tends to meet with more resistance.

Hairyloon

Joined: 20 Nov 2008
Posts: 15425
Location: Today I are mostly being in Yorkshire.

Posted: Thu Feb 13, 14 5:06 pm Post subject:

sean wrote:

Price yours at or above the top end...

Think I need to find an answer to this before I can do that...

Falstaff

Joined: 27 May 2009
Posts: 1014

Posted: Sun Feb 23, 14 10:53 am Post subject:

I think the "right price" - is the maximum the punters will pay without feeling "ripped off"

This depends really whether it's a load of produce you are "stuck with" and need to get rid of - or whether it's a life passion.

Your "extra virgin "thread seems to say - it's just a "label" and nobody really is very interested in checking it ! (good information for use "later" ?)

I'd say if you are wanting to sell to "tesco" - you'd need to be �3-4 a litre to give them a nice profit (don't worry too much - they'll soon enough tell You what they're paying !) - If you're selling "Farm Shop" then their price could be �12 - which you could sell into (different label) at say �8.

You might want to think about selling relatively cheap to start with - then introducing a "premium - extra virgin - 100% grown in the uk" brand later - when you have got your feet under the table ?

Hairyloon

Joined: 20 Nov 2008
Posts: 15425
Location: Today I are mostly being in Yorkshire.

Posted: Tue Feb 25, 14 2:15 pm Post subject:

Falstaff wrote:

I think the "right price" - is the maximum the punters will pay without feeling "ripped off"

Or maybe the maximum before I feel that I'm ripping them off...

Quote:

This depends really whether it's a load of produce you are "stuck with" and need to get rid of - or whether it's a life passion.

If I was stuck with it, I could either make it into diesel or sell it to the chippy... seems a bit wasteful though.

Quote:

Your "extra virgin "thread seems to say - it's just a "label" and nobody really is very interested in checking it ! (good information for use "later" ?)

I'm thinking that if I sell any directly (eg a market stall), then I might put up a sign saying "Ask about our Extra Virgin Oil", and then ask them what they think it means...

Quote:

I'd say if you are wanting to sell to "tesco" - you'd need to be �3-4 a litre to give them a nice profit...

I'm not planning to get big enough to be supplying any supermarkets, but �4/litre sounds like a good wholesale price.

Quote:

If you're selling "Farm Shop" then their price could be �12 - which you could sell into (different label) at say �8.

You might want to think about selling relatively cheap to start with - then introducing a "premium - extra virgin - 100% grown in the uk" brand later - when you have got your feet under the table ?

Unless I do something to degrade my initial product, I don't see how I can improve it any to introduce a premium label.
I may be making a second grade of oil though: I'm going for Rob's idea of turning the residue into an alternative solid fuel, and it looks like I'll be getting some more oil out in the process... that stuff might just go for frying chips though.

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue Feb 25, 14 10:17 pm Post subject:

Hairyloon wrote:

I'm thinking that if I sell any directly (eg a market stall), then I might put up a sign saying "Ask about our Extra Virgin Oil", and then ask them what they think it means...

Unless I do something to degrade my initial product, I don't see how I can improve it any to introduce a premium label.
I may be making a second grade of oil though: I'm going for Rob's idea of turning the residue into an alternative solid fuel, and it looks like I'll be getting some more oil out in the process... that stuff might just go for frying chips though.

You know how you like to argue the toss with people, just for the sake of it, sometimes? Try not to do this with the people buying on your market stall.

And as for making your product premium, stick a better quality label on it, in a better bottle and treble the price. It's suddenly loads better.

dpack

Joined: 02 Jul 2005
Posts: 46249
Location: yes

Posted: Tue Feb 25, 14 11:37 pm Post subject:
pitch high as your product deserves a premium over the industrial and your per unit overheads will be higher if it too high to sell enough go for the buy three get one free type of option ?

Hairyloon

Joined: 20 Nov 2008
Posts: 15425
Location: Today I are mostly being in Yorkshire.

Posted: Wed Feb 26, 14 12:38 am Post subject:

Nick wrote:

Hairyloon wrote:

I'm thinking that if I sell any directly (eg a market stall), then I might put up a sign saying "Ask about our Extra Virgin Oil", and then ask them what they think it means...

You know how you like to argue the toss with people, just for the sake of it, sometimes? Try not to do this with the people buying on your market stall.

You must be thinking of somebody else...

But I wasn't thinking to be arguing with the customers, but engaging in a bit of market research: what do people think the "extra" actually means?
If it means to them something that my oil is, then I can tell them it is so. If it starts causing rows, then I can just take the sign down, but I think it more likely to give me the opportunity for a show of honesty: I've tried, but I cannot find what it actually means.
Or I could say that it has been thoroughly screwed, but it is still technically virgin...

Most people I have spoken to think "extra virgin" just means "from the first pressing", which makes no sense to me: if on the first press we exert a pressure of 11MPa at 500�C, then that is still a first press...

Hairyloon

Joined: 20 Nov 2008
Posts: 15425
Location: Today I are mostly being in Yorkshire.

Posted: Wed Feb 26, 14 12:54 am Post subject:

dpack wrote:

if it too high to sell enough go for the buy three get one free type of option ?

I don't think it is the kind of product that most people would buy a lot of at once.

dpack

Joined: 02 Jul 2005
Posts: 46249
Location: yes

Posted: Wed Feb 26, 14 1:25 am Post subject:

ok you might be right but the market you are aiming at is about top quality so pitch high and go for folk where price is not the first thing they think about ,if the price is too high even for those seeking a top end product either reduce the price so long as you still make it worth your efforts or seek a better sort of customer

thinking to compete with tescopolis etc might not be as good as finding a niche market of your own

sending a few samples to top end restaurants ,delis etc (with explanations of origin etc and availability ,prices etc )is an option i would try with hand made oil

the amount one chap and a press can make is limited so maximise the price on a low volume product as best you can .

dont compete ,swerve and use what is best and different about your product

i need to take my own advise with this years moo crop

Hairyloon

Joined: 20 Nov 2008
Posts: 15425
Location: Today I are mostly being in Yorkshire.

Posted: Wed Feb 26, 14 1:29 am Post subject:

dpack wrote:

the amount one chap and a press can make is limited so maximise the price on a low volume product as best you can .

One good thing about the teething troubles that I've been having is that working my way through them has put me in a position where I can relatively easily build another press, should the rate of pressing ever become the limiting factor...

Mistress Rose

Joined: 21 Jul 2011
Posts: 16002

Posted: Wed Feb 26, 14 7:19 am Post subject:
I would still agree with Dpack; don't try to compete with the supermarkets on price. You are offering a hand made product which hopefully will be good quality. This is what you are selling; hand made, quality, personal service and local(?).

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