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Old 02-15-2017, 09:04 AM   #31
The Efficacious Gentleman
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Default Cost of goods

Randy, if you sell to the public even as a side business, why is the time less valuable? Granted, you would be making soap anyway, but there is no material difference in the soap and the value of your time if you make a batch as a side business or full time.

Think of it from a customer perspective - one day they buy soap from you for $x and the next day it costs $y - the difference? You suddenly decide that you will include all of the costs of time correctly as you want to go full time at it. There is no difference in the product itself, so many customers will go elsewhere.

Not to mention, if everyone who soaps as a hobby price only to cover costs, full timers will have to stop being full timers! "So what?" someone might ask. Well, many of the trailblazers ARE full timers. They make, they sell and we all benefit from their experiences. And then we cut the rug out from under them because we, for some inexplicable reason, want to under price our soaps. Then they can't soap full time and blaze less of a trail because of it.

Then all soap is priced as materials + a little bit of time because no one can soap full time. Someone comes along who has a much cheaper source than you for materials and suddenly you are struggling to justify your prices - then it's you who isn't even covering the cost of the market from the daily takings (let alone from the actual profits of the day!) and unless you can lower your costs, you can't even sell as a side deal.

Under pricing leads to no good thing - not for the businesses nor the customer. A downward spiral to the lowest cost does not engender development and innovation, rather cost cutting and a cheapening of the product.

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Old 03-10-2017, 01:35 AM   #32
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Originally Posted by SheLion View Post
Exactly! And in the end, it hurts everyone because there will always be someone that sells cheaper. There are customers that value quality and understand that quality costs money but they are few, and getting more scarce it seems.

Pricing handmade goods is an art as well as a science. It causes consternation pretty much universally, no matter the product. But a person that correctly figures in costs such as labor and overhead (rent, utilities, insurance, etc.) will never be able to sell as cheaply as a person that just figures (or guesstimates) their material cost and multiplies by x for wholesale and y for retail.

And what amazes me is that the people that don't include labor in their pricing would never work for free at their 'day' job. Go figure.

I hear what you're saying about hobbyists undercutting prices, but I at least partially disagree with you. For sure- hobbyists in many circumstances are doing themselves a disservice by undercutting prices; that's true for all the reasons you both have listed and more. BUT- there's a fair percentage that don't need to make top dollar, and will never ever be selling for the purpose of earning a living. They are there to: help pay for supplies, use up product to create a reason to make more, get an ego boost when people ooh and aah over their stuff, and as a social outlet. For sure- them undercutting market value hurts my business; I don't like it. But that's not their problem- nor should it be. At the end of the day, we are in a market driven society. I chose to make a business doing things I love, and I made that decision knowing well that a portion of my competition will not be profit driven. It sucks, yes- but it's what I signed up for with open eyes.

In the end- MOST hobbyists make us look damn good in comparison. And those that kick butt? I don't know- I guess all I can do is wish them luck and envy them the financial position they're in where they don't have to make it as profitable as possible.

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