Interesting and same teacher as the salt bar tutorial. That said, I guess I would hope people find their best audiences so they don't have to take whatever they can get like the goat milk soap I saw on ebay. It must tough at a fair where you may be pricing your soaps a little higher according to your materials and effort and someone a few tables away is thinking, this is a brutal economy, better set practical prices so I don't turn people off.
Few people seem to understand the price of essential oils. They never thought about it unless they shopped at a health food store and saw them and were like, wow, I had no idea patchouli oil cost so much! Therefore a patchouli soap should be very expensive. Unless you can find a good fake and I honestly don't think that many people would care because they just wanted the nostalgic scent. Lavender, probably more care because they read about aromatherapy.
It seems like once you step into making soap, you're in a different world. Then to convince customers of the awesomeness of your ingredients, staying within federal guidelines about not making cosmetic or health claims, would be tricky to do. That's probably where eye-candy, highly fragrant soap is easier to sell, though not easier to make. I made plain as sin lavender essential oil goat milk soap and to have somebody pay $6 for it they'd have to appreciate that it's worth it. Only my family and friends do as of yet because I told them.
I bolded the parts of your response that are essential to understanding sales. One, people have no idea what your supplies cost. Nor is it their business. But, shoppers are looking for a great value on the money they are willing to spend, and as the soap expert, it's your duty to tell them.
I don't believe for a second that economy or perceptions of economy or place have any bearing on what people will spend. People know what their budget is. You don't, but it's none of your business either. As long as people keep using "the economy is too bad to pay that price," a few negative things will happen:
1. The economy won't improve
2. Independant merchants will falsely think they have to lower their prices and devalue their work to make sales
3. The lack of products moving lowers demand for products and make the economy worse.
No one at SoapWorld, Sally Beauty, Kroger, Piggly Wiggly, or any other store had a problem raising their prices when inflation went up. You have to, also. The person selling rock bottom may or may not sell their goods, but at low prices, they will not have enough money to justify staying in business or even replacing their product.
If you sell your goods for what they are worth, you will probably grow slower in this economy, but you create a longer history of stable sales and slow upward growth. Growth trends are a key in long-term success. Short sales = short lifespan.
On a final note, it's complete fiction that the world of soap has different rulesets then other kinds of businesses. Every industry segment has rules and regulations to follow and different market considerations to bear. As a hairdresser I consistently turn down $75.00 highlight jobs on hair that isn't worth my while to do unless I'm getting paid at least $100.00. $25.00 is a big difference, and if the customer can't pay it, they can't pay it. Sure, I don't get the job, but I don't need it. I'm not desperate enough to lower my fees or take the cut. I don't need predator clients, either. Pay what I'm worth, or find someone who you can afford to pay.
I guess what I am trying to say, inarticulately, is it's not about getting the money. It's about
how you get the money. Are you willing to let customers dictate what your prices should be? Will you lower the value of your work and cut into your profits to make a few dollars? Is it worth it to you to take a lower profit? Things to consider when you're deciding if you're making is going to cover that next bottle of patchouli that just went through the roof.