advice please

[Brian Bush]

I have been approached by a new venture local to me who are opening a shop specialising in all things local.
Yesterday I had a visit fromthe people concerned to ask how much I wanted for my 12oz jars of honey wholesale. I thought £2.75 was a fair figure but they wand an enormous mark-up which I believe will make the product uncompetitive.
I retail at the door 12oz honey at £3.20 and comb at £4.00
Please can anyone tell me what I should be asking for labelled and jarred honey and ross round honey combs wholesale.
Thanks

 

[madasafish]

" I thought £2.75 was a fair figure but they wand an enormous mark-up which I believe will make the product uncompetitive.
"

That is their problem not yours...

 

[Marvin]

This is a premium product that ticks all the boxes for the shop. If the people really want local, they will come back to you. Don't undersell yourself or your honey.

Courage!

 

[Rosti]

Look after your required return, let them worry about theirs. If they are specialising in 'things local' then they may need you rather more than you need them. If your normal route returns £3.20 / 12oz then thats your price to them. You only need to consider their offer / further negociation if you have excess stock that you can't shift through your normal route. Also check that they are purchasing it from you out-right and that its not sale or return leaving you with a potential pile of short life honey you cant shift (and a long lead before you see your money).

 

[rae]

We sell our 12oz hex jars to the local butcher for £3.50. He marks them up to £4.50 (or maybe £5 now), and they fly off the shelves. We need to take him another 50 or so this week. We're not a million miles from you (Berkshire), so this pricing is probably OK for you as well.

We only sell the occasional 1lb jar at the door for £5.

 

[greatbritishhoney]

I wouldn't let it go for less than £3 per 12oz

 

[Chrisfnvs]

We sell ours at £2.70 for 12oz and £3.50 for cut comb we have to sell for that amount as a local commercial beekeeper has gone round to all our outlets and undercut us, leaving us to have to find new outlets to supply, (which we have done) but we have had to match his price to sell any at all, I feel that it is very short sighted of him as i am not sure how he can make a living from the prices he charges, i was not at all impressed i can tell you, I will not reduce my price any further as i consider them to now be at rock bottom, i would rather feed it back to the Bees !

 

[DanBee]

If your normal route returns £3.20 / 12oz then thats your price to them.

Yes but no but... if the retail price supported locally is £3.20, and you're selling in decent regular quantities to shops, you need to be mindful of a minimum 30% mark up that shops work on. They can do what they like, of course, but that's how things are generally factored.

The retail mark-up is the 'cost to sell' for the producer. If you spend six hours standing in the rain at a farmer's market, you've earned the retail mark-up, not the total takings - after all, in one hour you could have delivered more than you'd sell at market. You're effectively discounting by that retail mark-up so that you get paid up-front and somebody else can hang around waiting for customers to come along. Fundamentally, if you want the full price or don't mind waiting for the customers to come to you, sell it yourself rather than through shops.

The mark-up is calculated as 42% onto the cost price, or 30% off the shelf price. So 70% of £3.20 gives a wholesale price of £2.28. Looking at it the other way, your £2.75 wholesale would equate to a shelf price of £3.90.

The pound-per-lb is the usual benchmark, whatever size jar you use. £3.90 works out at £5.20/lb. Locally we can ask £6/lb. I sell into a number of premium outlets that have a higher mark-up and order regularly.

I saw pound jars of nicely presented local honey on shop shelves at £2.55 last summer. That was a maximum of £1.78/lb to the beekeeper... madness.



(retail = selling jars to joe public
wholesale = selling in jars to retailers
bulk = selling in buckets or drums)

 

[MandF]

We sell ours at £2.70 for 12oz and £3.50 for cut comb we have to sell for that amount as a local commercial beekeeper has gone round to all our outlets and undercut us, leaving us to have to find new outlets to supply, (which we have done) but we have had to match his price to sell any at all, I feel that it is very short sighted of him as i am not sure how he can make a living from the prices he charges, i was not at all impressed i can tell you, I will not reduce my price any further as i consider them to now be at rock bottom, i would rather feed it back to the Bees !

In my experience local honey consumers dont just go on price, and actually if a honey sells for more then it reinforces the fact that the local honey is different from each other, AND they would ask themselves why yours is more expensive.

The answer to the question above could be because you are a smaller producer, which they might want to support, or your honey is better "cared for", or better quality.

They also might want to try different local honeys, as the taste is different and is part of the fun of buying local honey.

So, dont change your price, and dont pull out of those outlets unless the outlet themselves isnt interested in yours any more. If the outlet is worried about taking a smaller margin with yours, tell them you are happy for your honey to have a higher shelf price.

Finally, price is one differentiator, another is the label, and this is something you can work on to entice people to your more expensive honey.

In the farm shop across the road they sell local honey from 2 producers (and want to take ours but we are selling ours direct no problem this year). One is £1 a jar more expensive, but the shop told us that one sells more, she thinks because of the label.

 

[MandF]

Yes but no but... if the retail price supported locally is £3.20, and you're selling in decent regular quantities to shops, you need to be mindful of a minimum 30% mark up that shops work on.

I think what Rosti was saying was, if you can sell your honey for £3.20 elsewhere (direct or indirect), dont accept less for it just to sell it in a shop. Unless you have a surplus which you want to shift.

 

[Chris B]

Retail, wholesale or bulk, you should price it so you can just about sell it by the time next season's crop is available. If you sell it by Christmas then you are cheap, and if your honey mountain grows year on year you are expensive. It might take a year or two to find the level. Meanwhile £2.75 sounds like a reasonable starting point, and let the shop worry about their own mark-up.

 

[Rosti]

I think what Rosti was saying was, if you can sell your honey for £3.20 elsewhere (direct or indirect), dont accept less for it just to sell it in a shop. Unless you have a surplus which you want to shift.

Thanks MandF that was exactly what I was trying to say! The shop only wants to sell your honey because they feel they can profit from it. They aren't a registered charity so no need to give them your profit (unless it is an unsaleable surplus)!