How does everyone set the prices for your sauc that you are selling? Another question I have is I haven't done all the research I need to do to figure out how to get started in selling my sauce here, but I have a couple of guys who run a mobile hotdog cart that wants to use my hot sauce as a condiment on their stand. So I guess the question should I do this or wait til I figure out the local laws and such first?
How to figure out a price point
- Thread starter creardon
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Thats great you have some interest! Although I would probably hold off until you have all your approvals and insurance. You don't want anything to go wrong or end up being liable for something. With pricing if you are going to get others to buy it off you too at wholesale you need to figure out how much it costs you to produce including but not limited to labour, ingredients, bottles and labels, a price that you want, what they would want as profit and what a consumer would be willing to pay. Good idea is to look at other similar sauces that are already being sold in your area to see if you could sell around that price as well. Start contacing your local authorities to get the ball rolling first, if you want to do this you need to take it seriously.Research, research,research and a lot of hard work. Good luck with your venture.
I have started doing some research, but with my current job, we have gone through a lot of changes and it has been hard to do all that i need to do.
Just don't rush it or skip any steps because then you might have to backtrack and fix up a lot of things. There is always a lot more to it than you think
Yep that is the way to go. Contact your local health department too to see what criteria you need to meet. Welcome to the wonderful world of sauce making
creardon:
Here is a UK AG extension publication that I believe might help you along in your research.
"Home-Based Business:Making & Selling Food Products in Kentucky"
http://www.ca.uky.edu/agc/pubs/fcs9/fcs9100/fcs9100.pdf
Then,if you are planning to make it here in town,you'll want to call the Fayette County Health Dept.for specific local laws and ordinances.
But be aware, Fayette county does not allow or issue permits to run home based catering business. I've already checked in the past.
This site explains the hoops you'll need to jump through in Fayette Co. to move into an existing commercial kitchen, including the types of inspections and permits required.
http://www.lexingtonhealthdepartment.org/template.asp?id=261
Best of Luck.
Thanks Chili Monsta. I maybe able to get access to a commercial kitchen here in town. Like i said though it is going to be at least a year before I can even start making it commercially. Since I will have to palnt a whole lot more plant next year. So that's why I am starting the research now, as i can go ahead and get all my ducks in a row before jumping into it. I basically want CMA before I get started.
salsalady
eXtreme Business
Wildfire said it well, and I'd like to second her comment to get the ducks in a row before selling. You really do not want to sell before being properly licensed. Not only are you at risk, but the cart owners (or any other business owner whom you might wholesale to) are at risk of a lawsuit if something were to possible happen.
Generally, you price three times your cost price.
One third for costs, one third for profits and one third for promotional expenses including transportation etc.
One third for costs, one third for profits and one third for promotional expenses including transportation etc.
When I began researching my new venture (see www.chillichef.com) I began with a business plan and budget. After calculating my TOTAL cost of production and ALL my overheads (including a salary for myself) I then took that total amount and multiplied it 3.5 and then divided it by the number of units I intended to produce. This then gave me a unit price. I then did my market research to see if my price was within the ball park. I was pleasently surprized to find that I had hit the lower end of the retail price range which then gave me room to move.
As far as wholesaling your products, you will need to get considerable economies of scale built into your production as retails can demand a profit of up to 50% for their final retail selling price AND they will NOT want you to compete with them by having retail sales that undercut their pricing.
Every comment I have read on this thread has an underlying message: RESEARCH, RESEARCH, RESEARCH!!!!
All the very best
CC
