misc Pricing

Dustin

Dustin

My new issue. Pricing. I've been getting quotes from co-packers that the final cost for my hot sauce in a 5 oz woozy bottle will be $3.10. This includes the 2 month fermentation process, 1 month acidification, straining the mash, bottling, and labeling. Most hot sauces are cooked and bottled right away, so I'm sure this drives the price up a little. Also, I need to pay for the labels myself, but they will be applied during manufacturing. This probably adds another 10-15 cents per bottle.
 
My dilemma now is trying to figure out what pricing structure to use. Of course I want to be able to make a little bit of profit in there somehow. But when I go into Whole Foods or HEB (our local grocery store), most of the 5 oz bottles of sauce I see are being sold at the $4 range. The grocery stores will want at least a 30-40% markup, leaving me in the negative if I want to be able to sell my sauce for $4.
 
Would you pay $5-6 for a habanero sauce that is all natural, or do I need to keep finding ways to drop my cost? I know at Farmer's Markets and specialty stores I could easily get $6 per bottle, but that is a whole different ball game.
 
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ajdrew said:
Reading this thread I am left with: My god how do you saucers do it?  Seriously, you must absolutely love what you are doing because wow.
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It's a hassle, but there's a big sense of satisfaction in seeing your own products on store shelves.  That's true for sauces or whatever the product may be.
 
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ajdrew said:
Reading this thread I am left with: My god how do you saucers do it?  Seriously, you must absolutely love what you are doing because wow.
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I work my ass off. Every single day. And yes - I love making sauce, and there's much satisfaction in having people enjoy what you make & winning awards and all that - but sales is hard work and not something I really love or aspired to do.

The fact is that making & selling condiments is a low profit, high volume deal - if you're an aspiring sauce maker and intend on doing it part time, that's not that much of a challenge.

But if you want to do it full time, be prepared to work a lot. And wholesale even more so since margins are even lower.
 
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Lucky Dog, yes I am starting to realize that there are only two ways to go.  Create and sell your self so the margin is yours or have someone else do it (copack or employees galore) and take a tiny per bottle margin but wholesale your rear off. 
 
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