Pricing - a Cautionary Tale

[Guest guest]

Pricing your product is a tricky business, and

you have to take many current and future variables into account:

 

Materials

Labor

R & D

Rent & Overhead

Advertising

Website

Contract Manufacturing

Employees

etc., etc.

 

So many homegrown businesses start to fail when

they start to grow because the owner didn't

factor all of the above, plus some I've forgotten

to list because I'm jotting this message down in

between many errands today, so, basically, their success kills the business.

 

Many of us won't reveal how we arrive at our

price point. It's just too complicated, too

personal. If you're really serious, and you wish

for your business to grow beyond microbusiness

size, you have to be realistic, and I'd advise seeing an accountant. Early on.

 

This message comes from a very public, very

heated debate going on in the perfume forum world

over niche perfumer Andy Tauer's move to....well,

I'll let you read it from Andy's blog so I don't

misquote anything.

http://www.tauerperfumes.com/blog/ Scroll down to

read his post from yesterday " This is the End "

and then read the most recent " This is the

Beginning " . In the former, he announces a price

change, and in the latter he's reacting to the public comment over it.

 

The debate is quite heated on the POL and the

Basenotes forums. True, it is a small handful of

folks who are making a big stink over it, but

thousands read these forums, and mostly don't comment.

http://perfumeoflife.org/index.php?showtopic=13578

http://community.basenotes.net/showthread.php?t=190962

http://community.basenotes.net/showthread.php?t=191025

 

We all who know Andy and know the business know

he made a strategic error in correcting a

problem, and it's very public, which has an

" ouch " factor to it. We who know Andy know that

this is hurting him on a very personal level, as

he is a thoughtful, sweet, kind person. I feel

very sorry for him, and wish there could have

been a better way that he could have handled

this. In hindsight, I'm sure he feels the same way!

 

Many artisan natural perfumers state that they

want to make their perfumes affordable, and the

bottom line is we all want our perfumes to be

affordable, but they're fooling themselves by

pricing their juice low. I don't care if they buy

the 30¢ bottles from Sunburst to keep costs down

(btw, stuff from Brosse of Pouchet can be had for

$3 - $8, so it's not an elitist move to use them)

handwrite the labels, bottle and pack and ship

everything themselves, they MUST build in the

cushion factor. Don't, and you may be doomed.

I've heard of many soap and toiletry makers that

have folded their businesses over this.

 

If the fevered backlash can sting at Andy, a very

well-liked and respected perfumer on those

forums, it can happen to you. Perhaps if you're

not as well-known as Andy, if your business

hasn't grown as fast, you're not well-known in

the blog and forum world, you won't get fierce

feedback. But if you're not known in the blog and

forum world, your business probably didn't grow

as fast as Andy's, that's just reality. He

blogged, moved around the forums, made friends

and customers there, and his misstep is very

public. Yes, you may survive it if it happens to

you, as I'm sure Andy will, but the hassle and

the criticism will linger in many's minds.

 

My advice is be prepared, get your business

finances in order first, and avoid this kind of problem.

 

 

Anya McCoy

of Natural Perfume http://anyasgarden.com

Artisan Natural Perfumers Guild http://artisannaturalperfumers.org

Natural Perfumers Community Group