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You're Priced to Fail: What Candle Makers Need to Know About Margins
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#004 Pricing candles correctly is crucial for profitability, growth, and sustainability in your candle business, going well beyond the outdated 3x markup rule.
• Understanding your target customer and what they're willing to pay should be your starting point
• We price our classic 10oz candles at 5x cost ($5.50 cost → $26 retail price)
• When wholesaling, retailers pay 50% of retail ($13), still giving us solid profit margins
• Visit stores where your target customers shop to research pricing in your desired niche
• Differentiate your product visually to stand out in a crowded market
• Proper pricing allows for promotional strategies like "buy 3 get 1 free" that increase average order value
• Free shipping thresholds can encourage customers to add more items to their cart
• Consider your long-term costs when setting prices, as bulk purchasing will lower your per-unit costs
• Re-evaluate your pricing strategy every six months based on market conditions and performance
• Your margins must support discounts, reinvestment, hiring, and future growth plans
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Chapters
1. You're Priced to Fail: What Candle Makers Need to Know About Margins (00:00:00)
2. The Problem with 3x Pricing (00:00:01)
3. Understanding Your Target Customer (00:05:45)
4. Finding Your Price Point (00:10:25)
5. Calculating True Cost of Goods (00:14:12)
6. Why 5x Markup is Necessary (00:18:10)
7. Discount Strategies That Work (00:22:05)
8. Growing Your Business with Proper Pricing (00:24:50)
7 episodes
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