Date Posted:31 July 2018
We're changing our prices - but don't fret (they're not going up!)
The long version
Perhaps fittingly for a soap maker, most of my best thinking happens in the shower. Is it the subtle aromatherapeutic effects of essential oils as they awaken my thoughts? Well, maybe, but more likely it's the fact that my bathroom is quiet. It's a place of low light, plants and no electronic stuff to cloud my thoughts.
Even with low light, the bathroom is a place where we confront ourselves as we are - with no adornment. We see ourselves changing over time, the ageing process laid bare, so to speak. It's in this space, with an awareness of my changing self that I ask the big questions. How am I spending my time? Am I looking after my health? Am I focusing my energy on what matters?
And because work is such a big part of my life, my shower time ponderings also affect what we do at Washpool. My thinking naturally affects my home life as I continually try to nourish myself and family with healthy food and look for ways to incorporate more physical activity into my busy day. I also strive to raise thoughtful, inquisitive children who have a solid understanding of some of the biggest issues currently faced by both people and planet.
As a small business owner I'm in the fortunate position of having a direct influence over the philosophy and direction of my business and recently I've become clearer than ever about why I get up most mornings and head to 'work'. So what prompted this renewed clarity?
Typically when someone makes a product that people love the next step is to sell the product so that more ingredients can be purchased and the maker enjoys the process of making more.
Not long after that someone will ask if you also sell wholesale? Flattered by the interest the maker will usually do a happy dance and maybe even brag a little to friends & family.
What the maker might not realise is that once they take that first step into the world of wholesale there's a chain reaction that changes almost everything.
Let's say the maker can make a bar of soap for $2.00
In order to sell to the wholesale client they need to allow a profit margin and cover labour and overheads so they set the wholesale price at $4.00.
The wholesale client also needs to make a profit margin and cover labour and overheads so they set the retail price at $8.00 and then add gst, giving a retail price of $8.80. In addition, the wholesale client expects that the maker will not undercut them by selling at a lower price so their expectation is that the maker will sell the soap bar for around $8.80 too.
The potential retail buyer picks up the bar of soap, sees that it's completely natural and free from palm oil and exactly the type of product they want to use on their skin but that bar may now be considered a luxury rather than an everyday product.
Now, I know that our bars are every bit as good and better than bars of soap that sell for $9.00 to $12.00. I also think that our soap bars make awesome, affordable gifts. What I feel less comfortable with as our farming family struggles through yet another prolonged drought is that although I'm totally committed to making healthy choices, I would struggle to afford quality soap for my whole family.
What to do? Take a shower, think some more and an idea begins to emerge. What if we didn't build our pricing around wholesale? What if we went back to the way we were and sold direct to our customers? What if we served each of our customers ourselves - either in store or when we hand pack their online order? It's a radical idea as it goes against standard commercial models. It's risky as the potential reach and volumes could go down. Will I sell enough soap to keep my staff employed? Would we even survive as a business?
It's daring. It feels scary but here's what we've decided to do:
- We've become really intimate with our cost of production. Makers tend to vaguely work stuff out on small scraps of paper, guestimate an average and hope like hell they got it right. Not any more. We actually know how much each product costs to make, including ingredients, overheads, fair wages for our staff etc.
- We're adjusting our prices to cover those costs of production and allow a moderate margin for profits (or disasters). We hope it's profits. :) You can be confident that the prices you see are directly tied to the actual cost of ingredients and the making of your product with no needless 'padding'.
- We're selling direct to you, our retail clients at wholesale prices. We will no longer have to match the retail prices set by our wholesale clients. We're doing our own thing, going our own way and passing on the benefit to our direct clients.
- We're working hard to ensure that we still reward thrifty behaviours like buying in bulk or bare, while making the entry point for smaller purchases much more affordable.
- We've already introduced flat rate shipping so you have certainty around freight costs, regardless of where you live in Australia.
We're super excited that the products we make will be passed directly from our hands to yours. It already feels more intimate, more of a relationship of support, commitment and shared values.
Mostly, you'll see reductions in prices as we work through all that we make. The first changes will be obvious in our soap bar ranges, with others to follow in time.
In some rare cases, products will not drop in price and that's simply because my guestimates were plain wrong. While getting down and dirty with our costs we've had some cringe worthy moments where I realised I was actually selling wholesale products at or below our cost of production with NO profit margin. Ouch!
We're delighted to return to our roots, selling our product to you at the lowest possible everyday price.
We're under no illusion. The transition to a focus on 'direct to client' at lower prices will obviously have an impact on our sales volume. We're hoping to not only keep our staff fully employed but to grow and provide more employment for rural people. It will be tough getting by without our usual wholesale sales but we have confidence that you will continue to support us. If you value what we're doing, could I ask that you help us out by:
- Writing reviews for your favourite products, or reviewing us on Facebook, TripAdvisor or Googl
- Tell your friends about us
- Continue gifting our bars to introduce your loved ones to Washpool
The short version
For some time we've been trying to work out how to provide our customers with the ultimate in quality and value for the most affordable price. To cut a long (but interesting) story short we have made the simple but significant choice to offer our products direct to our clients at wholesale prices. What does this mean for you?
This means that we can provide you with quality products at a fraction of what you'd pay in a retail store. We know that in the short term this means the dollar value of each sale will be less but we hope that by making our products more affordable, over the long term we'll welcome new customers. If you want to support this bold (and slightly scary) move, could we ask that you help us out by: