If you’re like most of us, you didn’t think about the price last time you bought bread at the grocery store. Maybe you thought about it when you last bought eggs because, let’s be real, that was crazy. That’s all well and good, except now you’re baking your own bread, or making your own tacos or cookies. Now, you’re faced with an unpleasant thought:
I have no idea how to price this.
News flash, you’re not a major corporation with a dedicated shipping ecosystem, automated creation process, or competitors trying to drive you into the ground with lower and lower prices. You’re creating your food because it’s a passion (and maybe you’re even hoping to quit your boring 9-5!). That gives you an incredible advantage over your friendly neighborhood megacorporation.
Pricing Guides for Food Entrepreneurs
The Artisanal Advantage
Walmart became the United States’ largest retailer in 1990. They built an empire on the mission to have the lowest prices anywhere, anytime. They created their own distribution centers, let suppliers bid to them, and outsourced production to cheap overseas vendors. The result? Affordable, mass-produced items that service everyday folks sufficiently.
No one gets miffed when they purchase Walmart shoes, and the soles give out after a few leisurely hikes. The bananas might be a little worse for wear, but they were only 67¢ a pound. I still have joggers that I wear that only cost me 10 bucks from Walmart, and they are great.
So what do you have in comparison? How about love, attention, fresh ingredients, and customization? You have craftsmanship, quality, and a cultivation of your unique character, baked (or cooked, fried, assembled, etc.) into the food that you obsess over. Customers come to the farmer’s market, or your (ahem) beautiful Castiron website because they want to taste that home-grown touch of individuality.
And they should come knowing it’ll cost a little extra.
Like you, I have a side hustle. Instead of wizardry in the kitchen, I’m a literal wizard. Or as close as you can get. I’m a professional magician.
When I say I do magic, most people conjure up an image of their eight-year-old nephew clumsily holding out a deck of cards, asking you to pick a card with a gap-toothed grin. Not me, I promise.
But speaking of eight-year-olds, I actually priced myself like one in the beginning, doing hour-long shows for tens of dollars. And I was often disappointed by the reactions. Oh, I’d get a few people that would clap me on the back and tell me how great it was. But I felt like they weren’t taking me seriously.
I was right. Because I wasn’t taking myself seriously.
Alex Hormozi, a brilliant businessman who’s grown his and others ventures to add lots of zeros to the bottom line said this in $100M Offers:
“If you have a ‘commodity’ offer, you will compete on price….Your Grand Slam Offer, however, forces a prospect to stop and think differently to assess the value of your differentiated product. Doing this establishes you as your own category, which means it’s too difficult to compare prices, which means you re-calibrate the prospect’s value-meter.”
Pro tip: don’t price your cookies at $100 million. We anticipate your customer count dropping if you do.
But the principle is still true. When I started selling (and pricing) myself as a corporate magician, the bids and money followed. And the crazier thing, so did the reactions. All the sudden you would have thought Harry Houdini himself was performing, not some scrawny ginger kid.
- Higher prices indicate superior quality, leading to positive associations with your brand.
- Differentiation from the mass market, attracting customers who appreciate finer details, distinct flavors, and your personal story.
- More revenue per sale, allowing you to invest in better ingredients, equipment, marketing efforts, and overall growth.
You’re not selling to everyone, you’re selling to customers who appreciate art. If you price like the grocery store, your customers will expect grocery store-esque service, quality, and taste. And, you’ll leave your fellow food artisans out to dry by undercutting their prices.
Price Like You Mean It
You’re not Walmart. Or Sam’s Club. Ok, both Walmart, you got me, but you get the point. The actual point is, stop acting like the megacorporations. Take pride in your work, and price it appropriately. Hint: your price should be higher than the grocery store 9 times out of 10.
To help you price your specific food types, we analyzed 6,225 products in Castiron shops, across 54 unique states, provinces, and countries across the world.
If you’ve been frantically asking Google “how do I price my cookies?”, “how should I price my cakes?”, or wondering about the pricing for whatever you sell, stay tuned. We’ll answer your questions on how your fellow food microbusiness owners are pricing their cookies, cakes, and everything in between.