The Politics of Pricing

Deciding how to price my products has probably been the hardest thing to do. The age old battle of underpricing to get huge orders or pricing high so you can make money on small orders is a constant issue with DipSticks.


The pretzels themselves don't necessarily have expensive ingredients in them, so why do I charge $3.50 for the small 2 ounce pretzel, and $7.00 for the 4 ouncer? Well, time is money. And I spend a great deal of time on these.


Most people don't realize that the 50 cent candy bar, or the chocolate covered pretzels that are 3 for $1 that they're buying in the store are mass produced. They churn out millions of these per hour on a huge, ridiculously expensive conveyer belt based machine. In a lot of cases, no hands ever touch these candy items. No personal attention is ever given to them, they are just products to be manufactured for the masses, in turn for huge profits.


DipSticks, however, is very hands on. We hand apply every label (or hopefully soon, every hang tag), we hand dip the pretzels into caramel, hand dip said pretzels into random tasty ingredients, and then...you saw this coming....hand dip them into chocolate, sprinkle cute toppings on by hand, and drizzle adorable, artsy fartsy little chocolate swirls on each one. Then, once these hand dipped pretzels have set, we place each one in a cellophane bag, by hand. Then, each bag is sealed and trimmed by a machine....that we use our hands to operate (you thought you had me on that one didn't you?). And finally, each one of these babies are hand tied with raffia.


So, you see, lots and lots of time, and personal attention are given to each and every one of our items. We don't want to scare people off with our pricing, but we also don't want to make these for free. We hope people appreciate the very hand made nature of our products, and that we put love and care into each one. A trend does seem to be appearing that indicates consumers are appreciating, not only hand made items, but local items as well. I hope that trend remains, because I for one love a unique hand made item and would pick it before any mass produced candy bar any day.


While our pretzel pricing is pretty much set, our Caramel Apple pricing is still a little up in the air.


In comparison, DeBrands charges $20-$25 for their caramel apples. Mrs. Prindable charges $20-$26 per apple, while Amy's Candy Kitchen sells her apples in the range of $12 for a simple apple up to $16 for more decadent ones. Each of these apples weigh the same as ours, some are more decorative, some are less.


We are thinking of charging $12-$15 for our Caramel Apples. They weigh 1 pound, 2 ounces, are completely rolled in ingredients, and completely drenched in chocolate. (some of the above mentioned apples aren't completely covered in chocolate).


Does this price seem fair? We can make 200 pretzels in the same amount of time it takes to make 30 apples, just to give you a reference. (with that calculation, technically the apples should be $20)


Our Dippity Do Dahs are sold 4 to a package. We're leaning towards charging $2.50 for this, even though the total weight is 2 ounces, which is what the $3.50 single pretzel weighs. These take less time though, and are using leftover pretzels, so we can justify the lower price.

Keep in mind, too, that when selling these items wholesale, our clients want to charge double. So, when deciding the price for our items, we also have to take into account that we'll get half that for wholesale orders. We make far less per pretzel, but it is usually made up in the quantity.

Pricing isn't easy. You don't want to overprice, but you obviously have to make some kind of profit, or you'll never grow. We don't want to price ourselves out of business, especially since we're still very unknown and have lots of opportunity to grow.


A delicate job, but a necessary one that hopefully we will succeed at, without alienating ourselves.

What do you think? How does the quality of a hand made item rank in your buying lifestyle? Do you have recommendations or other pricing strategies? Let me know in the comment section!