Determining the retail price of your syrup

[Clan Delaney]

It's always bothered my that I had no idea how I was pricing my syrup.

I'm a strong believer that I should be making money doing this (http://mapletrader.com/community/showpost.php?p=51678&postcount=26), no matter how small my operation may be, or how large it may become. My wife had played a large part in this. She's a knitter, crocheter, and established crochet designer, and I have listened on countless occasions as she's pointed out examples to me of others in her field who sell finished products at prices that can't possibly be paying for the time that went into making them, and barely cover the costs.

When I started, I can't even remember what I was charging for a pint of syrup, but I'm almost certain that it was less than my closest neighbor producers. As of last year, I was almost completely satisfied that my prices made this venture worthwhile for me. I actually think that they're higher than my neighbors now and I have yet to have a problem selling what I make.

My problem (and I always seem able to find one) is that when I raise my prices, as I thought to do this year, I was never sure how to go about it. For the last few years I'd been using a couple of formulas that were discussed here, both involving pricing your smaller containers based on a percentage of the gallon price, or a percentage of the price of the next largest container size. And that worked. What kept bugging me though was that gallon price.

Where was I getting that gallon price? I'm sure that in the past I had used: the gallon prices of my neighbors, the price of a grocery store retail gallon, the price to purchase a bulk gallon, the price to sell a bulk gallon and the price the Association sold gallons for at the Big E. All of those gallon prices represented something to someone, but I couldn't say that any of them truly represented what it cost ME to make and profit off a gallon of syrup.

So I sat down and hammered out a formula that does exactly that, or at least as close to that as I can manage. I'll spell it out in the next post.....

[red maples]

Where ever I go I look a prices no matter if I am in a tourist shop where syrup retails for $90 a gallon or the farmers markets where the prices are much more reasonable. supermarkets, specialty food shops etc. Its hard to base the price on the work yoou put in on it. If that were the case and you actually added up all time you put into it you would have to charge $200 a gallon. depending on the size and type of your operation.

So for me its basically market pricing. and I usually look at pint and qts and if aval then 1/2 gals.

For my prices I have never had anyone say that it was too expensive, Actually all my customers like my prices. Market basket has the cheapest retail at I think last I looked it was about $15-$16 a quart but I think its mid quality at best. According to my standards anyway. And the next step up from there is local farmers markets at about $10 pt, $18qt, $32 1/2 gal I think $51-$52 for gals. I charge the same. Shaw's has Commbs I think at $22 a qt, Food specialty stores having local syrup are between $23 and $26 a Qt. and touristy spot well we all know can be as much as $36 a qt. rip off as far as I'm concerned!!!

So basically its market value and you need to stay in check with the competition. You can't price yourself too far out of range.

Hope that helps

[Clan Delaney]

I wanted a formula that tries to take into account my time, a profit, and as many of my costs as I could pin down. Here it is:

I started with the living wage for my area for a family of 4 (http://www.livingwage.geog.psu.edu/counties/25015), which is $31.75. Since that number represents a family income, that means my time should be worth half of that, or $15.86.

In time, it costs me 4 hours to make a gallon of syrup. This assumes 10gph from my evaporator, and uses the conversion rate of 40 gallons of sap to 1 gallon of syrup.

So, to pay for my time, my gallon syrup price is $63.44

To price the smaller containers, I divide that price by the container (by 2 for half gallons, 4 for quarts, etc...) The pint, then, for example: $63.44 / 8 = $7.93. To this I add the container cost, $1.21, and then added 20% for my profit, which makes the price of my pint $10.97, or a nice round $11.

It was interesting to see that this price is actually less than the $12 that I was already selling the pints for. The prices for the quarts, half gallons and gallons technically go up, but I'm okay with that, knowing that those numbers represent something real to me.

I'm not sure how well this specific formula would work for those with the ability to make multiple gallons per hour. For example, an 80 gph evap would only take half an hour to make a gallon of syrup. This formula would price that gallon at $7.93. It only takes into account the boiling time, and not the collection time, the maintenance time, etc. Those become harder and harder to pin down, but it can be done if you keep good records and average it over the course of the season. It also doesn't take fuel and maintenance costs into consideration. But those too can be found over the course of a season, and can be represented as cost per gallon, and added into the price.

For me, for now, this looks like it will work for me. I keep the 4 hours to produce a gallon fixed. My evap doesn't actually get 10gph (more like 5 on its best day) so this number represents boiling time plus wood time, plus field time. As my investments (paid for from my profits) increase my efficiency and I'm able to produce a gallon in less time, so will my profit increase. As the living wage fluctuates, that too will change the price. When fuel costs become $$, not just labor, I'll calculate those and figure them in.

In the meantime, I need to get this years prices posted!

[maple flats]

I don't think a real small producer can plan to make the same money on a gal as the big guy but the retails should be about the same. The customer should not pay more because you are small. On the other hand I think many producers under charge. The realistic price should really be bases on a medium size operation and what they can produce in a hour if you are going to calculate an income per hour. Then as the operation get more efficient the equipment aiding the efficiency is also making some money. If syrup on a 2x3 evaporator boiling raw sap it is not worth more than that which was made on a 6x18 evaporator with steamaway boiling 10% or even 20% sap. Your incentive to get bigger and more efficient is that you can make more syrup and at a greater efficiency than when small. The consumer should not have to pay more because of inefficiency in production just as the huge highly efficient producer should never cut the price because they make $2000 or more an hour while boiling. That efficiency requires big investments that make their own returns.

[spud]

Having bulk syrup prices set each year is very helpful for sugarmakers. Although for those who want to bottle their syrup and sell retail that's a different deal. Retail price should be whatever you want it to be. Not many people care as to how much time and money you spent on setting up your operation. Bottom line is how much do you want for the stuff? If your looking for $18.00 a quart but the teenager trying to pay for their college is selling for $13.00 you may have a problem. When i was about sixteen my mom sold about 50 gallons of my syrup to her co-workers. At the same time there was another employee trying to sell some for $5.00 more a gallon. This guy was real mad at me and my mom and felt we were hurting other sugarmaker's. I think the only one that was hurting was him because my wallet was filling up fast. If you see someone in your area that is selling for way less on the same quality syrup there may be a good reason. There are people ready to lose there homes. There are others who will have power, heat, or internet/cable tv shut off if they don't pay up real soon. The ones selling for less are not the enemy. They MAY just need their money quicker so they lower their price to speed things up. I always got a kick out of the people that would not budge on their price even know their syrup was not selling. I enjoyed selling most of my syrup bulk just because i wanted my money fast.

Mike

[red maples]

Patrick

the only thing that I see as a huge thing and you did comment is field time. There is alot of time there. and by field time I mean everything and everything leading up to the actual boiling time and everything after the evap is cooling down and after the season is over. thats why I say it would be more like $200/gal charge for a smaller producer. adding the variables of the your system / sugarbush set-up is huge. just like adding air/steamaway pans/ RO etc etc etc to your evap.

back to field time::
cutting hauling splitting wood
running tubing
setting out buckets
collecting sap
taping trees
bottling syrup
making candy and other stuff
peddling your syrup and maple goods
Cleaning geez forever cleaning!!!
book keeping and hopefully counting a little money in there too:)

and everything else you can think of. depending on the size of your operation is how all these variables play.

I don't think of it like that though. I look into the future a little when I get to a point where I don't have to put as much money into the sugarhouse except for little upgrades new stuff where new is needed and bottles etc.

[jfroe939]

I agree completely with Spud/Mike. Make your price what you want it to be. You're either going to offend the maple producer down the street by making the price too low or offend customers by making it too high. Let your market determine what you can sell it for. At the end of the day you either sold syrup or you didn't. I had considered selling syrup at a local farmer's market this past summer. The market organizer said I'd be one of a few guys selling syrup. I tend to sell my syrup cheap as I'm not looking to eek the last penny out of people and I'm fine with that. I had visited this market before and I knew there were guys selling quarts for somewhere near $19 per. I mentioned this to the organizer - being that I probably plan to come in a little less than the current sellers. Of course right away he snapped at me that I better be prepared to get some nasty looks because those higher-priced sellers won't like that. Further, he said that some of these people make a living at selling their stuff here and that by selling a little lower I'm not going to make them happy. Now I'm just a hobby sort of producer. I don't have problems selling out of syrup at the end of the year as my current demand is strong. By going to the farmers' market I was just sorta looking to expand the customer base and see if I could further increase my demand. Ultimately I decided not to sell at the market. I don't want to put up with cranky folks that can't adjust to someone selling cheaper syrup. What you sell your syrup for is really just about covering your costs and about your mindset. I know I've got my expenses covered. I grew up on a dairy farm and we couldn't sell milk at whatever price we wanted. We were just a small family dairy farm and the price was the price - simple as that. So to be able to make a few bucks in spring from syrup is simply a bonus to enjoying being out in the woods. Of course, I'm enviting those maple producers out there with mega-bucks invested to hammer me because of all their expense they have poured into their setup. That's fine. But when the kid down the street sells their syrup a little lower than you don't complain. That's just the market. Water rolls down hill. Like any business, if you can't make money doing what you're doing then don't do it anymore. Nobody is lobbying for higher milk prices for dairy farmers. As such, a lot of dairy farmers are leaving the scene because it's not worth it anymore. When syrup becomes too costly people will just stop buying syrup and choke down their Aunt Jamima at a fraction of the cost. Bottom line is to get what you can get for syrup. Your customers will let you know when you're overpriced. But I suppose, too, they won't let you know when it's underpriced either. Best of luck sugaring this spring! Jason

[BryanEx]

This topic comes up every year in one form or another and it's always interesting to see the different philosophies involved in pricing. My business is based on people making their own syrup so I don't have a lot to sell directly each year. I base my gallon price on what the "big guys" in my area are selling for and make no apologies for my asking price on any size. I know I sell out every year so if one customer does not buy another will. I can see cost of production playing a big part for the majour producers but for the smaller guys that in all honesty would produce even if they didn't sell any I don't think you can come up with a formal profit ratio formula. You can sell low and have fun making more or sell high and maximize profit but either way, for the vast majourity of Maple Traders it's still a (hopefully) self-supporting hobby.

[Clarkfield Farms]

...for the vast majourity of Maple Traders it's still a (hopefully) self-supporting hobby.

wow, to think of any hobby being self-supporting is mind boggling! lol! I'm liking this more and more already.........:)

[OneLegJohn]

I gotta know where the word "mersh" came from.

[WESTVIRGINIAMAPLER]

Matt(Royal maple)

[maple flats]

comMERSHal. Just trader lingo.

[3rdgen.maple]

It would be awesome if I could do all the math and determine my pricing on syrup but here is the deal. It would be alot more than my local market would be willing to pay. So I have to stick with the local pricing to be competative and I am still a little on the high side for my area (thanks to the %#$&*^@ Amish). But looking at Clans calculations he is close with my pricing. $64 a gallon $32 half $16quart $8 bucks a pint. Glass however is a bit more pricy even though I can buy glass cheaper than jugs but I custom etch the glass so its $12 bucks for 12 oz and $10 for 10 oz. Those are the sizes I use and I give no price breaks for volume. The way I see it is why would I give a break when I still put the same amount of work into producing it and if someone doesnt like it I still sell out but I yet to have anyone question or ask for a break. I ran out last year and had to turn people down and many called and preordered for this year after they bought some local Amish syrup they decided my price was worth it.

[802maple]

I gotta know where the word "mersh" came from.

Brandon, is pretty much spot on. Matt and I were boiling late one night a few years ago at his place, late in the season and we were making less then great syrup. It was a bit strong even for commercial and after a voyage with the captain, Matt named it mersh and mersh it became. To give you a idea go to his site and watch the video of the frog going accross the floor and that will tell you how late it was in the year

[highlandcattle]

This is a real tough subject, as it's different for everyone. We trashed EVERYTHING this past year and invested(cash) to upgrade. We need to try to recover quickly, as we're not among the wealthy, so our price will be $12.00 per quart, which is what I sell where I work. This is an INCREASE because of all the money we had to invest this past year. Yes, everyone is MAD at us and screams and yells,but they ain't us! I can't afford to have it sit around until I find someone willing to pay what the others are getting. I want to make some $'s , but also have it so the average person can buy it! Times are real tough and this is a luxury item!

[Farmboy]

I dont know where in NY you are but $12 a quart is cheap. I sell for $20 a quart and $12 a pint. I live on the edge of the suburbs so it helps get good money for the syrup.

[Sugarmaker]

Good comments from a lot of perspectivies on syrup pricing.

Our prices are usually a little higher than others in the "sugarhood".

(Hey I like that, you can use it if you want:) just remember where you got it!)
May keep pricing the same this year??? Just sold gallon for $48, and couple halves for $28 each today.
Have always used this rule of thumb: Set the gallon price where you want it. High low I dont care! Then muptiply that gallon number times .60, round to the next dollar [ up or down your choice] [I like even numbers, so shoot me] multiply that new number by .60 and round to the next dollar and so forth.
What this does is cover the extra cost of more smaller jugs and the time to bottle them.
So if I rasied the price to
$52 per gallon x .6 = $31.20 [ round up to $32 for half gal.]
$32 per half x .6 = 19.20 [ round up to $20 for qts]
$20 for qts x .6 = $12.00 [I dont like 13 and we sell a lot of qts]
$12 for pints x .6 = $7.20 [round to $8 for 1/2 pints]
$8 for pints
Our 250 ml glass would then be $12 same as a pint, due to the cost of the glass.
Considering increasing prices this year, as I feel that the qty of good syrup is going to be scarce. Hope I am wrong. Gas, groceries and everything else is going out of site and I just put a couple thousand more into syrup stuff for 2011.
The question is does this cover my cost? I dont think so does it help get closer to break even, yes!
Chris

[3rdgen.maple]

I think maybe I should just quit making syrup and buy some of your guys syrup for 12 bucks a quart and resell it. I would be farther ahead and save on alot of labor. 12 bucks is cheap and no one should complain about that price especially if they had any clue as to what we invest in money, time and labor to get the end product.

[Bruce L]

We set our prices by what the local market is.We have alot of producers in the area,so we all try to be within close range of each other.We have one producer who refuses to raise his prices to the level of ours as he says he has one customer who complains about the price every year,guess what,that's part of retailing anything.One individual approached my wife last year and warned her that the competition down the road from us was $5.00 less a 4 liter(about the same as a U.S gallon I think,she told him he better go there to buy it(I know for a fact he has quality issues and has trouble selling his syrup)He came back to us a week later ready to pay our price,but we are always sold out once the season ends.By the way our prices $55.00 4 liter,$30.00 2 liter.$20.00 1 liter,$10.00 1/2 liter,and as I stated before,syrup sells as fast or faster than we can make it.

[ennismaple]

Bruce - I totally agree with what your wife did. I don't want to be the cheapest syrup around either but you have to know what the market will bear in your area. Thank goodness we don't have the same prices in Eastern Ontario that the producers in Kitchener Waterloo get for 4L! Their prices are lower than what we charged 15 years ago.

[wally]

there is no "correct" price for syrup, other than "it's worth whatever you can get for it". if that's $40/gallon, so be it. if it's $70/gallon, so be it.

for the OP, you really have to include all the labor involved in the production, and all the capital expenditures, not just the boiling hours. otherwise, you have severely underestimated your costs of production. scale of operation will play a role. there are benefits to being small; there are benefits to being large. (worker's comp vs no worker's comp; insurance; etc)