As makers of artisan chocolates, we’ve long taken the position that you can charge a premium price if you put out a premium product, and that there will always be a segment of the market that will respect you for that strategy.
Pricing product at retail is not for the faint of heart. After taking into account raw materials, labor and packaging, you try and find a fair price that gives you margin, and doesn’t test your customer’s resolve to staying loyal. As with almost everything that is made for consumption, there are price fluctuations beyond one’s control. Sometimes those costs are passed on, sometimes they’re absorbed.
When fuel prices rose dramatically a few years ago, freight companies imposed fuel surcharges on deliveries. It was seen as a temporary measure that would correct when energy costs stabilized, and retailers for the most part had to eat the increase.
When the price of dairy went up, as it’s prone to do three or four times a year thanks to our provincial marketing boards, we may have raised prices, or tried to trim non-essential operating costs.
When government introduced taxation on things that were previously exempt, it caused prices to rise at the till, but it was generally understood that we were simply collecting on the Crown’s behalf, and that we didn’t actually get to factor any of that new price into our bottom line.
The pressure on price is constant, and as a small business owner, it’s unnerving when things happen that you know will cause prices to rise, but which you have no control over.
Last week, a hedge fund manager in Europe tried to corner the market in cocoa. He bought up nearly all the physical inventory of cocoa in Europe, and that has led to speculation that prices will rise, probably around Christmas, the biggest chocolate time of the year.
And it’s not like cocoa prices weren’t already at record high prices. Poor harvests, rising wages, higher shipping costs, increased demand, all have had significant impact on commodity pricing.
The prevailing wisdom is that there is a lot of competition, and rising prices will be absorbed between retailers and manufacturers. As both a retailer and a manufacturer, my capacity to absorb may have hit its saturation point. However, I’m on the verge of implementing a new strategy to combat these wicked market forces.
I’m going to corner the market in customers. I know it’s an aggressive strategy. If I’m successful, you’ll read about in Bloomberg News. And if not, well, you can’t have everything, because where would you put it?
Mink Chocolates Inc.,
Mink A Chocolate Cafe Ltd.
Call the store: 604.633.2451
Call my mobile: 604.376.3464
Call toll free: 1.866.283.5181
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In Person: 863 Hastings Street West, Vancouver, BC V6C 3N9
Nine out of every ten persons say they love chocolate. The tenth lies.
– Anthelme Brillat-Savarin