>My honey sells at $5/lb.

Does a gallon then sell for $60  $5 X 12 lb.?

Small amounts can always bring a premium price. For retail sales the 1 lb.
jar is usually the size with the most profit margin. Pricing of a higher
price on your smallest size increases the profit margin on your honey and
can actually help move more product by making the regular customers buy a
larger size to save money.

The downside is the customers which cruise by your sales area and simple say
"your prices are too high "  and walk on. They do not stop to inquire WHY
your product is higher because of the methods you use. They do not stop to
read the label. The price has scared the buyer off.

To be sustainable (which is not what most hobbies are) you need to figure
your costs of production and then add a reasonable profit.

 Many small businesses fail simply because they sell their product at the
rate the same product sells for in the grocery stores. IT IS TRUE that
consumers determine the general price of honey by the prices they see every
week in the grocery stores.

Grocery stores do help the small beekeeper by not putting the price on the
honey but on the shelf. They use the method to save labor on changing prices
on the product on the shelf if a price change comes along. The reason I say
it helps the little beekeeper is people make a choice on price while
standing at the honey display in the grocery store based on the other honey
for sale. If the jar is not marked with a price they do not look at the
price they paid for honey every morning over cereal so the price becomes
committed to memory.

You can for sure command a higher price for your honey when you are doing
direct retail sales to the customer. Also at places people expect things to
be higher like events.

 In stores the situation changes for the reason I said above. A limit exists
to the amount of higher you can go on price *and maintain shelf space*. What
I mean is in large supermarkets they expect a certain level of sales from
each square foot of shelf space. Once your sales falls below a certain level
you lose shelf space. The reason why if you look at the honey sales shelf in
a Wal Mart supercenter each month all year you see changes in honey. What
happened they used to carry so & so's honey in 5 lb. jugs but don't now.
What happened to the one pound local honey?
Most small rural grocery stores will keep shelf space for the local producer
regardless of sales or profit.

The lesson to be learned from the stores is simple. Sales of honey in the
U.S. is not growing. When I was  a kid whole sections of sales area was
devoted to honey.  Not today! The big problem with foreign honey is not only
the lower  price but the fact the honey has a different flavor than honey
buyers are used to tasting. In the Midwest we have got a wonderful tasting
Clover honey. Buyers expect all light honey to taste the same as what they
are used to. They refuse to eat the honey from floral sources they are not
used to because it in their opinion tastes funny. Something must be wrong
with it they say. Then it sits for months and crystallizes. Then each week
while in the grocery store and the kids grab a jar of honey and try to put
in the shopping cart Mom. Says "no" we have got honey at home!

My two cents worth!

Bob

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