I can't resist continuing the thread discussing honey cost and pricing.

For many years, and it seems like another life, I worked as chief financial
officer for a couple of pretty good size companies (which many of you would
know) and have spent a great deal of time concerning the relationships
between product costs and selling price.

I consider it pretty firmly established that product costs usually have
little to no relationship to selling prices.  While one must know product
costs, the primary or sole benefit of knowing such costs to determine
whether you are making or losing money.  Except for a very few special
circumstances, selling prices are established by market factors, rather than
by reference to costs.  I will provide a few examples:

- Cosmetics.  An ounce of any cosmetic costs just pennies.  Consider the
prices of all the various mascara's, lipstick, creams, etc.  the
manufacturers are charging "what the market will bear".
- Cereals.  Manufactured from commodities, with widely varying prices, the
manufacturing cost is pennies a pound and, until relatively recently, the
consumers paid $4.00 and north a pound.
- Wholesale paper products such as newsprint, fine, and corrugated.  Over
time, the selling prices average a small markup (10%-15%) over the cost of
the single most efficient producer.  Most paper is sold for less than cost
as otherwise mills would have to close and the owners would have to absorb
the huge overhead costs.  Overhead costs in the manufacture of paper
typically account for 2X-3X the cost of pulp, chemicals, and labor.
- Commodities such as coffee, metals, oil, wheat, etc.  Studies at Harvard
Business School have documented that over time commodity prices will
gradually become equal to the lowest prices of production.  (BTW, this is
exactly the difficulty we are having with bulk honey prices.)

So...cost of production (I maintain) does not determine selling prices.  How
does one set prices for honey?  Assuming one is a hobbyist or a sideliner,
the most important thing is to not pay very much attention to what others
are selling honey for.  Especially the bulk sellers.  Look for the niche
markets that are not large enough to attract the bulk sellers.  Consumers
who want local honey represent one of those niche markets.  Another is
represented by those who want varietal honeys.  Set selling prices that are
"fair" (not outrageous) but represent premiums over those sold as coming
from "China, Argentina, or the United States".  Sell what you can at those
prices, and hopefully it will be all you have.  Compare with your costs, and
if the difference is satisfactory you have a good deal!

Lloyd