# I might as well give it away..



## Eman (Apr 14, 2002)

I've not had much success selling honey even with local advertisements. Our grocery store has a display set up from an area beekeeper and they are retailing his honey for $3.99 for a pt. jar about 22oz. That wasn't bad enough but the other chain grocery store now has another beekeepers honey in the pt. jars and is retailing them for $2.99.
I would say my best bet is trying farmers markets in other areas.


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## tecumseh (Apr 26, 2005)

how much honey (total) do you have to sell?

here in central texas we have any number of VERY LARGE area beekeepers. their product, which is displayed in any number of retail establishment, is undistinguishable from any other brand on the same retailer's shelf.

I have also never had any success with advertising. currently I have a very limited quantity of honey to sell, but I have found direct sales (a farmer's market is a good start) to not only sale a jar here and there (it is fairly time involved), but also to discover price (what are other folks with a similar producting getting) and to generate information (age, income and most important preferences) about the people that consume your product. I have the impression that lots of folks that use honey would like to id a beekeeper's face with the product they buy.

good luck...


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## suttonbeeman (Aug 22, 2003)

I dont know where you are in E Tennessee but your competitor has NEVER figured out what it cost him to produce honey. If the store is selling for 2.99 he is probably getting about 2.00 a jar. If you take approx 1.5 lbs and subtract the cost of the jar(.50) he is getting about a $1 a pound for the honey LESS his label, cost of bottling and delivering. I figure it cost about .75 to produce honey IF you are very efficient and large scale more if small scale. So at best he is makeing about .35 a jar to produce it, strain it, bottle it and deliver. He as his head somewhere the sun doesnt shine. He cant be making much $$$. He will probably be selling out in the future! It should be retainling for about $5-6 Good Luck


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## sqkcrk (Dec 10, 2005)

"your competitor has never figured out what it cost him to produce honey."

Would it surprise you to know that neither has GM or FORD. Well, cars in their case, not honey. But that is what I have been told lately. So I don't feel to bad about not being able to figure my cost of production per pound since I'm in such good company.

Do you know what it cost you to produce a pound of honey? Really?

I'd like to know.

Mark


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## nursebee (Sep 29, 2003)

I'll be able to tell in another month or so. Kept books this year. Take amount spent on bees and divide that by the number of pounds of honey. Not that hard to do.

If you produce grocery store honey you need to sell it at their price. If you make a unique product then it has more value. So create that value somehow.


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## Eman (Apr 14, 2002)

I'm quite sure they know if they are making money or not as both have been doing business a long time and seem to be very big. 
I do this for a hobby and have a job so the time sitting at the farmers market isn't time I really have to spare.

http://www.giftbasketsuppliers.com/suppliers/419-399-5786.html

This is one company supplying honey to chain grocers in pt. Golden Harvest jars retailing at $2.99.

[ January 09, 2006, 12:12 PM: Message edited by: Eman ]


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## George Fergusson (May 19, 2005)

Ooooh boy, a topic I could have started










I've said for a while now that I'd rather give my honey away than sell it at supermarket prices, or worse, at the prevailing wholesale price of honey. The reason is simple: If you can't sell it and recoup your cost of production, you really can't afford to produce it. Enjoy your bees. Eat your honey.

The situation with migratory beekeepers is a bit different, not that it ought to be. Honey isn't their primary source of income, so they look at honey sales simply as a way to defray their operating expenses. They routinely sell their honey for less than it costs them to produce it, generally because they sell it bulk in 55 gallon drums to get rid of it. It makes it tough on the beekeepers that don't pollinate for a living but instead rely on honey sales for their sole source of profit.

Migratory beekeepers are probably painfully aware of their honey production costs.

It's easy enough, as Joe points out, to keep track of your expenses and the amount of honey you produce and figure your cost of producing a pound of honey. More people should do this, it would be a real eye opener!

My 2005 cost of production per pound of extracted honey was $120 per pound, give or take a few dollars. That figure of course does not include my time. Just my expenses. And no, I didn't make much honey last season.

Woof. Sure hope things improve in 2006









By all rights and purposes, you should probably be depreciating your equipment when figuring your production cost so you can get more realistic, comparable figures from year to year, even if you expensed it in a single year for tax purposes. Say you buy 100 deep bodies one year. Hurts your production cost a lot, but the next year, your bottom line looks Much Better







Wouldn't it be better to spread that hive investment out over 7 years when figuring your cost of production?

Now I remember that I produced 50 pounds of honey that I did NOT include in my production- it's sitting, unextracted, in the freezer, to be fed back to the bees next spring. I produced this honey, it has value and cost, and I'm reinvesting it in the business. Gee, if I include it in my production figures, my cost per pound of honey drops from $120 down to only $60 per pound!

And wait a minute! What about my time? I won't even guess at how much time I spent producing my 2005 honey crop... should I? If I'd applied myself to say, picking up returnable cans and bottle beside the road, I'd have made X dollars. Did I do that well making honey? Should that factor into my cost of production? What did my time "cost"? What's it worth? Should I be collecting returnables for a living next year, or making honey?

Well, maybe figuring your cost of production isn't quite as simple as Joe would suggest... but as a starting point, it's a good uh.. starting point.

George-


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## MichaelW (Jun 1, 2005)

Eman, where are you at in E TN, I'm in Anderson County. I too have noticed lots of local honey in stores and fruit stands. We have lots of hobby beekeepers, like myself. I haven't been able to make enough honey to sell yet so I haven't looked at the markets too closely yet, but have noticed lots of competition but the prices are usually more than what you saw as far as I can tell. I usually try and buy food at local fruit stands though and thats were I have been checking honey prices, I'll need to check some grocers. I wonder if the honey you saw was from a hobbiest in it for fun and dosen't mind not making what he should. Thats unfortunate for everyone else. What was the brand? I like keeping bees too but I want to get paid for working for more honey than my family can eat.

My "plan" to sell honey is to eventually be producing organic honey. I've noticed the health food/organic stores generally sell local honey, but I have never seen organic, local honey. They usually carry products that are either organic, local, or have some other unique more sustainable than walmart qualities. I can't recall seeing any organic honey at these stores, so I believe they would pick up honey that is both organic and local immediately if avaliable at a decent price. think about it
Oh, now I've given up my secret plan to a local.









If all else fails and you haven't bottled some honey yet, shady grove meadery over our way
http://www.shadygrovemead.com/
has to buy a certain large percentage of local honey a year to make their mead and he said he is always looking for some. The price was by the 5 gallon bucket, not extremely motivating, but better than what most people get by selling in bulk. I may sell some honey to them if I get some extra this year but not enough to make it worth my while to develop a market for it. I won't be organic for some time as this was my first year without Apistan. Lots of new wax to build.


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## tecumseh (Apr 26, 2005)

george ferguson ask:
Wouldn't it be better to spread that hive investment out over 7 years when figuring your cost of production?

tecumseh replies:
exactly. just like you would a truck or trailer designated to the bee operation. it would give you a much inflated figure in terms of cost to 'cash' expenses large ticket items who's use extends over several years.

in addition, the equation of cost/# is extremely sensitive to volume and a host of other personal consideration. if you are expanding, as several folks on this site seem to be doing, you are trading current volume for future volume and you are also adding cost on to the current time period. that kind of number ain't going to tell you much.

to my way of thinking it is better to think more about 1) $ capital investment /hive and 2) $ maintaince /yr/hive (the time period is a preference thing). as an example, if I allocate $50/yr/ hive to maintaince my hives and I could generate 50# of product/hive then my cost per pound would be $1. 

go to the national honey board and there is plenty of information about retail and wholesale price, and all the journals use to list both prices by region. many of the state ag schools should have numbers for cost of production and will often be called' cost of production budgets' (matter of fact one of tecumseh old retired professors made up the one for texas). my guess is golden harvest is either a blended honey or and import or both. seems like not that long ago when I was checking web space that there was some common floral source organic honey (west coast) for about $2+ a pound (what shipping would be incured should be determined by distance) in 60 pound pales.


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## sqkcrk (Dec 10, 2005)

Joe Miller, It may seem that simple, but believe me it isn't. I sold over 18,000 lbs of honey in jars and 5 gallon containers, last year. It's hard for me to tell, right now, how much honey I produced.

You have your cost of producing your crop. Where do you start accounting? With the first bee book that you bought or the first hive? And do you take all of the cost of the hive the first year or do you depreciate it over 5 years.

Then you have the cost of getting the crop off of your hive and getting it extracted. What does that cost you? Do you do it yourself or do you pay someone to do it for you? I pay for extracting, it costs me .15/lb. That's the extracting, not counting the transporting the supers and then going to get them and then going to get the honey.

And I'm just getting started. So, you might just be begining to start seeing how hard it is for me, with 600 or 800 colonies, to be able to figure out how much it costs me to produce a lb of honey. I don't have the time to write it all down.

mwb


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## sqkcrk (Dec 10, 2005)

I know quite a few commercial/migratory beekeepers. And I don't know a one who is selling their crop "just to get rid of it". Everyone of them is working the phones trying to find the closest buyer who is offering the best price and is willing to pay for it when it is delivered or net 30 upon pick up.

Over the mountains from George Furgesson is McClures' Maple and Honey Products, a subsidiary of Dutch Gold of Lancaster, PA. If you have enough honey to make it worthwhile they will send a semi to your door to pick up your honey. That would be about 70 barrels or so.

I really got a chuckle when George said that his honey cost him $120.00/ lb.

At the ESHPA winter meeting I was sitting at the dinner table with some other beekeepers and this topic came up. Nic Calderone thought that it must cost around .50/lb, because how could you sell it for an average of .60/lb and make any profit. An older beekeeper than I agreed with me that it probably costs somewhere between .75/lb and .95/lb. This was an experienced commercial beekeeper. 

Let's not try to figure how much profit we made. You'll want to go out and shoot yourself or at least your beehives.

When I first left home I worked for $100.00 per MONTH, room and board and use of the truck to go to town friday and saturday evenings, after milking, to play pool or go to the movies. I decided to figure out what I was getting per hour. What a mistake. I had been enjoying what I was doing. It took me a long time to forget about the money and get back to the joy.

So, personally I think that you should stop right now and decide if you are doing this beekeeping thing because you like it or because you want to make money. Cause if you want to make money and you are smart enough to use this here computerthingimijob you aught to be in another line of work. It's too late for me. After 20 years or more working or working around bees I'm not fit for anything else.

mwb


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## George Fergusson (May 19, 2005)

>I know quite a few commercial/migratory beekeepers. And I don't know a one who is selling their crop "just to get rid of it"

Poor choice of words perhaps as calling around for the best price just plain makes sense and nobody is calling beekeepers stupid. However, I maintain that if you're selling your honey in bulk, at wholesale prices then you're in effect "getting rid of it". If, like you Mark, you retail your honey, even in 60 pound pails, you're going to get more for it than you would selling it off wholesale by the barrel or truck load. Selling honey, which I've never done, is pretty much the same as selling lumber, which I have done a lot of. We sell it by grade, by the truck load, for the highest price we can get for it. We could go into the lumber business and try retailing it- sawing it up and selling boards, but that's a whole other business. We sell off firewood by the truckload. We could saw it to length, split it and sell delivered fitted firewood for a whole lot more money, but that too is another business. There are whole industries set up to process a commodity such as honey, or lumber. It's hard if not impossible for an end producer to also be the end retailer for their product.

Cash flow needs pretty much dictate the way beekeepers will sell their honey. It costs money and takes time to increase your profit margin by bottling, labeling, and retailing your honey. It makes sense but if you need cash NOW, you're going to sell it wholesale.


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## Eman (Apr 14, 2002)

Michael W,
I'm in Hawkins County. You'll have to define organic honey. Now if you mean chemical free or you didn't treat with chemicals I guess I understand but you probably used FGMO which is a chemical of sorts.


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## tecumseh (Apr 26, 2005)

george ferguson adds:
Cash flow needs pretty much dictate the way beekeepers will sell their honey. It costs money and takes time to increase your profit margin by bottling, labeling, and retailing your honey. It makes sense but if you need cash NOW, you're going to sell it wholesale.

tecumseh replies:
from a financial point of view a well defined cash flow analysis will actually tell you more about how a business is operating than any kind of profit and loss statement or any kind of balance sheet.

from a strict decision making/management point of view, you are only concerned with the variable cost that you still have control over (that is cost that are ahead of you in time). so if you are sitting on a bunch of 60# pales the cost of getting the honey into those pales is not really relevant any longer. the additional cost of getting this honey into some form-location that consumers will buy is the only cost that 'should' really concern you.


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## Aspera (Aug 1, 2005)

Tecumsuh speaks like a true economist. "In for a penny, in for a pound".


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## John F (Dec 9, 2005)

<Aspera>
Tecumsuh speaks like a true economist.

I would say more like an entrepreneur. [or a poker player]

The money you've already put in the pot has no bearing on the decision you need to make now. [ignoring pot odds.] Given what you have in your basket right now, how can you maximize your profit.

But to argue a bit for George:
<Tecumsuh>
from a strict decision making/management point of view, you are only concerned with the variable cost that you still have control over...

And your current cash flow needs. That is, it may be more profitable to sit on your 60# pail of honey and sell it tomorrow, but if Guido is holding an iron in the fire it might be best to forgo the seat and sell for less profit today.

But I do understand the point of past investment.

<and to perhaps tie this into one bundle>

Hmm. After a bit of reflection, I think Tecumsuh still says it best with the phrase I've snatched above. Unbranded skin is valuable to me and suspect I would not "pay it out" for the chance to sit.

JohnF


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## MichaelW (Jun 1, 2005)

Eman
The last draft of organic starndards for honey I read allows Formic Acid and Menthol as these are organic chemicals and break down in nature to harmless compounds. Seems Thymol and Succrocide should be no problem getting approved for organic honey for same reasons.

Organic standards must be realistic for the producer to work.

Info on producing organic honey is hard to come by. I had a link to the draft standards at one time, but they looked alittle old. I don't know if they were ever finally approved. I'll look through my bookmarks if your interested.

For the small producer, I believe, you can follows standards and label your honey as "produced by organic methods". You may need to convince the store that it really is organic if you are not carring the actual certification of a standards organization.

If you have crops nearby your beehives that are treated with pesticides you can't do organic honey. All wax in foundation and anywhere else must be organic. Plastic foundation is OK.

Lots of hoop jumping, but its possible, and looks worth it to me.


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## MichaelW (Jun 1, 2005)

oh, and I wouldn't be thinking about getting more into beekeeping if I didn't enjoy it. I would start NO business that I did not enjoy at this point. There are lots of things I enjoy doing and could make some money at, only if I had the time. When I've had time in the past to do things, like make lots of art, I did not think of it as a business and made no money at it. Now I am looking at hobbies I do that can also generate some money, so maybe one day, likely retirement the way things look as people talk about them here, I can only do things I enjoy and make a living at it.


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## tecumseh (Apr 26, 2005)

john f sezs:
And your current cash flow needs. That is, it may be more profitable to sit on your 60# pail of honey and sell it tomorrow, but if Guido is holding an iron in the fire it might be best to forgo the seat and sell for less profit today.

tecumseh replies:
very nicely said....


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## sqkcrk (Dec 10, 2005)

George, I understand what you are theorizing about. I hope that you know me well enough by now to know that I say to you what I do with the utmost respect for you as a human being who has shared with me things that you may or may not share with others.

That said, when you look at the guys who are, as you put it, "getting rid of their honey" and the homes, cars, and things that they have and them you look at me and what I have, I think you'll see a difference. Maybe not a big difference, but a difference.

They may not be getting as much per pound as I am. But they don't have the costs that I have. Ain't nobody getting rich here. Ain't nobody getting rich at beekeeping, period. There are just those people who are looking at that nice new Ford F-450 Super Duty Truck and thinking, "Boy, I wise that I could afford to drive one of those. Isn't he well off."

I can tell you this. My banker sure loves to "rent" me that truck at $650.00 per month. Anybody want a ride? Rides are $2.89/gallon.

tecumseh, Back at school we played around with a "point of diminishing returns" graph or formula? Is that what it's called? Boy, were we disappointed.

Can you get your panther to come by my place? My son and wife are tired of the rats. You'd swear that they (the rats) were moving furniture upstairs.

peas bro's, mwb


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## sqkcrk (Dec 10, 2005)

Thios topic reminds me of a story that I heard just recently from a restaurant owner.

He said:"If you want to make a small fortune. Here's what you do. You start off with a large fortune and you open a restaurant."

And then we all laughed. Then we cryed. No we didn't.

But I do think that maybe he borrowed this story from a millionare beekeeper, who said, "When I win the 1,000,000 dollar lottery, I'm going to keep bees until the money runs out."

Keep your bees, spend your money. If you have to worry about either of them then we are in the same boat, together.

mwb


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## nursebee (Sep 29, 2003)

mwb and others,
If I kept many bees and sold much honey, I sure would know how much I sold and at what price. No it is not easy and it requires some work. But the tax man somehow needs to know (both the accountant and the IRS/state folks). As a businessman I sure want to know because I am weighing things on a cost benefit scale all the time. As a beekeeper I want to know so I can judge my bees, the yards they are in, my management of them.

Where do I start accounting? EVERYTHING! If you do not have the time to write it all down you are losing money. If you do not record your mileage and fuel expenses it can count against you. If you do not record labor paid out you show a greater profit and liability.

It is that simple. Your choice.


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## tecumseh (Apr 26, 2005)

sqkcrk adds:
tecumseh, Back at school we played around with a "point of diminishing returns" graph or formula? Is that what it's called? Boy, were we disappointed.

tecumseh replies:
more correctly called the law of fixed porportions. but rhetorical flourish does sell books and likely honey on some occasions.


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## nursebee (Sep 29, 2003)

And from the NHB at this link
http://www.nhb.org/info-pub/reprtinst.html

"Honey producers who pack their own honey production have several reporting and assessment payment alternatives for reporting their own honey. These alternatives are based upon how many pounds of produced honey are packed by the producer each year.

Alternative 1: If you produce less than 6,000 pounds of honey a year you may be exempt from paying the assessment on that portion that you pack for local sale to farmers markets, grocery stores, food manufacturers or the like."

So it seems that if you produce more than 6k# you are required to pay the NHB based upon pounds of production. So one does need to keep track.


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## peggjam (Mar 4, 2005)

All farmers have the same problem. We buy retail and sell wholesale. The money is in the retail market, but it is awlful hard to compete with locals who are willing to sell for less than cost of production. If you truely want to make money at beekeeping you need to deversify. Do with your bees everything that can make you money. Pollination, queen rearing, honey, wax, ploplairs(sp), ect. Even if it is only on a small scale. Every penny counts, and when you want to make a profit, diversity makes the difference.


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## George Fergusson (May 19, 2005)

>it is awlful hard to compete with locals who are willing to sell for less than cost of production.

The good news is these people usually don't stay in production that long, if that's all they're selling. Or, they may make enough money on other products that they don't notice they're losing money on one line. Then there is the concept of a "loss leader" where a product is intentionally sold for less than it's cost of production (or purchase) simply to get people in the door to buy other stuff. An example is the small mom-n-pop store that sells gasoline at if not a loss, then a $0 profit just to get people in the door so they can sell them a bottle of milk.

Not making money ought to be against the law


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## peggjam (Mar 4, 2005)

Yer right George. My compitors are Amish though, they operate by a whole different set of rules. LOL.


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## MichaelW (Jun 1, 2005)

being Amish..

Talk about marketing power.


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## sqkcrk (Dec 10, 2005)

Nursebee, I record the mileage of my three trucks New Years Eve or New years Day, each year and do the math to see how many miles I drove them. I understood that you could either claim actual fuel receipts or a set number of cents per mile, set by the GAO. If I have been operating under false or incorrect information, would you tell me, please?


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## peggjam (Mar 4, 2005)

"I understood that you could either claim actual fuel receipts "

This is how I have done it for years, and you can also claim a fuel tax credit on your federal taxes by using form 4163, assuming of course that you are filing for agirculture.

"a set number of cents per mile, set by the GAO."

This way I think you do with 4562, I'm not as sure about it, as I don't do this one, so might want to check. This would also go on your Profit or Loss from Farming Form in part II, line 12.


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## sqkcrk (Dec 10, 2005)

Nursebee, I keep track of my sales of honey in my receipt books. At the beginning of the next year (such as now) I total up my receipt books and I do a chart and graph of the pounds sold and the number of cases of each of the different containers. So, then I will have an idea of what I might need to purchase in the way of jars, lids, and labels. I know the income from sales of honey, the containers used and their lids and labels and I know the total of pounds sold.

So, not to be rude and please try to believe me cause I mean no disrespect to you personally or otherwise. The statment that I made awhile ago about the big auto manufacturers not knowing how much it cost them to make a car? Someone replyed that they would bet that GM and FORD know how much their annual Profit and Loss is. Now, I may be dense, but isn't it possible that a company can come up ith a P&L statement and still not difinitively know what it cost to produce an individual item? Please help me understand what I must not be understanding?


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## sqkcrk (Dec 10, 2005)

peggjam, Did you make a profit last year? Much of one?


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## peggjam (Mar 4, 2005)

Not on honey, we sold off the last of our replacement dairy heifers, and only made anything because we didn't try to replace them. They were selling upwards of $700 bucks for day old calves, lose any at that price, and it don't take long to go broke. I was pushing for expandsion on the bees, so I took very little honey. I will make some honey this year, but will also increase the #'s a bunch. So depending on how we come out of winter, each year should be alittle bit better.


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## sqkcrk (Dec 10, 2005)

You can price yourself out of the market, too.
I know a guy who sells his honey in stores all over the county. There's another guy who sells his honey at his road side stand and a store and an Amish roadside stand. The Amish guy called the first guy to check his price of honey. It was less expensive. So the Amish guy told the guy that he was alreadt buying from to lower his price or come get his honey. He went and picked up his honey. Because he'd be ****ed if he was going to lower his price.

So which one of these two honey producers and packers and sellers will be in business 5 or 10 years from today.

Stay tuned for further developments.


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## sqkcrk (Dec 10, 2005)

peggjam, got anymore than 20 hives now?


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## sqkcrk (Dec 10, 2005)

or is that too personal?


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## peggjam (Mar 4, 2005)

Sorry, I was looking up buckwheat varities. Yes, we have 25, if they make it through the winter. I have alot of nucs in there, that might or might not make it, you know how that goes. Would like to get to around 200+/-.


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## sqkcrk (Dec 10, 2005)

How many do you think it will take so that they will support you? Just bees or what?

How many if you only kept bes?


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## peggjam (Mar 4, 2005)

Depends on wether you only make honey, or you do pollination, queens, nucs, honey,ect. To be dead honest with you, I don't know what the majic number is. If you get much above 400-800 swarms then you have to factor in help, wether it is family or hired, it all has to be factored in. I just don't see me getting that big. Plus, one bad winter and your wiped out. To be realstic, 200 is proably bigger than I will ever get, but dream big right...........


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## nursebee (Sep 29, 2003)

squirk,
Despite your saying it is difficult to figure what a pound of honey costs it sounds like you know your figures pretty well.


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## sqkcrk (Dec 10, 2005)

"but dream big right..."
Dreams are what life is made of. Been dreaming of a honeyhouse and packing plant for 8 years now, since the fire. Just can't seem to get th capitol together to get started.

I'm more in the same boat with you than you might think. I'd be willing to bet, that if we had met under different circumstances, that we would be quite civil to each other and find quite a bit of common ground and some, but not alot ,of uncommon ground.>  )()())) now if i could only give it wings.

nursebee, figures I have a pretty good handle on. It's what they mean and whether there is a profit to be had and when is it coming.

My dear friend reminds me every now and then that things will get more profitable when the kids are out of the house. Well, I'm 53 and the youngest is 10. So, I'll be 61 or more before what he says will start to happen? I know he sounds sinical. But he is a realist, in my opinion. I hope that he is wrong. But as time goes by he may be right by default and I won't know if he could have been wrong. Oh, well.

(An aside:I went to look up sinical, because it didn't look right, the way that I spelled it.. What I found was the word "Sinicism", defined as "Chinese methods or customs; a Chinese usage." and that is it. I gotta get a newer dictionary. Suppose the word Sinicism isn't PC anymore?)


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## George Fergusson (May 19, 2005)

. . o O ( cynicism )


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## sqkcrk (Dec 10, 2005)

tanks jorje


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## peggjam (Mar 4, 2005)

I truthfully wouldn't know what to do with all the honey that many hives would produce. It's hard to reinvent the wheel when someone undercuts your price 24/7. I'm leaning toward pollination, and maybe some queenrearing, but one never knows.


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## sqkcrk (Dec 10, 2005)

peggjam, Don't be discouraged. Put your honey in good clean brand new jars from Wixsons or somewhere with a nice label on them. Go to your local P&C or whatever big grocery store and get the produce manager to look at your honey. Do some research before you go to see him, though. Go check out the price that the honey by the peanut butter sells for. Set your price so that when the Produce Manager mark's it up 45% it will cost the customer a little more than the stuff by the peanut butter. Tell the Produce Manager that he can't loose because if it doesn't sell fast enough you'll buy back what is left at the same price that he bought it for. You will be pleased. I'll be surprised if you are not. Start off with 2 lb jars and 1 lb jars. It will take a while, maybe a couple of months, before it sells. But if you keep it infront of the public, before you know it you'll have a reputation. You'll meet people that you never met before who will say to you, "So your so and so honey? I love that honey. It's the best honey I ever tasted." I'm talking from experience. I had a woman from Flushings, Queens who called me to see if I would ship her two 5 lb jars UPS. She made my day. You bet I'm going to do that for her. Now Joel, she called me and she isn't likely to go to the Green Markets anyway. Isn't that where you go? I'm assumimg? So make sure your phone number is on the label.

Gotta go to bed. 'nite, Mark


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## sqkcrk (Dec 10, 2005)

Let's talk marketing for a little while .

First of all, you are not selling honey. As a wholesaler of honey, you are not selling honey.

You are providing a service to the stores that you want to sell honey to.

What sets your honey apart from my honey, the Amish guys honey, George Winston Armstrong's honey or Carol O'brien Magilicutty's honey ,is you.

What can you do for the store that you want your honey sold in?

You can provide a quality product,locally produced, with good regular service to the store, so their shelves aren't empty ,at a fair price to you, that the store is willing to pay. 

High quality product, high quality service and a not so high a price for the product, that the store won't talk to you. You have to get in the door. You have to get on the shelf.

What are you willing to do to get there? You want to move your product? Or hope someone finds you. That won't work.

You have to have a mind set that lets you realize that you aren't selling honey. You are providing the store the opportunity to buy your honey. There's a difference. You can't expect the store to buy your honey. You have to be thick skinned enough to be willing to be turned down. And keep on going.

The points of negotiation are Quality, Price and Service. Each one of these costs you money and you can't be all things to all people. A high quality jar(It's the packaging that "sells" the honey to the consumer) label and lid, a low price and good service, will get you in the door.

But your price can't be so low that you can't afford to stay in business as a sales person.

You aren't a beekeeper any more. You are a sales person who also has a job producing, packaging and distributing honey at a fair price to you with good service to the customer( the store) and a quality package that gets the attention of the Store's customer, the end consumer.

Once you are in the door, periodically you raise the price a little bit. But you will never really know how much you can get for your honey until you get the price to high. Also keep in mind that if everyone is happy then you are not selling at a high enough price. You can't be the honey seller to all people.

So, go out and get turned down a few times. You'll find someone to buy your honey. And after you have been there for a while, take your receipt book to the store down the road or in the next town. Tell the Produce Manager about your business of providing local honey to local stores. Show the produce manager your receipt book and tell her how often you have to go to the store down the road. You'll be surprised.

Mark Berninghausen


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## Joel (Mar 3, 2005)

{I understood that you could either claim actual fuel receipts or a set number of cents per mile}

Here's some more of that book knowledge and research. You can deal with vehicles 1 of 2 ways for tax purposes

Total Cost of operation/depreciation or
Milage

Fuel receipts are part of total cost but not saved for milage. If you start out doing total cost you can't later switch to milage.

I know, a wealth of useless information!


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## sqkcrk (Dec 10, 2005)

Total Cost. That doesn't include repairs and maintenence, does it? D'OH!! Have I been doing bad?


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## sqkcrk (Dec 10, 2005)

D'OH!!! NOTE TO SELF: SELF, READ TWICE RESPOND ONCE, SLOWLY, READ WHAT YOU WROTE, EDIT OR DELETE. GO BACK TO BED.

Sorry Joel. I usually tell people that there are no stupid questions. I still believe that. But sloppy reading and not thinking come pretty close.

So, let's see if I understand what I think I understand you to say. Are you saying that, an individual, with vehicle expenses, can't deduct the miles driven times the OMB rate for that year and repair and maintenence costs and depreciation? Is that what I am hearing?

Thanks for a straight answer.

Mark

mwb


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## tecumseh (Apr 26, 2005)

sqkcrk ask:
Someone replyed that they would bet that GM and FORD know how much their annual Profit and Loss is. Now, I may be dense, but isn't it possible that a company can come up ith a P&L statement and still not difinitively know what it cost to produce an individual item? Please help me understand what I must not be understanding? 

tecumseh replies:
well years ago tecumseh was employed by the second largest manufacturer (I will attempt to promote no product outside of my small dwindling supply of honey) in the world. Cost (cost accounting) typically includes those things tangible (labor, steel) and those things intangible (contingency cost and future liabilities). So as you have so properly surmised profit and loss statements are pretty much poured in concrete. A balance sheet which may include depreciating items and goodwill are a little less set in stone. Finally, as to cost per unit produced you find yourself on extemely soft ground because of the extent and unpredictable nature of contingencies and liability cost (I think the health care cost of GM former workers is a great example of these types of cost).

and thanks for the marketing shortcourse... this is a long term psychological problem in modern day american agriculture. agricultural producer have always perceived themselves as producer and not marketers of the goods they produce. typically the american agriculture producer does and excellent job of technically converting input into output, but have always short changed their own marketing effort. in the current economic environment those agriculture firms that do not remedey this type of behavior will not be competing with anyone very long. that's my story and I'm stickin' to it....


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## sqkcrk (Dec 10, 2005)

tecumseh,

so do you think that i or any other beekeeper can actually say with in reason what it costs me or you to produce 1 lb. of honey or each of say 40,000 lbs. of honey?

i'm not really worried about it. but the topic seems to be that that's what people here want to know.

i can look at my own p&l from farming and see if i've made a profit. it doesn't REALLY make a difference to me if i know what the actual ral cost of making 1 lb of honey is.

i think that my cost of production is between .75 and .95/lb. that's just a huntch. and if i don't sell as much honey as i can at a price above $1.00, and probably really above $1.50, in the long run, ain't no one getting rich.

not that that is my goal. to be rich. i'd just like to be comfortabely poor.

mwb


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## sqkcrk (Dec 10, 2005)

A good friend of mine who has been in the beekeeping business for about 50 years, mostly in NYS but also in SC, used to and still does say that you can't make it as a beekeeper if you try to bottle and sell your own honey.

I both agree and disagree with him. And in my case, I hope someday that he sees me as successful. I've already stuck around as a beekeeper longer than he once thought. Another story.

I agree with him, if you don't promote, promote, promote. The three most important things to do to market your honey.

1.Promote yourself. You are really all that you have to offer anyone. Take pride in yourself and what you do well and are good at.
2. Promote your image. Perception is reality. If your honey package looks enough like everyone elses, if you don't have enough pride to dress it up or if you don't have an idea who your customer's customer is, you can't project the kind of image that you should. What kind of image should you project? The specifics are personally yours. How could I advise with out knowing you.
3. Promote your end product, your honey. Or someone elses honey, that you have purchased to keep your space on the shelf. If you don't have enough honey, let's say you misjudged your sales, it happens, what are going to do. Leave the space empty, because you don't have any more of the honey that came out of your hives? 

Do you know how long Sioux Bee Inc., the U.S.'s biggest honey cooperative, would be in business if it ONLY SOLD it's own honey? Not long enough. 

Their honey cooperative members can't produce enough honey to fill the demand that Soiux Bee has found, developed, whatever you want to call it. So, they buy honey just like any other honey packer does. And, yes it is probably mostly forgein produced. They put their label on it. It is good enough for their quality control personell to approve of. 
(Have you ever watched the game show Jeopardy and seen the Soiux Bee tag line at the end of the program?)

My point is that you can't afford to leave space that could be filled up by someone elses honey. You should buy someone elses honey and put it there yourself, before someone else does.

If any of this sounds like it makes you want to stay out of the honey selling business, then I suggest that you do so. Obviously there are enough people to fill the need, as far as most stores know. 

If you are going to be a honey seller, you have to show someone that they have a need that they weren't concious of.

GET OUT THERE AND PROMOTE YOURSELF, YOUR IMAGE AND YOUR END PRODUCT, HONEY.

Thanks for reading,
Mark Berninghausen


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## Joel (Mar 3, 2005)

Total cost method usually breaks down to just that total cost;

Cost of Vehicle written off under depreciation over the life of the vehicle (as set by IRS)
All repairs and maintenence
All operating costs such as fuel, tires, parts, repair, labor, insurance costs etc.

Milage Method -vehicle purchase price, all other operating expenses are incorporated into the milage figure which the IRS so kindly figures for us. It works out quite well actually. You figure total milage used and IRS stes the rate (I think 47.5 cents/mi. for 2005) That amount is to cover total costs. In my example I drive about 600 business miles a week and claim about $250/ week per milage. My fuel costs are about $140-150/wk leaving me about $100 to cover insurance, maintenece, repairs and such.

Total costs is usually beneficial for a new vehicle or if you don't drive alot of miles as the depretion value of a new or high cost vehicle would not be recouped in milage.

Either way you need to keep detailed records.

If you drive old beaters like me that you buy for a few thousand dollars and drive 600 miles a week or if you use a vehilce for personal and private use the milage method works out well and covers all your repair expenses, maintenece and such.


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## Joel (Mar 3, 2005)

OOPS!

[ January 14, 2006, 10:48 AM: Message edited by: Joel ]


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## Joel (Mar 3, 2005)

Here's my take on marketing:

#1 Decide what your goals are. Don't ruin a fun hobby that you gain great relaxation and comfort from by making it a business. Set the level you want and work within or towards the goals you set. My Dad always taught me to plan your work and work your plan. If you want it to be a hobby don't turn it into work. Enjoy your craft and sell what you enjoy selling and eat or give away the rest. There's more to life than money. 

#2 If you decide to make it a business don't concentrate on making money, concentrate on building your business. Become an expert in the craft you enjoy, take some time to see what others are doing successfully and copy that success. Build slowly and gain confidence from each level.

#3 Diversify and maximize production. Operatiion of bees for pollination is contrary to the management for maximum hive products. We make more honey off hives with pollen traps and we gain $20-$30/week in increased profits. Propolis traps add additional income. Sell some nucs, raise some queens, don't put all your eggs in one basket. A bad honey year may be overcome by the yard of bees you have dedicated to pollination or nucs.

#4 really more of #3. Value added products are your best profit increase tool. When a customer buys a jar creamed honey, a squeeze bear and a candle you've maximized that sale.

#5 Know thy product inside and out and be ready to make those points.

6)Packaging is vital to success. Not fancy packaging, intelligent packaging. If you walk into a grocery store you will see products packed in certain colors. That packaging you see is not just a random choice. The most successful packaging combination in history is the Marlboro cigerette package. it's all about the colors and their pshchological message. We had a marketing psychologist look at our operation and in 1 week doubled our sales in our Farm Market Venue by instituting the suggestions. The shapes, color (both background and lettering) and pictures, order of information on your label (ego, message, product descrition, contact info etc) can make a huge difference. The order and layout of your sales table at market and knowing when to stop selling your product are skills that are easily attained and will make an incredible increase in your sales for such simple but pschological ingrained shopping behaviors. Even what you do when no customers are at your stand has a significant impact.

5) Look at and particpate in many different sales venues in your area. Wholesale to local farm markets, retail at your local farm market, impulse internet buying, the local food cooperative, friends and neighbors, outher outdoor markets, community events, resturaunts, bakeries. Successful marketing is about finding your "Niche". Investigate your outlets. Don't bother putting your liquid honey on a supermarket shelf if there are 5 other liquid honey's on the shelf and you see jars in the early stage of crystalization. Sell them your value added creamed honey.

Well, that's some of it, there really is much more. It sounds complicated but it really is not. It is why Proctor and Gamble, Johnson and Johnson, Exxon and all the big guys are successful. They employ the science of marketing to a top quality product, customer friendly package. The result is success.

[ January 14, 2006, 10:45 AM: Message edited by: Joel ]


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## sqkcrk (Dec 10, 2005)

What Joel says. Right on.

If you don't enjoy sellimg then remain a beekeeper and leave he selling to the guy who buys your honey in the barrel.

I hear so many people at bee meetings gripe about not getting a good price for their honey. My opinion, if you don't like what you get then quit. Otherwise hush about what you get for your honey. That's not why you have bees anyway. You have bes because you enjoy them. And if you expect more, then you will have to do more. More of the things that you don't enjoy. It's almost circular.


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## sqkcrk (Dec 10, 2005)

Eman starts this thread noting that two differnt stores in his area are selling the same size jar of honey, from local producers at $3.99 and the other at $2.99.

Yes, perhaps you should sell your honey at the local farmers market. Unless that market is open to you once a week, all year round, I don't see how you can move as much product as the stuff in the stores. 

How much honey do you have, on hand right now, that you could sell? No, I don't want to buy it. I want to get a picture of what you could be able to do if you got your honey on the shelf. There's no reason to go to the store to sell your honey, unless you have enough to last until just after you extract next season. See where I'm goin'?

What is the mark-up at each of those stores?
Where is the honey, that you talked about, displayed?

The grocery shelves has a different mark-up than the produce section. And they each have different or various levels of mark-up, also. Go and ask them stores about their mark-up. Talk to the manager of the part of the store where you want your honey displayed. Then talk to the other one. Each has it's advantages and disadvantages. 

Explore your options. Make it an adventure, in which you are exploring the dark underbelly of the grocery marketing world, to discover how it works.

Enjoy, Mark


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## Joel (Mar 3, 2005)

I've heard some claim on this post, one even in Marks and my region, claim to be selling his honey for $7/lb. I've been in absolutely every venue in the region to find my niche. Don't get excited about these incredible claims. A few may sell a limited amount yearly (and I say may)but I think you'll find the stores have a pretty good sense of price pressures. We don't mark our honey way up. Part of selling to me is making my product affordable to the common man (like me). I think working slobs like us deserve the chance to have our families enjoy something that is better for them and tastes great too. It has been a good basis for us. The fact is the it doesn't matter what the cost of your production is the value is set by the market. If you provide a better product in the right venue you can get a better price. Folks will pay a little more for quality in my experiance. Don't out price the common man!


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## tecumseh (Apr 26, 2005)

sqkcrk sezs:
not that that is my goal. to be rich. i'd just like to be comfortabely poor.

tecumseh replies:
right on brother... could not have said it any better myself

as to your cost per pound question...
I would say my economic training/business experience suggest that producers develope a pretty good idea of their cost structure based on a level of production. not so unlike you described. this loose analysis is useful in that it defined a point at which selling the honey is costing you money. 

if you expand slowly, the cost at any level of production are 'understood' because they are experienced over time. what is not 'understood' is the cost/unit at the next level of production. it is very easy (at least in my experience) to vastly underestimate (or overestimate) the nature of cost at the next level of production.

finally I would say that Joel comments on marketing is just dripping with wisdom's sweetness....


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## sqkcrk (Dec 10, 2005)

Yesterday I was in Canton, NY before our meeting of North Country Grown Cooperative, Inc. So, I went for a walk around town. 

I don't remember what the name of the store. But it was not the kind of place where I would shop. Quite upscale. On the shelf was some maple syrup, jams and jellys,in jars. Fancy labels, too. I wasn't thinking about what I should have been. I'm going back to do some research.

Why should the well to do have to suffer, because they can't find my honey? Why shouldn't I get $4.25 for a one pound jar of honey, wholesale?


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## tecumseh (Apr 26, 2005)

sqkcrk adds:
Why should the well to do have to suffer, because they can't find my honey? Why shouldn't I get $4.25 for a one pound jar of honey, wholesale?

tecumseh replies:
my focus here is there are not enough well healed folks to support any significant honey sales. on the other hand we have a large number of folks from just across the river (you know what I mean) who eat the sweet stuff with much gusto. now I do enjoy it when a well worn and fairly brown hand gives me a few bucks for a jar of my miel, but I also acquire some larger benefit when one of these same folks comes back a week later and tell me in very broken english how much they enjoyed my girls production.

so to answer your question sqkcrk... it is all a matter of market width and niche. if you have enough well healed folks to support your enterprise then you could likely get $4.25/ pound of product. this then would create another problem in that such a price would attract others interested in cashing in on this niche. so before long you would have three competitors rather than one. this does represent a good presentation of the classical economic mindset.... every question usually envolves a two edge sword (always be aware of the back side edge of the blade).


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## sqkcrk (Dec 10, 2005)

tecumseh, I'll bet those folks from "across the river" relish your miel, con muco gusto, because you have a good product, that they can afford to have on their table. Keep on doin' what you are doin'.

I consider myself, mostly anyway, to be of the common people "class"(?). 

Dad was a town raised Iowan who became an Oceanographer near D.C.. Mom was raised on a 200 acre farm in Iowa and besides being a housewife, homemaker, etc, etc, she worked 12 or so years for the Library of Congress, at one of their Annexes. 

I was raised outside of Wash.,D.C. in the 'burbs.

My wife and I live in a 175 yr old farm house, in the country, in the extremely northern part of NY State. Not the Hamptons, no siree, or Manhattan. 

So, Most people who buy my honey do so at health food stores, farmers markets and the local area chain grocery stores. I like to have my Squeak Creek Honey in the produce section of the store for two reasons in particular, it's the first section that you come into when you enter the store and the produce section of the store has, or can have a lower mark-up, so as to keep the shelf price low for the consuming customer.

But, when I was in the store in Canton and saw what they had there, I thought, "Why not MY Honey?". I see it as another outlet for my honey. 

If I get my honey into every possible outlet, who knows where it will go. Japan? Flushing,NY? Alaska? Maine? Florida? Maryland?

Except for Japan, my Squeak Creek Honey has gone to all of those places and many more that I don't know about, yet.

An aquaintence is working on Japan.


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## sqkcrk (Dec 10, 2005)

!!! HEY EVERYBODY !!!

I just had an idea that I wanted to run by you all to see what you think of it.

I sell alot of honey to stores.
My phone number and address is on the jar.
So far only a very few people have tried to find me to buy the honey directly from me.
My wife sold a jar of honey yesterday at $1.00 less than I usually sell it for. And she doesn't really like to sell honey from the house, because I don't have a sign to tell her how much to charge.

So, what I thought is this. I could put up a sign posting the prices for honey at retail price.

Or I could put up a road side stand, self serve. 

Either way, I feel that I should set the price for at home retail sales at the store retail price plus 10%(?). That would make a 5lb jar price here $16.50. Is that enough? I like even, whole numbers, so let's say $16.00.

What do you think? Should I make it higher for my time?


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## BerkeyDavid (Jan 29, 2004)

Joel - well thought out and well said

Mark - I had the same experience, had my phone number on the label. I took it off. Too much trouble to deal with the public at my home. I even had a lady call upand wanted a tour of our honey farm, wanted to see the cows milked and take a wagon ride... When my wife told her it was a bee farm, she said "I don't want to see BEES!"

I determined it is better to just sell wholesale to the existing farm markets. They take as much as I can make. As my supply grows I will look for additional markets. But I plan to do more diversity as recommneded above ratherthan be dependent on just one market and just honey.

But the main thing is to determine why you are in it, like Joel said, then work your plan.

[ January 18, 2006, 04:01 PM: Message edited by: BerkeyDavid ]


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## sqkcrk (Dec 10, 2005)

Oh, I'm workin' it, alright. I was just trying to take a little strain off of my spouse and still serve those who want to get it here.

But I was also trying to set the price at a level that would make someone think twice about coming all the way out here, when it costs them more.

How about that? If I am going to do some work(visiting is work sometimes.) then shouldn't I get paid. And isn't home sales like being in competition with the stores that I sell to?


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## sqkcrk (Dec 10, 2005)

Berkeydave, Where is Berkey, OH? I used to live near Wooster, OH. Lovely State, Ohio. Lots of good time were had there. 

One time I went to Farmerstown, sorta near Mt. Hope. There is a cheese house there that makes only swiss cheese. The cheese maker is from Switzerland. The best swiss cheese I ever ate. 

It makes so much difference getting things from the source. That's probably what a person who calls you wants. That personal touch. So, if you can take the time to give it to them, you just might make a customer for life. Someone who will remember their time with you and buy your honey when they see it at the store. And tell their friends about you and your honey, too.


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## tecumseh (Apr 26, 2005)

sqkcrk adds:
and the produce section of the store has, or can have a lower mark-up, so as to keep the shelf price low for the consuming customer.

tecumseh replies:
interesting bit of info sqkcrk. now I knew that in your typical brick merchant that the location of the shelf represented different mark up values but I never considered (although it makes all kinds of good sense) that the produce section maintained a lower mark up.

and as to your question on direct sales, yes I would think that this might be perceived by the store as competing with them for sale dollars. naturally a lot of this perception is dependent on how store management perceives the importance of a particular product. which is to say... if it is a product that brings folks into the store that is one level of importance, it it is simply something that the buyers expects to find on the shelf on a regular bases that would be of lower priority.


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## sqkcrk (Dec 10, 2005)

I learned an interesting thing about "mark up", yesterday.

What is "mark up" to you? How is it figured?
I thought that mark up was done by taking a product cost and adding a percentage to it. And that is a type of mark up.

Well, apparently the stores do it differently.

Let's see if I remembered correctly. The store has a price at which they want an individual item to sell for. They have the cost of that item, to themselves. The difference is their "mark up."

An interesting way of looking at it.


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## tecumseh (Apr 26, 2005)

sqkcrk adds:
An interesting way of looking at it.

tecumseh adds:
yes your description sounds about right and is the correct technical form for mark-ups. anyway it is not just a simple percentage over cost as many assume.


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## Zarka (Jan 14, 2006)

This has been an interesting thread. Now I have a few questions and some comments. 

The joke about $120/lb honey last year was a good one. (Unless the bees died, in which case it is a tragedy and no laughing matter, and probably true to boot. How can it be true, otherwise?)

I'm sure for large scale and rural producers it's going to be different answer, but it seems to me there's a burgeoning market for raw comb honey, organic produce, etc, especially in big cities and this is where profit can be made.

I have only one hive right now, started with a feral colony in Los Angeles and I suppose in the last three years we averaged spending $100-150 a year getting started, and the honey we got has been 20, 40, 70 lbs, approximately.

This adds up to about $3.00-3.50/lb for a hobby, not counting our time. Not too bad. 

My friend and bee partner is deciding to sell some of her half to a small shop that is specializing in local, organic artisinal foods, and I believe that it's selling for more than twice this price (although I don't know the details, or jar costs). Since she works in a bakery she has access to a certified, inspected kitchen and it's all legal, healthwise.

So now we're thinking of adding hives, however since it's a backyard hive, we'll have to find two more backyards, as one is plenty to pollinate mine!









We're trying to figure out what's a better way to remove honey: 

extractor? She got one used and low cost, but it's galvanized...seems like we have to do it on a hot day and it will cause a lot of wastage.

Cut Comb: I like just cutting it and using like that. Personally, I don't taste much difference between raw and heating just enough to make the wax float to the top, so I do that with some of the stuff I use, and what I send relatives for presents. 

Comb: I bought some of those plastic frames that become lidded boxes when capped and removed, so we'll see how that goes. If the store doesn't want to sell it like that, we may try another store, or just use as xmas presents.

Another problem will be we have to do extra travelling to service hives in different places. If I do put more than one hive in my backyard it will be easier. Do hives sitting next to each other cause problems with the bees? How far apart should they be? 

I'm also concerned a bit about mites. Right now I have no health problems, probably because I'm at LEAST 5 miles in any direction from a commercial bee operation (Angeles Nat'l Forest, Santa Monica mtns, Santa Susana mtns, Bob Hope's huge land holdings, now Nature Conservancy, Griffith park...I'm surrounded, but distant enough) where they might have contact with contaminated bees. I worry that increasing the hive number will increase my risk of infection.


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## tecumseh (Apr 26, 2005)

much like zarka, tecumseh will incorporate more cut comb honey in his plans for this coming season.

by the way zarka I have always assumed that an apiary location would be rare that would not come into contact with mites from either feral or domesticated origin.


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## carbide (Nov 21, 2004)

> If I do put more than one hive in my backyard it will be easier. Do hives sitting next to each other cause problems with the bees? How far apart should they be?


You can locate your hives as close as you want to and it won't cause any problems with the bees. You may however want to keep a few feet of distance in between them in order to be able to work on one hive without disturbing the other. A lot of the commercial beeks keep four hives to a pallet for ease of moving the bees from one yard to another or to locate them for polliination contracts. I typically leave two feet or more between my hives for ease of access.


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