To tell my friend her business is failing because her artisan products are too expensive

[startrekk]

My friend is a great baker. Her products are lovely and consist mainly of homemade muffins and savoury muffins.

She makes her products and sells them at local events and has a weekly stall at the farmers market.

The problem is she is failing miserably and ended up not selling a single item at her last local market.

The products she sells are lovely but they are just muffins and while people will pay quite a bit for a warm homemade waffle covered in Nutella and strawberries, they just aren't going to pay that much for a muffin. Also you have to take into account that while people will pay a lot for a cake and hot drink in a coffee shop. You are paying for the atmosphere as well. You can sit in, have a chat, use their WiFi. It's different when you're selling a muffin and drink to take away. The value decreases to most people.

My friend charges £3.50 for a muffin, no deals for multiple purchases and £3.00 for a smallish coffee.

She has competition from stalls charging £1.50 for a coffee and a lot of places sell cakes for around £1-£1.50 each and they are just as nice as my friends. The demographic of the area is not wealthy. There are pockets of affluent areas but also a lot of poorer areas and a large student population. It's not like she is selling in Central London.

I have tried to explain that she could try selling the muffins for £1.50 or do a deal of 4 for £5 and increase the size of the hot drinks but for some reason she is very keen to keep the prices very high despite it already proving a bad move.

AIBU to think that high prices don't mean higher profits and she could make far more money charging a reasonable price? The muffins cost about 20p each to make.

Don't tell her; she has to realize it herself.

To be honest its not nec JUST pricing its also about who her market is and are they at the markets she is going to.

She needs to outline who her market is, investigate where they congregate and then cost up based on the cost of stalls there to reach her market.

Her problem at the moment is a mismatch between her marketing strategy and the market she is available to.

So at her prices currently she wants to with those who have a large discretionary spend and also don't really count the cost of the puchase - yes some people blindly just want what they see and don't need to think about the cost too much. So Polo events, Race days, artisan and farmers markets in more well off areas etc.

I think if she wants to stick to muffin (I am assuming we are talking cake here not bread muffins) prices then she needs to package it properly for that price (ie beautifully so it can be given as a gift - maybe persononalised??) or with a drink for free for eg. a standard flat white or tea comes in with the price.

She could also consider a different packaging route for eat it nows e.g in an icecream tub with a bamboo spork or something - wld reduce packaging costs overall (and waste) and also makes it more manageable to eat.

I would approach it as a how to drive her sales thing rather than telling her her pricing is wrong.

If she's been to a market and sold nothing, does she really need you to tell her? If you're not selling, you drop the price. Especially with things like baked goods which are perishable.

Is it a serious business business, or is it a hobby which she is playing at having a business because it sounds better?

I don't understand how they cost 20p to make if it's an 'artisan' muffin

I'd be expecting organic, local, cruelty free etc for that price - which I'd be happy to pay

I had coffee and cake in a coffee shop in a beautiful Home Counties village yesterday, one which has notoriously high business rates and in which several staff are employed as well as the premises kept running. I paid £4.75 for both and I sat there for half an hour whilst I wrote Christmas cards. There's no chance I would pay £6.50 to go and have it on a bench, in my car or at home (after the coffee had gone cold).

I think people are also getting a little bored of artisan stuff though, the whole concept is now enormously oversold and mostly copied in supermarkets so it's just not that exclusive anymore

To be fairly cynical, at something like a one off event or farmers market, where your repeat trade is negligable, people buy with their eyes, rather than by how something tastes. She needs to make things that look like an irresistible treat, rather than everyday thing.

Was on holiday in Scotland last week and had a fabulous raspberry and white chocolate muffin in a café in Grantown on Spey, price was £2.50.

Artisan is another fancy smantzy name that is bandied about quite a bit, to denote something that is home made. Artisan used to mean that it required a particular skill to make, but I don;t think it requires much skill to make muffins. £7 for a coffee and a muffin, no thanks, I would feel well ripped off from a market stall. If it was that to have coffee and a muffin in Harrods or Selfridges, or a posh bakery in Central London, than yes, I would expect those prices.

it isn't a business, it's a hobby. The defining characteristic of business is that it makes money.

Where did the start-up money come from?

6.50 for a muffin and coffee.. No thank you!

She is crazy. She should sell muffins 2 pounds or 2.50 max and coffee 1.50

They can't cost 20p to make. Has she told you that? There's no way that's properly costed.

I have tried to explain...

Sounds like you've already given her your opinion. Since she didn't think your opinion was correct, there's nothing you can do but zip it. If she complains, just shrug your shoulders. If she directly asks, repeat that you think she's priced too high.

20p to make a muffin? Nah, that can't be right.

From what you've written, I agree with you.

IF she asks your opinion, but isn't taking on board what you're saying, maybe suggest some market research. She could use surveymonkey or similar.

Turn up and give moral support while eating a much cheaper cake you bought on another stall.

Um, you've already told her, according to your OP. Don't keep going on about it. It's her business and she needs to learn to make good business decisions for herself.

Well a muffin should be around £2.50 and a coffee should be the same.

Would stay out of it.

Does sound like her business isn’t viable, sadly.

If they are truly artisan, she may be selling in the wrong place.

Round here posh cupcake type things go for around £1.20, have never seen an artisan muffin

Goldenbug
Turn up and give moral support while eating a much cheaper cake you bought on another stall.

Ha ha, best advice in the thread.

She's not done her research or price comparisons. That plus her stubbornness will probably end her business. Ask her gently what her research was. The small local bakeries do fantastic fresh baked muffins for £1.50 where I live. We don't have any large chains. And supermarket ones are always on offer at 4 for £1(it's not a wealthy area & no farmers markets ).

It’s very hard. People love their product and are confused when other people won’t pay what it is ‘worth’.

Presumably this is just ‘extra’ income and she isn’t using it to make rent?