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.