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I received an email today from a gentleman who is into health foods, and is a registered pharmacist/author. I googled him, and he sounds legit.
He wants me to create a soap with sweet potatoes in it, but he wants the formula so he can make it himself. I am not even sure if he knows how to make soap. I did mention that I could create the soap and do a private labeling, but that my business name would need to be on the packaging as the manufacturer. He did say that if we did this, it would have to be a partner agreement. He must not understand how this works, and I would never 'partner' with someone. My services are for 'sale'.
Any ideas on this? Am I creating a competitor if I develop a formula for him? How would I charge for this? This could be simple or quite complex...or maybe I am overthinking it.
You could make a small batch, Candice, and send him a bar when it's cured. If he likes it, you can then offer to sell him the recipe and instructions at a price that pays you for your time, and... knowledge. What he does with it then, is up to him.
Reach out. Make friends. Let's lift each other.
Thank you, Susan! That is a great idea....although I have no idea how to put a price on this. I have only priced products. I have actually done custom work, but have not charged extra for it because I was gaining experience and found that very valuable for me. But it is time to place a value on my time, experience, and expertise but I have no idea where to start, or how to do so.
Remember this conversation from last year?
Yes lady! It's time!!
I know you'll make a super sweet potato soap. I like Susan's idea of moving slowly so you don't put in too much on the front end taking away from your core. I would charge enough for the test batch to cover your time (research, manufacturing and shipping) -- 50% in advance and 50% when you deliver the test batch. This way, you at least cover the costs you incur.
Good luck, and if you have any of that sweet potato soap left over, I'd love to buy a bar and test it out too!
Can't wait to see what you do!
Hi Donna Maria!
I do remember this conversation! :) And guess what.....that same lady is asking me to make another custom block of soap, which is approx 75 bars of soap. When I did this for her last year, I kept the soap with me and just cut and packaged it the way she wanted it over the year...whether it was full bars, half bars in organza bags with custom tags, or hotel size bars in organza bags with custom tags. The mistake I made last year was that I only charged her for what the batch would be for full size bars. Live and learn because she ended up wanting much more in half bar and quarter bar sizes in gifty organza bags because they were great for customer gifts and event give-aways for marketing purposes. I made the labels with her logo on them and her custom scent name. The half bars and quarter bars are more expensive because there is more labor involved with cutting, etc. and more expensive packaging materials. Sooooo, this year I am charging her with the half bars and quarter bars taken into consideration. I don't think she was completely prepared for the final price, which total ended up being about $50 or so more than last year, but it had to be done. As you said.... it is time! :)
And, yes! I will send you a bar of the sweet potato bar(if I get the job) when finished! :)
Ok....so, the test batch itself (I know what this is worth ... pretty straight forward) and shipping. But, I need to give him a fee for R&D of the formula. And then if he wants to purchase the formula I create, I will need to let him know what the fee for that would be. Help? Thank You!!
I don't know. It is probable that handmade soap with fresh sweet potato will take a long time for you to develop, and possibly re-develop since it involves a fresh vegetable? Or do you have access to information about how to make the soap not go rancid or whatever, which would cut your R&D time?
The first thing is to estimate how much R&D time it will take you. Put an hourly rate on that and that's your fee. You can perhaps let him know that if he orders at least a certain amount of the soap afterward, you will credit part of the R&D fee.
There are many possibilities and the nuances are really important here. It's very difficult to offer good suggestions without knowing those nuances, how the relationship has evolved, etc. Those things make a difference, and without access to them, I can only offer random suggestions. But I hope they are helpful :)
Thanks, dM! I have decided to charge $150/hour for R&D. Plus a fee for the making of the test batch itself/cost of supplies. Shipping of test batch. Plus $500 for ownership of the formula I develop. Fee of $150/hour for any changes made to original batch.
If he decides to have me do the manufacturing as well, with the stipulation of putting my business name on the label(as with private labeling), I will give him a credit of $100 toward 2 - 20lb. blocks of soap.
Thanks so much!
Oh, and I am also going to offer private labeling with my own formula, just customized with his ingredients. That would save us both time and him money. And I am thinking of charging $1,000. for ownership of the formula, if he chooses that route.