cost of a meat bird

[greenway]

i have a bit of a dilemma and would like to know what you think.

my neighbor down the road also raises meat birds and sells them on a local site. he sells his for $3.99 a pound. i sell mine for $3.50 a pound. he recently called and asked me what i sell mine for. when i told him how much i sold them for, he said "this is a problem". i think he wanted me to raise my price to match his. i told him i'm not going to do that since i only sell maybe 50 in a year just for my local friends although i do advertise on the same site he does. he sells probably 200 to 500 a year.

i told him i was not going to change my price. he said he barely makes even at $3.99 and me selling mine for so cheap would not help him.

 

[citrusdreams]

I think it's none of his business. If you can sell yours for whatever price you want, without losing money by your standards, then you should be able to set your prices any way you want. Even if you're are losing money, it's your perogative.

I can't even imagine someone having the audacity to contact you and make such demands of you in the first place. But that's just me.

 

[jaku]

You have NO dilemna. Sell them for what you want. This is wrong on so many levels. First, his only interest is making more money for himself, and you not taking away from his business. Second, he wants to be able to gouge customers for whatever he wants- if you go "in" with him, customers will not be able to shop around for the best price because the prices will be fixed. So, not only is he screwing you, but he's also screwing the customers. Tell him if it's such a problem, he should just buy all of your chickens then resell them at his higher price, making him 50 cents a pound. Otherwise, I'd drop my price by a dime and start advertising more, just to spite him.

 

[lux_interior]

if he has a problem with competition, he'll have to match YOUR price, not the other way around.

 

[zephyrcreek]

Well, I agree and disagree.

I have read MANY books are starting/operating small farm businesses. One of the key points often made is that it is a disservice to yourself and you local competition to greatly underprice your products (most of the reading was about meat prices). The reasoning behind this is that if you price your product at rock bottom prices that it undermines the value of the product in the consumers eyes. It does not sound like you are doing that to me. On the other hand in my area I am asking $2.50 a lb. Our area normally runs from 2.50-3.50 a lb. This is my first year hence the $2.50. I ran across a sign this week at a feed store selling chicken at $1.75 a lb. Needless to say I was not happy. That GREATLY undervalues the product, but I would NEVER in a million years consider calling the person and making a complaint. I would very gently hint at what the "normal" price range was in our area if I did meet them somewhere.

 

[bja105]

If the market will bear $4, raise that price. Your leaving money on the table otherwise. If the money isn't an issue, why charge at all?

 

[jaku]

Quote:
But your concern is with YOUR lost profits due to being undercut- not the fact that this feed store's customers might be feeling they're getting inferior product. In my opinion, if you want to compete, you need to lower your prices. That's just how Capitalism, and the law of supply & demand work.

Businesses getting together to control prices, not allowing customers and the free market do so is just bad news, which (simplified,) is why gas is $3/gallon right now, and will only go up all summer long.

 

[zephyrcreek]

Quote:
But your concern is with YOUR lost profits due to being undercut- not the fact that this feed store's customers might be feeling they're getting inferior product. In my opinion, if you want to compete, you need to lower your prices. That's just how Capitalism, and the law of supply & demand work.

Businesses getting together to control prices, not allowing customers and the free market do so is just bad news, which (simplified,) is why gas is $3/gallon right now, and will only go up all summer long.

I agree....to a point. I'll use Walmart as an example. How much of our current financial crisis is caused by Walmart and other stores just like them. So much of our products are now being made overseas because people wanted to save a buck, and the goods could not be made here in the USA paying workers decent wages. Now all that manufacturing business is being shipped out to countries that are paying their workers such small incomes that in almost constitutes slave labor......or they are just plain using inferioir or outright dangerous supplies. Should we mention all the kid toy recalls a year and a half ago. There needs to be a middle ground.

I am just trying to look at the issue from both sides of the coin. Truth be told when I found out that another local person was selling their chicken for $3.50 lb I felt bad that I priced mine so low. Not because of the potential $$$ I was not making, but because they are good people and I do not want to take their business away. That's just me. Now if they were selling an inferior product or did not treat their animals well I would not care a bit.....but that is not the case here. I do plan to raise my prices later this summer.....but I need to be confident that I can sell what I have. I sure do not have room for 400 broilers and 40 Turkeys in my freezer.

 

[Kezzie]

Quote:
Actually, that's not how capitalism and the law of supply and demand work (but that's how people often think they do).

The main goal is to provide VALUE for the customer. Value is defined as Quality compared to Price. Dropping your price only increases value to the customer to a certain point- past that the customer begins to be concerned that the price is low because of inferior quality and they mentally readjust their concept of value.

Never mind what the competition charges. They are charging based on their cost structures that bear no relation to your own. Look at your costs, look at your realistic profit, and calculate your price accordingly. Then, it's your job to sell the value to the customer. Promote the value of your birds over others- talk about free range, organic etc. and what difference those things make to the customers' experience.

Lowballing prices is a great way to go out of business quickly. You don't want customers who want the very lowest price. They are not loyal and will leave you in a heartbeat when someone down the road drops their prices by a nickel. Go after the customers who care what they are putting in their bodies and get them to understand that you are the vendor that can be trusted to meet those needs.

 

[UncleHoot]

If you're only raising 50 or so, you could continue selling for $3.50/lb to friends and family, and $3.75 or $4/lb to others. If their only alternative is to buy from the "other guy" or from you, then you're not really losing out.

But aside from that, $3.99/lb? Good grief! On 150 chickens, I could make a $2,000+ profit! I'm selling for $2/lb, which is close to what others charge for "farm raised" chickens in my area (I pasture). That's just enough to make a small profit of $1-$2 per chicken.