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Growing Pains

Desiree Velazquez

Hi, all! We need to have a chat about something that I have been dreading to chat about, but is super important: Business Growing pains aka pricing changes. Gah! There it is! *cringey face*

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I'm not sure if some of you have noticed, but pricing has been going up slightly compared to what I started with in February. I am little by little trying to get to my goal pricing. Here's why: When I started Lilasuds LLC I had ZERO idea on how to manage a business. I went with the flow and unfortunately that's something that isn't bulletproof when it comes to the sustainability of your business. I made the classic mistake many soap makers / businesses make and that is to establish some sort of pricing by comparing your product to other peoples' pricing. Well, lots of number crunching and a solid business course for soap makers under my belt and I realized that my product was SEVERELY underpriced. Needless to say that I hadn't even paid myself a cent since this journey began. Gosh, the will to get this business going has been POWERFUL but at the end of the day undercharging and underpaying myself can't keep Lilasuds running. I was bleeding out my personal pocket to get this going and my dears, that's just not how things should be done. I love y'all and I adore this business but if I can't preserve myself, there's no way there will be someone there to oil this machine in the long run. 

I call these changes growing pains because as the business grows and I learn how to manage things better, I know it's tough to make these changes but I have to be transparent with you all. Here's why starting out with comparative pricing was something that has hindered me more as a business rather than help: First of all, what if the person you are comparing your work to doesn't know how to price things either? It becomes an ongoing loop of badly priced items and unfortunately the consumer doesn't know that, but you as a business will be on the receiving end of that. Also, if I established my pricing by comparing my work with other peoples' products, I'm not taking into account what that person spent on supplies (we all have different recipes), what that person who is quite possibly in another state pays in taxes (sales taxes and state/federal taxes are three completely different things), how much that person spends in labor according to their state (and minimum wage in NYC is $15/hour FYI), how much this person spends on packaging, overhead, rent (and y'all know how ridiculous NYC rent is), business expenses, licenses, marketing, etc. The list goes on. I had no clue how to take all of those expenses into account and calculate a proper price that was also profitable for the business. I didn't even think I had to take that into consideration! Profit? Ah! How is that even possible?

I noticed that for being in NYC my product was really underpriced, yet my designs were so much more elaborate and my ingredients have always been of very high quality (and will continue to be). I only purchase supplies from reputable and certified sustainable vendors. In a sense it's OK to compare your pricing to other businesses in your state as a ~guideline~, but not as a definitive. So, after some hefty market research, some number crunching, I realized my products were severely underpriced (and I'm talking like $4~5 underpriced). Back to the drawing board it was!

Another thing that I know affects sales is shipping costs. I promise I have done everything possible to get the best shipping rate for you all. Again, I have to be transparent as it's one of the most important values in my company. It is extremely costly to absorb shipping costs, which is why that has to be accounted for if in the future I am to offer even lower shipping costs or "free shipping". In the end, I want to make the shopping experience the best for YOU. I make these soaps so that YOU can enjoy them.

So just to round things off, I know some of you have seen the changes and I understand it. Trust me, I myself am not my target market (otherwise my customers would be exclusively soap makers), but I put myself every day in the shoes of my customer. Everyday I am trying to be smarter and more efficient with my business while still providing the quality and creativity I have so far. I have already reached a tipping point in under a year and I'm trying my hardest to avoid that at all costs again. There is a very delicate balance between running a business and being run by a business.  I learned that the hard way.

I am so grateful for all of you that have supported my soap venture and have understood my Lilasuds' growing pains. I can't tell you how much that means to me because aside of your support to my business I see it as a support to me, the one-woman show running this joint. I appreciate that you all value my self preservation as a sole proprietor in this LLC (and only employee). I hope you all understand where I'm coming from and again, thank you so much! 

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