Price Point Per Unit and Pallets of Packaging
There was a point in this entrepreneurial journey when I didn’t know what a pallet was!
I mean, I knew about the word “palate” as it relates to a person’s appreciation of taste and flavor in my chocolate business, but to an importer & delivery driver, the use of the word “pallet” was completely different. And I didn’t realize just how much space a pallet was in my very small business!
You see, I am always thinking about our customer, what they want, and trying to put myself in their shoes. And I know that many of them are price sensitive so I knew I wanted to make sure the price of our high quality products wouldn’t be compromised, but also not priced out of reach. I wanted it to be accessible, but still made for the refined palate.
One way I knew a business could bring its costs down, was to increase their order quantity. So, I stayed ultra focused on the quantity of packaging I had to order, in order to make the price per unit of my boxes and bags of chocolates, reasonable for our customers. That meant I had to order not in the hundreds I thought I could sell, but in the thousands that I hoped we could sell.
What I failed to think about, was how much space, that total order of packaging would take up. For a small business in Hawai`i, the other thing that is extremely expensive here, is real estate. Just paying for storage for that packaging was a cost to our business that I didn’t consider. (Insert emoji of girl slapping forehead here)!
So when the driver on the phone said, I’m going to deliver about 4 pallets worth of packaging, I didn’t want to sound stupid and quickly replied, “Yeah sounds good. Bring em.” I wasn’t really sure how big a pallet was, but 4 didn’t sound like a lot…until he arrived at our back door and I saw him with the fork lift and I said, “OH…you mean that’s ONE pallet?!” (Insert emoji of girl slapping forehead again)
The next thing I knew, me along with two other team members I recruited on the spot were loading half our entire kitchen with box after box of packaging. This is the photo from that moment after the driver left and everything was safe inside. I didn’t know what the heck I was going to do next, so paused to take a photo, and hoped it would turn out to be “a good story” one day after we got through this.
Thank the Lord we did. I honestly don’t remember everything that happened after that point except that since then, I’ve always thought about the price per unit as well as the space it would take to store it all.
And we’re honestly still on the hunt for more storage space so we can continue to keep our costs down and find that balance between the price point per unit and having room for the pallets!
erin’s experience:
This lesson learned can go for any kind of shopping we do. We save when we buy in bulk from say Costco, but we need to also make sure we have the space for it or we’ll need to rent more space for our “savings.”