Comments on: Candle Wax + Rising Fuel Costs = Zero Profit http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/ Resources and Knowledge for the Small Business CEO Tue, 06 Jan 2009 08:43:33 +0000 http://wordpress.org/?v=2.6.5 By: Nancy Forsyth http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5486 Nancy Forsyth Thu, 28 Aug 2008 22:50:08 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5486 Amanda, we found a fix for our problem. Be glad to share it with you. Please feel free to email me :) Amanda, we found a fix for our problem. Be glad to share it with you. Please feel free to email me :)

]]> By: My Finds Online http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5409 My Finds Online Thu, 14 Aug 2008 14:43:15 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5409 <strong>Little Profits Prompt Me To Temporarily Close My Candle Business...</strong> As you may know, I have been making and selling candles online and locally for the past 4 years now. With the increasing rates of raw materials and fuel, sales dropped dramatically and I have made the choice to close down my small business operation t... Little Profits Prompt Me To Temporarily Close My Candle Business…

As you may know, I have been making and selling candles online and locally for the past 4 years now. With the increasing rates of raw materials and fuel, sales dropped dramatically and I have made the choice to close down my small business operation t…

]]> By: I Will Not Surrender To The Economy! http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5397 I Will Not Surrender To The Economy! Tue, 12 Aug 2008 13:53:48 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5397 [...] week I wrote the post, “Candle Wax + Rising Fuel Cost = Zero Profit” and was amazed at the responses I got almost immediately.  I want to thank everyone who [...] [...] week I wrote the post, “Candle Wax + Rising Fuel Cost = Zero Profit” and was amazed at the responses I got almost immediately.  I want to thank everyone who [...]

]]> By: Martin Lindeskog http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5391 Martin Lindeskog Mon, 11 Aug 2008 07:49:59 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5391 Amanda, I will contact you regarding your business. I see international opportunities! :) All the Best, Martin Lindeskog - American in Spirit. Gothenburg, Sweden. Amanda,

I will contact you regarding your business. I see international opportunities! :)

All the Best,

Martin Lindeskog - American in Spirit.
Gothenburg, Sweden.

]]> By: Nancy Forsyth http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5384 Nancy Forsyth Thu, 07 Aug 2008 16:54:28 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5384 Amanda: We are also in the soy candle business and in the same boat as you because of the flooded soy crops in China last year, this year in Iowa and commodoties speculation driving our prices therough the roof. Our costs tripled in the last year. We have stopped all wholesale production and are only selling at retail cost now at about 10% of previous volume. We started the business so that one parent could be a stay-at-home, while not taking a huge loss in income. We sympathize with you and are actively searching out other alternatives, but the enjoyment that making our candles provided can't be replaced. Our best wishes in your endeavors. Amanda:

We are also in the soy candle business and in the same boat as you because of the flooded soy crops in China last year, this year in Iowa and commodoties speculation driving our prices therough the roof. Our costs tripled in the last year. We have stopped all wholesale production and are only selling at retail cost now at about 10% of previous volume. We started the business so that one parent could be a stay-at-home, while not taking a huge loss in income. We sympathize with you and are actively searching out other alternatives, but the enjoyment that making our candles provided can’t be replaced. Our best wishes in your endeavors.

]]> By: chris http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5381 chris Wed, 06 Aug 2008 19:01:53 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5381 One point I'd like to mention that I think some are not taking into consideration here is that - candles are HEAVY. Shipping is costly. Selling online and buying a candle for $10 and then paying $8 to have it shipped really isn't justifiable in this current economy. Another point I'd like to make is that given our current economy, people are making cutbacks in their spending. And unfortunately, having candles in your home is one area that people can afford to live without right now. It's an unfortunate situation. And as far as going global, you'd pay twice the cost of the candle just to receive it at your door. It's not enticing to buyers and it sounds like she wasn't running a factory. Most likely, this was a home run business situation. Not that it couldn't be taken to the next level, just that for a home run business to go "BIG TIME" - that's an awful lot to overcome a poor economical situation right now. I understand why the biz is temporarily shut down and it sounds like some price increases took place prior to making that final decision. I'm sure in the near future, you'll have another shot at it. Maybe it was for the best, too. I know many people probably would've tapped into personal assets, savings, etc. in an effort to avoid closing the biz. And that probably would've landed them in hot water for many years to come. So I think you did the right thing. Wait it out - this too shall pass. One point I’d like to mention that I think some are not taking into consideration here is that - candles are HEAVY. Shipping is costly. Selling online and buying a candle for $10 and then paying $8 to have it shipped really isn’t justifiable in this current economy.

Another point I’d like to make is that given our current economy, people are making cutbacks in their spending. And unfortunately, having candles in your home is one area that people can afford to live without right now.

It’s an unfortunate situation. And as far as going global, you’d pay twice the cost of the candle just to receive it at your door. It’s not enticing to buyers and it sounds like she wasn’t running a factory. Most likely, this was a home run business situation. Not that it couldn’t be taken to the next level, just that for a home run business to go “BIG TIME” - that’s an awful lot to overcome a poor economical situation right now.

I understand why the biz is temporarily shut down and it sounds like some price increases took place prior to making that final decision. I’m sure in the near future, you’ll have another shot at it.

Maybe it was for the best, too. I know many people probably would’ve tapped into personal assets, savings, etc. in an effort to avoid closing the biz. And that probably would’ve landed them in hot water for many years to come. So I think you did the right thing.

Wait it out - this too shall pass.

]]> By: Steven M http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5380 Steven M Wed, 06 Aug 2008 17:28:14 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5380 Sorry to hear that Amanda. I have started and lost several businesses over the years as well. And yes I was "innovative" and tried to increase sales with new ideas and approaches. I put in more hours, met more customers, streamlined operational costs, and every other guru or textbook related cure. It boils down to this and it cannot be refuted: small business is risky and the owner will never anticipate all fatal business or regulatory threats. Small businesses fail at alarming rates and no amount of perseverence or innovative dreaming will change that fact. My advice Amanda is to use your creative impulse for something that pays and does not subject your life to the unnecessary risks of small business ownership. Sorry to hear that Amanda. I have started and lost several businesses over the years as well. And yes I was “innovative” and tried to increase sales with new ideas and approaches. I put in more hours, met more customers, streamlined operational costs, and every other guru or textbook related cure. It boils down to this and it cannot be refuted: small business is risky and the owner will never anticipate all fatal business or regulatory threats. Small businesses fail at alarming rates and no amount of perseverence or innovative dreaming will change that fact. My advice Amanda is to use your creative impulse for something that pays and does not subject your life to the unnecessary risks of small business ownership.

]]> By: Quitting for the wrong reasons | Business is Personal http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5379 Quitting for the wrong reasons | Business is Personal Wed, 06 Aug 2008 17:11:43 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5379 [...] in Small Business CEO, I read a story about a small business that was calling it quits due to “high oil prices and the economy” (my [...] [...] in Small Business CEO, I read a story about a small business that was calling it quits due to “high oil prices and the economy” (my [...]

]]> By: Kenneth http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5377 Kenneth Wed, 06 Aug 2008 10:21:04 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5377 Amanda I think you are very brave even to be in manufaturing these days, precisely for the reason you have described, escalating raw material prices. If you cannot achieve a margin at the level of Price less Materials there is little option to either increase prices or stop production. I suspect your comments about your ability to keep your rising costs lower than competitors is your first salvo in the fight back. Let customers know how much you would have had to charge,they may well support you. Some of the most powerful businesses use the "retreat tactic". Live to fight another day and all that! Good Luck Amanda
I think you are very brave even to be in manufaturing these days, precisely for the reason you have described, escalating raw material prices.
If you cannot achieve a margin at the level of Price less Materials there is little option to either increase prices or stop production. I suspect your comments about your ability to keep your rising costs lower than competitors is your first salvo in the fight back. Let customers know how much you would have had to charge,they may well support you.
Some of the most powerful businesses use the “retreat tactic”. Live to fight another day and all that!
Good Luck

]]> By: Techrat95 http://www.smbceo.com/2008/08/05/candle-wax-rising-fuel-costs-zero-profit/#comment-5375 Techrat95 Wed, 06 Aug 2008 03:29:53 +0000 http://smbceo.com/2008/08/05/raw-material-price-increases-affect-my-small-business/#comment-5375 Wow! Yes, we’ve had our own bouts with this because we offer field service to our customers. We have been able to curb this partially with half of our staff by simply compensating based on the federal mileage rate of 58.5 cents per mile, but for our company vehicles which we fuel internally, the cost has really come against our bottom line! Wow! Yes, we’ve had our own bouts with this because we offer field service to our customers. We have been able to curb this partially with half of our staff by simply compensating based on the federal mileage rate of 58.5 cents per mile, but for our company vehicles which we fuel internally, the cost has really come against our bottom line!

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