Flavor Friday Episode #7 – Special Pricing Episode
Today we were fortunate enough to have Lyle in town and I wanted to go over the true cost of Snowie Flavors due to our many conversations with people, but mostly because we had this experience at IAAPA. I will share that in a little more detail here. There was a gentleman at IAAPA that had one of our stands, shavers, etc. He private labeled his stand, so he was not operating under the Snowie name. He felt like his ice shaver was not putting out the same quality snow as the one we had in our booth at IAAPA. He asked if we would visit his stand that night and take a look. So on our way back to our room, we paid him a visit. This visit was very educational. The first thing we noticed upon arriving was that his ice merchandiser was not maintaining the temperature that he had set it to. So, while he and I were fixing the temperature of the freezer, Carl, Gordon, and Lyle were in his stand trying some of his flavors. When we returned to the building, there was a discussion taking place about his flavors. They started to ask him, why not use Snowie’s flavors. He mentioned that they were simply too expensive, that there was a $20 gap between his supplier and Snowie. So, I felt that I needed to try some of his flavors. Let me just say that they were not good. It was so interesting how curious he was about how he could get his snow absolutely perfect, yet he flavored that very snow with discounted flavors. At that moment, I wanted to do a live broadcast on why premium flavors are absolutely necessary, especially when you break down the actual cost of those flavors. For literally less than one penny per shaved ice, you can have your customers coming back again and again and even have them saying, “Wow!” in the process. We talk about the R&D we put into our flavors, but I am not sure that messages plays clear to everyone. Only the very best ingredients go into our flavors. There are even a handful of flavors that we lose money on because we feel it is critical for your customers to buy an insanely delicious shaved ice. By continuously maintaining and bettering our flavors, we can assure you and your customers that they will experience the best in snow cone flavors. So, want us to prove the penny? Make sure you watch the video, but I will spell out the Math here as well: First, we took the comparison from this guy who said we were $20 more per gallon than his supplier. The first thing we need to ask ourselves is, how far will your concentrate go? First, if you are buying our concentrates by the pint, then for $50, you can buy five pints. If you buy that concentrate in a gallon form, you are getting 8 pints for the same $50, which is a 38% discount. This is our first piece of advice when trying to save money. Now, let’s see how far that gallon will go. Your gallon of concentrate that cost you $48.71 will make you 32 gallons of flavor. That 32 gallons will make you 2048 8oz shaved ice using two ounces of flavor in each. If you are selling those two ounce shaved ice for $3.00 each, you have now made $6144 from $48.71 That is quite the increase. Now, lets calculate the cost difference between having Snowie’s premium flavors and a cheap alternative. Take that extra $20 and divide it by 2048. It is literally $0.01 for each shaved ice more. Are you willing to have people actually react to your flavors negatively over one cent per shaved ice? Now, let’s calculate it the other direction and see how quickly we can recoup that extra $20 from gaining repeat customers by using Snowie Flavors. On $3.00, lets lump every cost you have, (rent, labor, cogs, etc.) into that shaved ice and say you are going to make $2.00 profit on each shaved ice Your profit is higher than that, we are just simplifying the math. At that $2.00, you only need 10 people to come back and buy another to totally recoup that extra $20. That is 4/10 of 1% of your customers returning. Let’s say you even have 2% of your customers return, that is 40 customers giving you $80. That pays for your extra $20, plus it buys you another gallon and puts $10 in your pocket. That is if you are only getting 2% of your customers to return. But if they experience the Wow factor with your shaved ice flavors, that percentage will be much higher! Using Snowie Flavors does not cost you more money, it makes you more money. If you don’t believe us, try it out, you will be pleasantly surprised!
Today we were fortunate enough to have Lyle in town and I wanted to go over the true cost of Snowie Flavors due to our many conversations with people, but […]