Making a Profit in Wellness – What You Must Know
What You Can Learn from a 12 Year Old
This blog is a bit of a brag and a little self indulgent – I promise you’ll learn great things!
Many of you have met my 12 year old granddaughter at our previous Health Coach Mastery Events. Sykora was the one flitting around with the other kids from pool to pool and one activity to another…she was mostly a blur. She’s a good girl. She’s grown up around the health coaching business, plays all sports, sings beautifully, is an artist and gets good grades in school. Last year she took a coding class. The library gave it for free and she loved it. It was about the time she’d learned to bake and she was going to sell pupcakes. She had a website called Kora’s Pupcakery. Though she was excited about it, her heart and soul wasn’t in it – because it was created for the site – not the business. Besides that – she was only 11, now she’s 12.
This year Sykora and her friends have been buying bath bombs locally for about $45 for 3. That’s a lot of money for a 12 year old. She knows about health and wellness and essential oils. She understands the importance of pure ingredients. Sykora loves animals – so she decided anything used or produced by her business is going to be kind to animals – NO ANIMAL TESTING.
Kora’s been talking about colleges (she’s about finished with 6th grade now). She’s afraid she won’t get scholarships and she wants to be sure her choices aren’t limited. She’s even been asking about jobs. She told me about people graduating with tons of debt and she doesn’t want that to happen to her. So, this 12 year old is super motivated.
For those of you who don’t know – I have a website platform for e-commerce and programs pre-loaded for delivery for health coaches. Sykora asked if she could set up a website (without having to code it herself) so she could sell bath and body products that she would make herself. Grandma told her she came to the right place.
First thing a 12 year old (and many health coaches) wanted to do was to take pictures of herself for the website. She picked out her colors.
She knew what what she wanted the site to say, what the message needed to be and she even had a name. We bounced the name around and she ended up changing it. We got a URL. Amanda set a site up for her with a smile on her face.
We took some pictures of her with her products and the ingredients. It was fun – we popped it up on the site…told her story and showed her products.
Then, She sat down and looked at everyone she knows – and sent them a text/announcement that she was going to be starting a bath and body business and would have bath bombs, body scrubs and creams.
THEN – she asked me to tell everyone I know. (Her first jv partner).
THIS 12 year old had 12 sales! Right away – just because she told people about it.
Kora talked about friends who’d created a product and sold it so it only paid for the materials. “I don’t want to do that, if I’m going to do this, I need to know what calculations I need to make to insure that I have a profit”. We talked about the cost of doing business and the cost of goods sold. She was starting to understand why her bath bombs were costing $45 for 3 of them.
What Sykora took into consideration when pricing her bath bombs:
- Competitor pricing – $7-$20 each (price depended on oils included)
- Cost of her products
- Time investment into creation
- Incurred business expenses
- Special Packing necessary to preserve integrity
- Estimated # of products to be sold
- Desired profits
Kora didn’t want to cut the quality of the product and decided that she wanted to actually have better ingredients than the expensive bath bombs whose price I’d been complaining about. Ashlie and Sykora made some bath bombs and the cost came out higher than we liked and Kora wanted to make sure that the price she charged covered the cost of her products reflected the time that had been put into creating the product, the special packing that would be involved to ship, as well as the business expenses she incurred PLUS show a profit – for school tuition.
After some discussion, the final decision was to set her pricing structure up in a “tiered structure”. She would introduce her customers to the value of the product first with a basic bath bomb – then, she would sell options. I was so proud of her – I have all my students read “Blue Ocean Strategy” – to find a way to set themselves apart from their competition. She had found her strategy. You start with the basic bomb – then add oil options, shape options and color options. Each of these added to the cost and customization of the product and helped with her bottom line.
In the meantime, she and her mom are going to be working on product adjustments to keep the quality up and cutting the cost a bit.
What Kora has already learned after a week:
- she needs a solid business plan
- she can count on friends and family to help her get started
- there is a market for her product
- she can’t undercharge, so she found a way to price according to customization of products
- it’s going to take a lot of work to run her business
- it’s nice to have the right mentors