September is Seed Pricing
Egalitarian communities have trouble recruiting and holding members who have strong business management skills. There are a number of reasons for this. One is that these people are often not looking for us – if you really want to run a company or sell things, you don’t think to yourself , “i’ll move to the country and join a commune.” Another is that the corporate world highly values these skills and the egalitarian compensation package (which is you get what everyone else gets) compares poorly to the mainstream one (corner office, secretary, fancy car, social status, real and imagined power, stock options and distinctly unegalitarian salary) .
So while these communities are relatively successful keeping the production lines running and churning out seed packets and hammocks and tofu and nut butters, we are regularly understaffed when it comes to people who actually want to run these businesses or sell our products.
At a community meeting a couple months back i freaked out. It was explained to me that there was no systematic review of most of the prices of our seed packets. While we have increased operating costs and insufficient payment to many of our growers, most of our seed packs have not changed prices in the last 5 years. In essence, while our total revenues have been increasing, our margin on almost every seed packet has been going down for at least half a decade now.
Okay, back to first principals, if i am going to complain about this (which i felt like i had little choice about), i better be willing to step up and do something about it. Which is why this month is called Seed Pricing.
The process of analysis has actually been quite fun; i am working with a great little group which includes Acorn intern Clay, Ingrid, GPaul and Margot (who is not even a member). We have a large google drive spreadsheet with our own current and historic prices, other companies in our niche prices for similar and identical seeds (sometimes they only sell non-organic versions, further complicating the analysis), normalized allied companies prices (since they have different packet sizes), calculated price differentials between our prices and the average normalized allies prices, recommended price increases that keep us below our allies and on and on. It has been great to see this spreadsheet grow as we have entered more and more data, building a stronger and more precise case for how much prices should go up for our most popular varieties.
An early significant realization is that so little has been done for so long that we are not going to try to start by doing a comprehensive analysis of our entire product line. Instead we are looking at our best sellers, and starting by fixing the prices of what we sell the most of. And building a methodology which can be used next year for a more complete analysis.
What is also clear is that our dozens of hours of work will result in tens of thousands of dollars more income for Acorn and improved compensation for our growers at LEF and Twin Oaks. It does not take an MBA to know that this is a good thing.
[Edited by Judy Youngquest]