Silk Road forums

Discussion => Newbie discussion => Topic started by: xpsbud on March 27, 2013, 09:06 pm

Title: Most Cannabis Vendors Are Doing Their Best
Post by: xpsbud on March 27, 2013, 09:06 pm
I've noticed many threads started with "Lower the cannabis price!!!" in the title. I understand the frustration and feeling as anyone can buy product at a cheaper price IRL. If you know the right growers/people you can even get similar quality but rarely the variety. Having the ability to treat oneself to all different strains is alone worth the extra $ for me.

Back to the topic, I do understand it's expensive and a bummer for those who can't afford the prices here. Many people I've dealt with so far are really cool but still ask for better deals. I wish I could invite them over to smoke for free (minus the thief's and Axe Murders)  :P They could join my pack of friends I lovingly refer to as the "loafers" - what the fuck is one more going to hurt:) but selling lower here is just not worth the trouble.

As a new vendor I thought I would lay out some of the challenges/costs vendors face when trying to  meet your expectations while providing good value. I won't disclose my details but I picked a random scenario to help explain how difficult it can be. Don't beat me up too badly I just did this rather quickly and I'm sure I fucked up and forgot or don't know many things others do. Bored, high, and thought it might be fun to discuss and see some different perspectives - maybe not lol.  Easy on my karma!


Quality small grower - costs for indoor - 4 harvests a year - 10 lbs total - 6x6area - 32 square feet cultivated

Initial capital:$1500

Light fixtures, Mylar, controllers - timers, ph meter, bulbs, fans, exhaust system/filter, humidity control, tubing, duct work, pumps, sheers, rope/wire, containers, area rent for space used (there is always a cost - mortgage/rent on place), curing jars, and other misc. 
 
Consumables:
Electricity, seeds/clones, nutrients, cloning compound, carbon filter replacement, growing medium, bulbs, water, repairs/replacement, misc.

Loss:
Disease/mold, mites, cat attack!  :P other quality issues and misc.

Per harvest cost:
Consumables $300 + capital amortization $200 + electricity $200 + loss $100
$800 cost - 2 lbs produced

Total based on average $400 per lb - price can go down if you can keep this going 2-3 yrs $300 lb

Labor:

Harvesting - 2.5hrs per lb
Manicuring - 4.5hrs per lb
Drying/curing - 1hr per lb
8hr per lb at $50 per hr = $400

Total cost $800 per lb

Regarding my labor costs please remember I did not include growing time care or setup labor. Only harvest and after labor is listed. If $50/hr on some of the things seems high in a non-drug state, ask yourself what would you charge per hour if the consequence was a couple of years in jail lol.

***Greenhouse - only 3 harvests per year, cost of greenhouse build, lights for flowering, cut cost in half or so per lb, labor is the same, but quality/yield can be lower

***Outdoor - varies


Selling it on SR - assuming 1 lb sold per week sold in smaller listings

Labor:

Hours spent on SR - listings, messages, ect: 1hr/day * 7 days/wk = 7 hr per week * $25 hr = $175
Hours spent Weighing, bagging, sealing, washing, packaging, labeling: 2 hrs/day * 5 days/wk = 10 hrs per week * $50 hr = $500
Hours spent driving & delivering or paying someone to do so: 2 hrs/day * 6 days/wk = 12 hrs per week * $50 hr = $600
$800 + $1275

$2075 per lb

Vehicle & cost of driving per week:
Gas & Mileage @ US government mileage expense rate (30miles/day * 6days/wk * $.55/mile) = $99
$2075 + $99

$2174 per lb

Postage based on 7gs per lb orders: +$386 lb
Packing & materials including MBB: +$100 lb
Package sealers, $425 for two, amortized over lifespan, replacement elements, +$15 lb
$2174 + $501

$2675 per lb

Other costs:
SR vendor bond $500 (refundable) $$$ tied up with no interest until you have met the required sales
SR commission on each sale
Bitcoin value changes when cashing out, Bitcoin value after waiting for finalization, lose 4% of your normal payment when using the escrow hedging feature 
Money laundering - costs vary
Risk management - computer/vpn, mailing anonymity, ect. -risk gets a little more subjective because you have to assign probabilities of risk happening,
Lost packages/scammers
$2675 + $500?

Total cost per lb $3175 delivered in small listings to consumers without any profit yet

Note all of these figures above are based on a small producer not the gorillas growers

Bigger the grow the lower your costs to produce
Costs increase if shipping volumes are smaller and decrease if volumes are higher
Costs decrease the longer you can grow at the location using the same equipment
Costs involved with research time and experience to become an above average grower
Quality of product cost differences
No cost deduced above for extra +1 gram for positive feedback/security of no underweight packages - 64@7 vs. 56@8
Top customer service - priceless

Thoughts?
Title: Re: Most Cannabis Vendors Are Doing Their Best
Post by: ratobhale on March 27, 2013, 09:19 pm
I think it is better idea for you to sell in small quantities than the bigger ones. Keep bigger quantity price as it is and concentrate on small quantity selling. where you will make extra bucks and more safer to mail them.