Clams to Cash: How to Make and Sell Giant Clam Shell ... - eXtension

Clams to Cash: How to Make and Sell Giant Clam Shell ProductsPage 18Figure 18.A typical saladset could consistof a large shellfor the mainserving bowl andseveral smallershells forindividualserving dishes.Pricing ConsiderationsIndividual T. derasa serving bowls ranging from 25 to 30 centimeters in size sold fora retail price of $6.00 each at the MMDC gift shop, but identical items sold for a retail priceof $30 each in Honolulu shops! Although this may appear to be a grand export opportunity,bear in mind that upscale retail shops in high-rent, high-traffic areas such as Waikiki or AlaMoana Center often use a “triple key” pricing system, a high markup form of “keystoning” inwhich the retail price represents a tripling of the store’s landed cost. Therefore, for the sameitem that retails in Waikiki for $30, an island-based producer could expect to receive about$10 less shipping costs, but only if he were dealing directly with the retailer.In most cases, though, producers in remote areas will find dealing directly withforeign retailers to be impractical because of distance and communications constraints. Manyisland farmers don’t have frequent international mobility or the initial capital needed todevelop offshore marketing relationships. More typically, they deal with wholesalers ordistributors who come to the farm gate to purchase shells. If the island-based farmer is sellingclam shells to a wholesaler or distributor, the farmer might expect to receive just $3 perspecimen for something that will retail for 10 times that amount in a distant city in Japan orthe United States. In the case of heavy or bulky items like giant clam shells, shipping andhandling costs must be researched very carefully because they are significant factors indetermining prices.June 1996