I have another meeting with a hotel on Monday. This one is to discuss a pilot with some of my non-plastic toiletries with all natural ingredients. When I originally did the numbers, I thought that packaging cost was less than the ingredients inside of it. Now I know better.
I have actual bids now with exchange rates, transportation costs, duties, etc. It’s clear that the packaging will be just as expensive as the natural ingredients going into it, especially on smaller volumes. I would need to win an actual hotel contract with guaranteed volumes to be able to achieve any profit even if I sell it at twice or more of their current buying price.
I suppose the good thing is that I don’t think that’s an unreasonable suggestion for them to charge each guest an extra $2 per night to offset the non-plastic toiletry option. In discussion with hotels, some of them seem to agree with my theory.
I also have found a local manufacturing partner. They too would need to scale up to service a contract. Fortunately, they are a young company which makes it more doable than with one more experienced but unwilling to work on margins or try new ideas.
Everyone I tried to outsource the work to so far said that it was impossible to service the hotel industry from Australia with all natural ingredients at a reasonable price. In fact, one business said they could only do it for $2.50 an unit to me which is ridiculous when the average price online seems to be about 32 cents each to hotels now.
I believe it can be done, but I need to pretty much build out the supply chain myself and offer something special that can’t be easily copied by bigger players.
So, here I go trying something new with non-plastic hotel toiletries and all natural ingredients that people in the industry are saying is impossible to do for a reasonable price. If I’m wrong, I could either fail at the sales call or fail in the implementation. If I’m right, there will be a lot less virgin plastic in hotels in Canberra and elsewhere in the future.
It’s worth the effort to know.