Way back in history, from when I was in grade school through my first few years of high school. I raised and sold miniature pumpkins. My grandpa had a farm, and he was the local pumpkin king, raising giant pumpkins (one year he almost broke the world record – but someone grew a bigger one than him that same year). Every year my parents would help my sister and I raise a field full of miniature pumpkins and decorative gourds, my parents would raise jack-o-lanterns, and my grandpa would raise the giants. The whole thing taught me a lot about hard work, business, presentation, marketing and a lot of other things – but those are all for another discussion.
What I want to talk here is how I learned how added value works. In particular, in regards to googly-eyes, stick-on eyebrows and funny hats.
The pumpkins we sold went for 35 cents a piece, or 3 for a dollar. Raising them was one thing, then you had to pick them, wash them, display them, etc. – which was a lot of work for 35 cents each. Not the greatest return on investment (I’m pretty sure I was working below minimum wage), but still I earned enough money selling these things to pay for a good chunk of my college – and to have some spending money as a kid as well.
The real money, however, was in the decorated pumpkins. As we went through our inventory, we’d set aside some of the best-looking specimens for their own special treatment. These top-quality pumpkins weren’t sold just as individuals for 35 cents, but instead they went through a process where my parents, sister and I would hand-decorate the pumpkins with various bits of craft materials. Add a few googly eyes, draw on a mouth and stick on a witch’s hat, and suddenly we were able to sell them for more like $3-5 a piece. Yes, there was extra work involved, and yes there was cost of materials – but the return on investment increased greatly on these when compared to their naked brethren.
I didn’t really realize it at first, but what I was learning here was that while raw materials have value, you can add extra value by taking your skills and combining those materials together to make something greater than the whole – and charge accordingly. People could have decorated pumpkins themselves, and I’m sure a lot of people did – but for those who wanted these cute little bits of harvest fun without doing the work, they were willing to pay accordingly.
The other lesson I learned is that people were much more willing to pay and buy these when they were told that my sister or I did the work. You could chalk it up to some sick desire to have souvenirs of child labor, but I’m pretty sure that the value came in because of the perception that they were even cuter because they were made by kids.
The moral of the story is this: No matter what you’re offering, you can always add extra value through your own skills and expertise. Even if it’s just googly eyes and silly hats.
Also, teach your kids about business. Even just a rummage sale or lemonade stand. They’ll be happy to get a few extra bucks, and they’ll be learning a lot while they do it (even if they don’t realize it at the time).