One the the an initial comments us heard once we opened up was, “$4 because that a bagel through cream cheese?!” Yes, we are conscious that our prices are greater than various other bagel shops. (I hesitate to say “competition” – ours comparison set doesn’t actually include any kind of bagel shops. However that’s a conversation for an additional day.) I’m right here today to do a situation for our prices.

When I an initial dreamed up the idea for Rebelle, my husband Darcy and also I visited countless bagel shops in PVD and beyond to understand the bagel market. A bagel through cream cheese was around $2.50-3 but, in all honesty, the didn’t buy us a bagel we appreciated eating. The seasonings in the cream cheese were barely there and also the bagels themselves taste bland and also mass-produced. Ns knew we might give girlfriend a much better quality experience.

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Quality is the product that a trade-off between what civilization are ready to pay for a product/experience, the expense of developing it, and the business imperative to rotate a profit. (Come top top guys, we all recognize why we’re here.) If people are just willing to salary $2.50 for a bagel v cream cheese, the product is designed v that constraint in mind. As far as ns know, nobody has actually cracked the seed on how to perform high quality/low price/killer profits/everyone is happy. Ns think anyone does will be a very, an extremely wealthy person creating a most value for our society. Knowing what ns know about making and also selling bagels, I’d guess that a $2.50 bagel v cream cheese requires some mix of minimum wage/free labor, machines instead of hands, cheap bleached flour, and also cream cheese with more stabilizers and emulsifiers than organic dairy fat. For now, I remain confused as to how other businesses do those short prices work. Mine guess is miscellaneous or who suffers in the process.

So exactly how did we land on our prices? We identified our ingredient costs, factored in labor, and also built a healthy and balanced cushion for overhead, profit, and the occasional slow day (we have actually those). We likewise studied prices at other businesses, analyzed our operations to number out where economies of scale start and also end v respect to labor, and decided to take lower margins on part items and also make it increase in various other items. (Our lox sandwich is the ideal deal on our menu, dollar because that dollar, as soon as you aspect in every the labor and expensive ingredients.)

By far, the most challenging customer feedback is on price. Some civilization politely tell us they’d come in more often if prices were lower. Others tell united state we’re “outrageously expensive”, “ridiculous”, a “bagel monopoly” (that one is my favorite and I’m taking it together a compliment!) and also that it’s unfair they can not afford come come right here every day. I’d be lying if I stated I have a good response because that this type of feedback. I have made decision we need to be OK through hearing this feedback and also not really having a satisfying an answer for our customers, because our business can’t sustain lower prices and also exist in its existing form. (I am also going to it is in candid and also say the world who expect us to lower our price so they have the right to afford the daily luxury of having other world make their food space wildly the end of touch v reality. Feel free to disagree through me. I’m OK dying on this sword.)


I’m one Excel freak, for this reason of food I developed a version to illustrate the influence of lowering prices (see graph). The orange line is representative of our existing labor & food costs, and also you deserve to see by the means it curves upward that the better the price cut we want to implement, the greater the volume we need to sell to offset that. To alleviate prices by 10%, we’d require to boost our total revenue by 50% simply to match our existing profits. That method we have to make and sell 50% more bagels to end up ideal where we room today. The space gets an ext extreme as the price cut increases come 20%, and if us lowered price by 30%, our business would be completely unprofitable no matter how countless bagels we sell. You can’t volume your way out the zero margin. Thinking past the financials, operationally we can’t take care of much an ext volume than we execute today. We have actually a minimal production capacity and on but on the weekend we move through client as quickly as us humanly can. A price drop would successfully lose united state money.

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Some businesses deal with this push to lower prices by cutting food prices (lower high quality or remove waste) or job (reduce earnings or job-related with a smaller team). Also if we diminished our food prices by 10% and additionally reduced ours labor prices by 10% we’d still need a 20% volume boost to sustain a 10% price reduced (gray heat in graph). I shudder in ~ the assumed of paying minimum wage and also buying cheap cream cheese complete of stabilizers. At that point, those the point?

Ultimately, you as consumers have actually the last say on our prices as soon as you select to visit us. Us love that! ns am thankful every day the you vote “yes” v your dollar and support what us do. The price you pay afford united state the possibility to pay our team life wages, to support regional coffee roasters and also kombucha brewers and kraut & kimchi makers and also even flour millers (!), and also to sell you sweet small details favor a free daily copy that local and also national newspapers and actual plates to eat turn off of. Ns think that’s worth paying a little bit more.

(And allow me leave you with some food for thought: Jamie Coelho, by much my favorite local food writer and friend that Rebelle, go a terrific write-up because that RI Monthly ~ above the true price of dining out. i hope you will uncover it enlightening, as I did!)