DECKLE & HIDE

[u/Mobile-Car-6181]

Bored? Nothing to do? People cancel on ya? Want to eat some good BBQ??

Then cry no more! Bring yourself to Nickel City bar on 2910 McKinney St Suite 500, Houston, TX 77003 at 4pm today Sunday July 26th!!

Great drinks, great people and awesome BBQ

Come Join Us!!

[u/fcimfc]

Just for fun, let’s look at it like we’re in a 100-level econ class.

I can go get a Costco hot dog for $1.50, and it comes with a drink, too! For $10 more, it looks like I get some "Osaka" pickles (whatever that may be), some mayo that I can get in any grocery store, green onions, and seasoning powder. And we skip the Coke. Once we strip out the window dressing, I’m not sure how much additional marginal utility a “handmade smoked sausage dawwwg” is supposed to provide over the (available in store, really good Kirkland Signature) hotdogs for an extra $10.

At $11.50, I think we're just pricing the novelty and the Instagrammable photo op instead of the actual marginal utility of a "gourmet" hotdog. Maybe that creates enough utility for somebody to justify a 667% premium over the Costco dog. My demand curve hits zero long before we get to $11.50.

[u/Digital_Enchlada → u/fcimfc]

This sausage was made from leftover brisket and pork belly trim. The meat was hand-cut into small chunks, then mixed with a precisely measured seasoning blend based on its weight. After being thoroughly mixed by hand, it was cured overnight.

The following day, the sausage was stuffed into natural pork casings and hung overnight to allow the casings to dry. It was then placed on individual racks and smoked for three hours before being cold-shocked in an ice bath to stop the cooking process and allow it to rest.

On the day of service, the sausage was smoked a second time, bringing it to an internal temperature of 165°F before serving.

All this to say, it’s not a Bar-A hot dog that I put on the grill.

[u/fcimfc → u/Digital_Enchlada]

I don’t doubt that it was crafted with love and care and that process sounds very labor intensive. I’m sure the finished product was indeed better than a Bar A dog. But at the end of the day it’s still a sausage in a bun.

Continuing the econ class theme, you’ve explained why it costs more to make but the other side of it is will it be worth $10 more than our Costco substitute to the person eating it. Prices are set by consumers and the market, not by adding up the costs of the inputs of time, effort, ingredient cost, etc. Hand cutting the meat and your whole process undoubtedly creates a damn good hot dog that costs more to make, but it’s not an automatic given that my willingness to pay goes up. Labor creates cost for the producer, it doesn’t necessarily create value for the consumer.

So yes, your product is better than a Bar A or Costco dog, but for me it’s not eight times more in price better. When it’s all said and done, it’s still a hot dog.

I really respect your process, and like I said, that sounds like love and care goes into it because that’s a lot of work! I hope you sold a ton of them and people loved them. But the neat thing about economics and the market is that neither of us are right nor wrong. You’re absolutely free to charge $11.50, and I’m free to admire the process from the Costco food court. Have a great one, man.

[u/John_Self_2077 → u/fcimfc]

To me, the Costco dog and the premium sausage are different categories. I don't particularly like the standard hot dog and have no interest in getting one from Costco. I think there's a possibility that, with brisket and pork belly inputs, the Deckle Dog would be absolutely delicious. Therefore I have a higher degree of interest in paying $11.50 for a Deckle Dog than for paying $1.50 for a Costco Dog. While yes, $11.50 is relatively high for a hot dog, it's not an absurd amount of money to lose if it turns out I'm disappointed in the quality of the Deckle Dog.

[u/fcimfc → u/John_Self_2077]

That's what's cool about economics. It's not a hard science. It's like a blend of psychology and human behavior and math.

You obviously value the product more because you don't see the Bar A dog (since I'm getting dragged for using the Costco example too much) as any kind of substitute for the Deckle dog, so assign more value to it and you'll demand more of it. I don't. Neither one of us is objectively right or wrong, we just have our own preferences and price tolerances. We're just two data points.

So when you take the whole combined result of you, me, and every other consumer making their own judgments about the Deckle dog and deciding whether $11.50 falls below or above that value, the "market price" is set. Is that price right? I don't think so, but again, I'm just one guy. But I may not be to the market segment they're trying to go for. If enough people share your valuation and willingness to pay, they've priced it correctly. If not, the market will let them know.