Let's talk about pricing

{image via here}


Yesterday, I took part in a GroopDealz deal and it didn't go over too well....


I am not sure if it was my product, the cost, or the mood of their customers.  Either way, it was a good experience and I plan on trying it again, but with a different strategy.


The headbands I chose to discount are super cute and the materials are very inexpensive.  The down side is that they take more time to make than some of my other products.


I was asked to go lower than my $9 price but I need to make a profit, so I kept it at $9.  Also, there was a comment made by a potential customer that "they are not worth $9."  


I am not offended by this comment - everyone has their own opinions and people choose to spend their money in different ways.  


What irritates me is that SO many in the handmade community devalue their products.  They price them just to cover their costs + a little more....thinking this is a positive selling strategy.  And in turn, they are breeding the idea that handmade products are not worthy of a higher price tag.






We are addicted to cheap goods and a handmade business owner cannot compete on price.


We all know that you can buy a flower headband at a big-box store for $5 or less.  If you want to spend less than $5 go buy one at a big-box store.  If you want something handmade, it going to cost a little more.


Why does it cost more? 


Because I pay myself a living wage.  


The people that manufacture the items at big-box stores are not always paid a living wage.  Also, these stores are able to keep their prices low because of the sheer volume of products they sell.


When I price my products, I consider materials, shipping materials, website fees, how long it takes me to make the product, how long I spend photographing, editing, and promoting the product, marketing costs, and a profit.


I also sell wholesale, so my wholesale price needs to be about half of my retail price and I still need to cover all of the above + make a profit.


{image via here}


If you own a handmade business and are not doing all of these things, you are selling yourself and your company short.  


If you just want to make a little extra money here and there and don't mind selling your products for far less than they are worth, that's fine, it is your choice.  But those of you who are trying to make a living need to make sure your products are priced to reflect all that went into each design.


People who buy handmade don't buy because it is the cheapest available.  


They buy handmade because they want to support local or small businesses, they like how each item is unique, they like the story of the artisan making the items...and so much more.


Handmade products cannot and never will be able to compete on price with a big-box store.  But they can blow these stores out of the water in almost every other way.


Value yourself and your products.  The right customer will pay what the product is worth.

10 comments:

  1. Amen sister! People need to be reminded of this... Buyers AND sellers! I just love you and your blog and your pretty products :)

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    1. thanks so much ashley! you are too kind :).

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  2. This was a very simple way to explain to shop owner how to price their items. I have an Etsy shop and pricing can be difficult when you're competing with other shops that undercut your price. Lower prices don't mean a quality product. Thanks for sharing your formula.

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  3. Thank you for the great motivation! It is unfortunate that so many of us don't know how to price their work. We end up hurting not only ourselves, but the rest of the creative community. I am revising my pricing now using the formula!

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  4. You make some very valid points. I don't currently sell handmade products but have in the past. I may venture into this market again in the future so I thank you for sharing your formula. One question: How much do you pay yourself for your time?

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    1. Thanks tamdom! In order to pay yourself for your time, choose an hourly wage that fits your needs. You might have to sacrifice and pay yourself a few dollars less an hour than you would like in order to make ends meet when you are starting out. EVeryone has different financial needs so $9 an hour might be good for some while $20 an hour is necessary for others. I calculate in a modest amount of $15/hr wages when pricing my designs.

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  5. Great post and I agree with completely about charging enough for handmade products. If you don't value what you make, no one else will. In the two years I've been selling on Etsy, I've gradually increased my prices - they're now double what they were in the beginning.

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    1. I agree with increasing prices slowly. I do it by demand, and people love the product, so the price doesn't matter all that much.

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  6. Good to know- I was always pricing my items with the average price on Etsy. Some seem like they are giving away their items and some prices are extremely high.

    I think I'll have to increase my prices slowly, like "The Babysitter"

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  7. I just found your blog and I love it. I just lost my job and thinking about going full time with my handmades. (Scary). The formula was great, thanks

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thank you so much for your comment! i read and enjoy each and every one :).

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