Tuesday, November 08, 2011

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.
Designed by Jackie Ayr