Today, I’m giving you a dose of tough love.
You probably need to hear this–so I’m going to say it. And, you’ll get a chance to see my three lab-mixes at the end.
Watch the video below to find out what I’m talking about.
I’m bummed out about how this background looked on video. It’s MUCH more sparkly in person, so just imagine a lot more sparkles. But, my necklace looks super sparkly, doesn’t it? It’s from Elegant Girl, if you’re wondering.
Now, back to the topic of pricing. You want to have a successful business, right? Are you pricing your products to turn a profit? Are you paying yourself more than minimum wage? {Big Hint: You should be!} Do you have to reinvest all of the money you make to buy new materials or are you actually paying yourself? You need to take a close look at how you’re pricing your products. Don’t undervalue yourself.
This is something I really struggle with! I sell a service so I find it difficult to really value my service and price it appropriately.. I often feel bad for clients on a budget and decrease my prices to suit them but I know this is a bad habit! I will take your advice and experiment a little….
Hey Emma! Can you create a service for those clients on a budget? That way you still have something that those clients can benefit from but you’re not undervaluing your services? That’s one of the reasons that I put together my Marketing for Creatives guide.
And, something that helps me is this: If someone REALLY wants your products or services, they’ll find the money. They’ll figure it out. Ever remember a time being broke and really wanting something and figuring out a way to get it? I do. When my husband and I were dating long distance I was broke and in college, but I always managed to pull together enough money to go visit him.
This is great April & so true! I realized that I was underselling my products about 4-5 months ago in my shop & I was really struggling with the idea of using a pricing formula that I’d found because it was going to practically double what I was already charging! After lots of encouragement from other entrepreneur pals, I decided to go for it. I let everyone know I was upping my prices on my blog, in my shop announcement, & my email newsletter & I let them know why…BECAUSE I WASN’T MAKING MONEY!!
Anyway, I did see a drop off in sales for that first month. The next month was a different story though. I had less sales, but I made more money. Then the next month, more sales & more money & it just continues to increase.
So now I see that it was worth it. I feel like my products are priced to reflect their value. I can get wholesale orders & make money off them. I can have sales & participate in giveaways. I just have so much more freedom & there’s less financial strain.
So thanks for the video today. It doesn’t necessarily apply to me at the moment, but I hope my story can be encouraging to others who really need to take this big step & start making the money they should!
Thank you for sharing that Meagan! That’s really encouraging for creatives who are aren’t pricing their products for success. It’s a big step for a lot of creative entrepreneurs–but it’s easier when you know others have gone through the process and are doing better for it.
preach it sister! know your target market!! and don’t be afraid. do not undervalue your work. no one can do what YOU do!
and i love your dogs! we have 2 huge goldens…love my girls!
xoxo
That’s right!
Dogs are the best 🙂
Pricing is a constant struggle for me, especially now that I have been placed on a 30-day furlough (due to budget restraints) at my day job, and I NEED to convert some of my inventory into cash–not in a month or two, but in a week or two.
My seasonal tax job revs up January-April, then I can afford to experiment with price increases, and weather a dead month like Meagan (comment above) experienced after raising her prices.
Thanks for the post.
Hey LeAnn. We have to do what we have to do, right? I’m glad you’ll be able to experiment with your prices soon.
I don’t know if I am the only one but I haven’t been able to see any of your videos. It just has a big white space where the video should be. 🙁
I haven’t gotten that from anyone else! I don’t know why that would be happening. Can you try refreshing the page and see if that does anything? I got lots of comments on my last video so I know other people have been watching them–but this frets me. Hmmm….
I’ve been struggling with pricing issues, too. I sell mostly at Craft shows and wine festivals, and this time of year at Holiday bazaars. If I’m not seeing adequate sales, I let people know that “today I’m having a sale”! I either offer to deduct $5 or if buying multiples, I’ll take off a tad more… It seems to be working. People always like to think they are getting a bargain.
So true Audrey! People loooooooooooooooooove bargains. Amazon is a great example of how getting a “bargain” works really well. That’s why it’s important to up prices in order to be able to offer those bargains.
Thank you April. I’ve been wondering this week if I should increase my prices & you gave me the encouragement I need to do it. I sell accessories for tweens & teens & I agree with you that I don’t think they will notice a small increase.
thanks again!
Yay! Increase those prices!
Update- I increased my prices on my Esty shop & within 20 minutes I had a sale. Yay! I guess they really didn’t notice the increase.
Yay! Yay! Yay! Thanks for sharing your update. That’s great to hear 🙂
Thank you April! It’s funny, I was just thinking about all of this this morning and had set aside the morning to reconsider my pricing. You rock! Thank you!
Thanks Sandra! You rock, too! Now, go increase those prices 🙂
Hi April,
Your video has come in really timely for me. Although i am in no creative business line and have no products to price, but i have my service to price. I do give tuition and very often, i try to lower my price because i want to appeal to a larger audience and I’m afraid that parents would think that i’m too expensive and won’t want to hire me.
However, your video today has really made me rethink about my whole strategy. You mentioned about not worrying as long as we market ourselves to the right audience. How could i ever forget that when i’m a diploma holder of marketing??
So here, i want to thank you so much for reminding me to target myself to the right audience!1
Woohoo! You’re welcome June. We often forget things that we already know, right? I’ve definitely been guilty of this myself. I’m so glad this video was helpful.
Yes yes yes! I am having such a rough time with pricing my paintings! I cut them in half from the original prices, but now the thought of giving them away for that amount feels off to me. I’m worried that they won’t sell. I made sure that I priced to give myself a decent hourly wage for making them, but what about the time I spend marketing, photographing, blogging about them, brainstorming, etc? I don’t know if I should factor that into the pricing and make my buyers pay me for taking walks with my sketchbook to get ideas. I’m so confused. I work 25 hours a week at a normal job, but I probably spend at least 40 hours a week on my business whether it’s painting, doing computer stuff and networking, sketching ideas, etc, yet the only time I’ve paid myself for (if my work sells) is the time I spend painting. I don’t know what to do, but thank you so much for this video. I’ve been thinking about raising prices 50%, but I’m scared they won’t sell. Also, I’ve heard that it’s improper for an artist to ever lower prices because it’s rude to buyers who previously paid full-price, it looks tacky, yadda yadda. What do you think?
First, your paintings are beautiful. Now, on to the topic of pricing…
You should DEFINITELY factor in the time you spend marketing, photographing, blogging, and brainstorming! Definitely! And, you should always feel good about the price that you set for your original. You put your heart and soul into your paintings, and you’ll feel good about selling them when you value them at what they’re worth.
Do you only sell on Etsy? I’ve talked to a lot of artists who have a difficult time selling their original art on Etsy. Have you thought about offering prints for some of your paintings on Etsy? Is that something you would want to do? Some artists offer prints to have another customer base, but some artists don’t like offering prints.
I don’t think it’s rude or tacky to lower your prices if you feel like you need to in the future. It’s the same as lowering prices or offering sales on other handmade items. I don’t get offended when I see a shop offering a sale when I’ve purchased something full price. That’s how selling works.
I’m always torn. I’ve raised my prices so I can actually imagine I’m making a profit- my bank account does not look like it. Sales are slower than last year and I’m not sure if it is my pricing or the huge selection of jewelry available in the marketplace and the economy.
Hey Kila. From what I’ve seen, the only ways that price can truly affect your sales is when you undervalue your items and when you completely overvalue your items. For instance, if you’re asking $500 for a print, you’re probably going to be hard pressed to sell it. But, if your prices are based on a formula that makes sense for your business and gives you a profit, price is often not the reason behind decrease in sales. There are so many other things that can affect sales such as: product photos, marketing, uniqueness of products, website design and clarity, revenue streams, where you’re selling your products etc. I could go on and on.
I have had a real problem with pricing. I knit dolls that take 15-20 hours of knitting to make, not to mention the time spent designing them and whatnot. I really didn’t feel comfortable paying myself for that time, because I felt like they wouldn’t possibly sell for that much. I thought, “I could never pay that price. my friends could never pay that price.” well, the truth is, my friends don’t want to pay ANY price for them. they think they’re neat and all, but they’re not my target market. I’ve upped my prices recently, but I’m still having issues identifying who my customers will actually be.
This is a difficult one. If you don’t know who your customers are, how do you sell to them? You have to write your product descriptions for your target market and market your products to your target market. The first thing I would do is start talking to as many people as I can who I think might be in my target market and find out if what I’m selling is something they would buy. I would get their feedback and make adjustments. But, if you don’t pay yourself and you’re working for pennies on the dollar, how will you have a successful business? If you’re doing it as a hobby, it’s one thing. If you want this to be a successful business, it’s quite another.
Thank you April, it is so right on time for me. I have been selling on Etsy since march, and my friends and, especially husband trying to convince me to increase prices …so last month slowly I have been doing it, just a bit here and there, and I must say that I sell a bit less as well, but I feel way better about my work . And at the end of the month I have even more money and more sleep :). But it is so true, knowing that there are super stores like Target , Wal-mart, that have ridiculous low prices makes me feel like no one will bother with my store. I can see it in my community all the time, but I’m so thankful that there are some people who actually understand and value handmade goods, and independent businesses.
The biggest takeaway here is that there is a growing group of people who truly value handmade and those people are your “right” people. The people who never buy handmade and do most of their shopping at Wal-Mart or Target aren’t the people to try to sell to.
And, more money and more sleep is great!
Wow, this is so timely for me. I believe in listening to what the world is trying to tell me and today the message is coming through you. Pricing has always been a struggle for me and I’m often told my prices are low so I know I need to raise them. I would like to be able to sell wholesale and I know my prices are way too low for that. Do you have any suggestions or formulas for deciding on what the price should be of my work. I’m also thinking of selling hand made jewelry components and was wondering if they are prices the same way or not. Thanks for the push in the right direction.
First, you have to know how much it costs in materials to make each product. Then, you have to know how much time it takes you to make each product and how much you’re paying yourself per hour. When add those two things and double it, that’s your baseline–but you shouldn’t stop there. You still have to think about how much time you spend on marketing, photographing, uploading products, etc. and account for that. Plus, you want to make a profit on top of that. You have to decide what that means for you. So,
Materials + Hourly Wage x How Many Hours = ______ x 2
Extra time for all the other business stuff you do + profit {fun money, money to reinvest in your business, etc.} = __________
Add those two numbers together.
Hi April, as always you have hit the “marketing” nail on the head. As an small business owner and entrepreneur, finding the ‘price-point’ for the artisan (in my case custom design jewellery and creations) is challenging!
In my opinion 1)we don’t want to to compete with the Chinese markets of mass production and thereby lower our the value of our products, if the items are priced too low, then customers are going to think your items are not good value for money — there is a fine line between offering an affordable product (even during these recessionary times)and what the market will bare;
secondly, we (artisans) need to raise the value of what we do co-operatively with other artisans.
I have seen this at Etsy where items are valued too low. I totally agree with you! There is no point in selling something for $25.00 if you are only covering your supplies!. Calculate your hourly rate into the price point.
In setting out my price point, I add in the (estimated shipping costs).
It is important to network, and promote each other. Think locally, and even sell your items at conventions and find that perfect niche! Think creatively, outside the box, my motto is ‘think like a customer” and remember to build trust offering quality and assurance.
Thank you for your great advice, Vanessa!
Hey Vanessa. Thanks for adding to the conversation. This is definitely a challenging topic. Thanks for adding the piece about adding in the shipping cost–if that’s not separate, you should definitely add that in.
I completely agree that promoting other creatives is important as well as selling your items in different ways–wholesale in boutiques and at shows as well as online.
Just love your work. . .
Thanks!
Hi April. I did raise my prices over this last spring when I was selling a dress so fast and getting resentful about how little I was making and the pressure to get it to them fast! I was making my clothing from mostly recycled/upcycled/vintage stuff, but then it got harder and harder to find the goods–I think more people are getting crafty! So one day I panicked and started buying new fabric. Then I had to raise prices again to cover that expense. I think my number of sales were down this holiday season compared to last. Did I make a mistake in raising them? One other thing is that etsy changed the SEO stuff and i had a hard time figuring out how to get mine seen for a couple months. I would appreciate any wisdom! 🙂
Hey Kathi,
If you mainly sell on Etsy and your sales decreased this holiday season as opposed to last holiday season, then it could be related to learning about the SEO stuff. Plus, I think it’s incredibly important to bring your own customers into your Etsy shop and not rely solely on their traffic. If you need to raise your prices to make a profit, then you’re not making a mistake by raising them. If you’re not turning a profit, what’s the point? Keep at it. I checked out your shop and love your stuff–so cute!
Hi April,
Wonderful advice!
I started raising my prices a little while back and have noticed a trend toward more sales. I sell vintage accessories which I spend a lot of time finding, researching, and sometimes cleaning. I was not adding that time into my pricing. And even though I loved what I was doing, my bank balance was saying, “Get a real job.” So to avoid that, I had to get serious about my pricing. I’m so glad I did! Now it’s starting to turn a profit. Yeah! I’m valuing my own time, and others are valuing what I am offering.
Your post is so encouraging. Thanks!
Karen
That’s fantastic Karen! Thank you so much for sharing. It’s so encouraging to hear how other people raising their prices has worked out for them!
This is a very interesting post. I recently realized that most people really don’t value handmade goods. Or they don’t understand the time that goes into making them. I often struggle with my prices.
I recently had a potential customer on Etsy ask me if I could lower the price of my custom watercolor portraits. They are already offered at a super-low price: $200! And I constantly worry if that undervalues my talent as an artist to begin with. I offered this customer a portrait for $185 and she still said it was too high. I just don’t understand. Even if someone wanted a photography session with a professional photographer, it would be more expensive than that most likely. And then they just get a print, not a custom piece of artwork.
But I feel like I’m up against competition price-wise, especially on Etsy. I stopped selling wool diaper covers on Etsy because there were other people selling them for $7 a pop. How are these people paying themselves? If they undervalue their own product, it makes it hard for me to price my product appropriately.
Finally, I recently ran a survey asking people what they would pay for a handmade cloth quiet book. Most people said $3-$5 a page. Seriously??!! You pay more than that for a latte! It is discouraging that most people want to pay Walmart prices for handmade goods. How do you raise prices in a marketplace surrounded by price gougers?
Hey Gaby,
First, I have to say that I don’t agree that most people don’t value handmade goods. There are WAY too many thriving handmade businesses for this to be true. There are WAY too many thriving artists for this to be true.
There are definitely people who don’t value handmade–but those people aren’t in your target market. Those aren’t the people who you should be selling to, because they aren’t going to want to pay the price that you need to charge.
As far as competition, there’s a lot of it on Etsy. But, you’ll still see thriving businesses on Etsy that are in saturated markets. In order to do well on Etsy, you have to do many things including bringing in your own traffic, taking amazing product photos, writing product descriptions that help potential customers understand why your product is unique, and on and on. There are always going to be sellers on Etsy who do this for more of a hobby than a business and they don’t care as much about making a profit. But, if your shop is unique and you bring in your own traffic, that won’t affect you as much.
And, I’ve talked to a lot of sellers who have been in your position where someone contacts them asking for something at a lower price. If someone does that, she’s not in your target market. If someone really wants what your selling, she’ll pay the price that you’re asking.
Hi April,
I just discovered your blog and newsletter – being a brand new Etsy shop owner, I have a lot to learn, but your advice helps tremendously and makes me feel like I can do this! Your advice on pricing is great! It’s good to be reminded of the value of our time and the work to make our creations come to life. I started out with a price in mind and then got nervous, thinking it would be ”too much” so then I lowered it and then raised it again to a point in the middle. Still not sure I’ve got it right. Your advice and info really helps! Thanks! Oh, and your dogs are adorable. I am a dog owner now for the first time, and who knew it could be so much fun!
Thanks again for great advice, Bonnie
Yay! I’m so glad you found my blog 🙂
My best advice would be to have a formula that you use for pricing–you want to make sure that you’re covering the cost of your materials, packaging, and shipping and paying yourself.
Dogs are super fun! What type of dog do you have?
Hi April ,
Thank you for this video . I struggled with this issue the last time around. Im still wondering what to do about it now . With this being my 2nd try and being new- again, I really don’t know if Im pricing my paintings low. If I price low, i feel like Im not respecting my own work. If I price high, I feel I’ll scare away people who view me as a newbie !
These are original paintings and I try to price them according to size and the time I spent on them . But I still don’t know if my prices aren’t getting me more eyes. Ah, its such a learning curve.
Are you new at painting? Or, just new at selling your paintings? It’s important to take into account your level of experience when pricing–but if you’re new at selling your paintings, that shouldn’t affect your prices. It’s definitely a learning curve. It gets easier as you go along.
Hey April, Im not new to painting. Ive been doing it for over 2 decades. Yes, new to selling painting. I guess it is a matter to getting my work in front of buyers that is more of a challenge than pricing is. Sales are picking up locally . So, like you say, it will get more easy with experience.
That’s what I thought! I was going to be soooooooooooooooo impressed if you were new to painting because your paintings are so incredibly beautiful. So, here’s my advice: Don’t act like a newbie. Act like a professional, because you are a professional. You’re just selling your paintings in a new way. Price your paintings like a professional and don’t apologize for them. You’ve been doing this for years and years–and that shows!
Thanks april. I appreciate the kind words and the kick in the pants ! I absolutely believe Im doing it right and am providing my people the best that I can deliver for the right price .
Hi April, This has always been a hard one for me. I make childrens clothing and sell on facebook and through my site. I decided at the beginning of the year I was going to raise my prices by about $5 per outfit. I marketed my clothes the same way. But my sales just about stopped. I was lucky to sell one outfit per week. I only sold a few pieces from my winter range and now have loads of fabric left over and at the end of winter I had to put all my stock in a big sale.
I put it down to the customers didn’t want to buy a lot of winter clothes as we don’t have a huge winter in Australia. So I made my Spring Summer range and put my prices up $5 and the same thing happened. I had fabric in stock ready for orders and I hardly sold anything.
I believe that I have a great product and it’s made well but I’m finding that people don’t really care about quality ….. they think if it’s cheap they’ll buy it and put up with the bad quality.
Now I could say that I’m selling to the wrong people too so I would love for people to pay for the quality that I produce.
So I’m still trying to work with pricing as it’s not a friend of mine!!!
Hey Ann,
That stinks! I wish I had a secret answer for you, but there are so many factors that can affect sales. If you’re selling to the right people, $5 should not matter when you’re selling clothing. That’s such a small increase that I would guess that other factors are coming into play.
Hi April,
I do struggle with pricing, I put my prices where I think they should be then go looking in the Category on Etsy and see all these people with lower prices. When I get no hits I change them back to be inline with theirs. So I know I have more intricate designs but if I can’t sell, then what?
I also lower prices when asked to, just to make a sale.
Love your dogs, so cute.
I hear ya–you want to be able to sell. But, if you don’t make any money, what’s the point? You have to sell to the right people and bring in your own traffic on Etsy so you’re not competing on price.
April,
I always make Money just not what it’s worth.
I have not figured out how that system works yet on Etsy. I change all my titles and tags, almost weekly to see if others will work. Some work for a day or two then nothing again???? That is I get viewers to come to my Store for a day or two then nothing. Still working on it.
Gotcha–then you’re better off then some creative entrepreneurs who don’t! But, is it worth it if you can’t make what it’s worth? If it is, then fantastic. Most of the time I talk to creative entrepreneurs who get really frustrated when they’re not making what it’s worth which makes sense.
You definitely have to figure out the Etsy system to do well on Etsy and SEO is a big part of that.
I am still experimenting with my prices. Its hard, since I have so much material that I was given, or it was cheap, I sort of forget to include materials in pricing. But I need to remember that it took TIME & GAS to go scour thrift stores for the super awesome cheap thing that I make fabulous.
I did just raise my shipping prices. That needed to happen, and might need to happen even more. I’m still just using USPS and I might experiment with FedEx or UPS. I think Etsy has a deal with FedEx.
Did anything change when you raised your shipping prices? I think other people would be interested.
You definitely have to remember that it takes time and gas to find those amazing materials.
Thanks April!
I’ve been slowly increasing my prices the past few weeks, esp. now that I feel that my sewing skills have improved and so has my presentation and packaging. My bf has been encouraging and keeps telling me to raise my prices, esp. when I’m busy making custom orders. This past week though, I’ve been told twice that my prices were “reasonable”.
Oooh! Gotta go! Flight is taking off! Going to Chicago & Indianapolis to visit my besties and their families. Will have to come back to this post and go through the wonderful comments (thanks Meagan for your story!).
Hey Carrie. Are you using a specific formula for your prices? Are you paying yourself?
I hope you have a great trip and safe flight!
April, over this year I have become a big fan of yours. You are bright, articulate, and exhibit warmth and humor in your videos and in your blog posts. Your advice about pricing is spot on, and I have been told repeatedly that I need to raise my prices because the quality of the clothing we make for infants and toddlers is of the caliber to be found in very upscale specialty stores and boutiques. We actually think our customer is anyone looking for a special gift for a baby shower, a newborn gift, a baptismal gift, a birthday or holiday gift in sizes newborn to toddler 3. Typically it is going to be best friends, employers, grandparents, and other relatives who want to buy something potentially to be handed down in a family for other generations. Any suggestions as to how to encircle such a target market. I need to do that before I raise my prices.
Thank you sooooooooo much Marian! That’s nice to hear.
I would think about where your target market shops for such items and try to get your items there. So, if you think your target market would shop for these items in upscale boutiques, that’s where I’d start. I’d up my prices in order to be able to set wholesale prices that will turn a profit and then contact upscale boutiques about carrying my products.
Also, where would these people look for gift ideas? Are there blogs, websites, or magazines they would look for gift ideas? If so, start targeting them for marketing opportunities. Get your items featured in the gift guides, on those blogs and websites, and in those magazines.