Monday, November 1, 2010

Do You Charge Enough?

So I read this awesome article by Danielle on Etsy. She talks about how to reevaluate your pricing for the holidays. What I gleaned from her is that first you should take your item cost meaning the price you paid for the supplies to make your item, then you should look on the internet to see what a skilled labor would make and charge yourself that price by the hours it took you to make the product x that by 2 and that is your wholesale price x by 2 again and that is your retail price.

People are willing to pay more for a handmade piece direct from the hands of the artist and not made in a factory.  Another great factoid- if you put items in your etsy shoppe too low to begin with you will have no room to wiggle if someone wants a wholesale price or what if someone wants to buy in bulk?   You know they would want a discount of some sort and where will your leeway be?  How about when the season is over?  Do you really want to pack up all those dolls and store them?  You want to be able to give yourself enough leeway so you can discount them 30-50% off.  Now don't get it wrong you still want to make a profit right and you have to have money for emergencies like recently I had to buy a new sewing machine because my old one broke and I had to get it repaired and had tons of orders to make and no machine so don't sell yourself short.
So how do you compete?
Make sure you tell your customers how you made the item, what was involved, tell the story behind the process.  Let them know what makes it unique and a convo piece.
Last but not least and this one I am guilty of, do not price items just to what you can afford.  Many times people will put prices on their items to what they can afford but you have to realize their are people out there with way more disposable income than you and they may not want a $10 gift for a friend, they may want a $80 one and will pass up your items for something more expensive.    Another aspect is if you want to advertise all gifts under a certain price, then knock a few bucks off items to make it that.
If you are selling too much and cannot keep up, you may be underpricing yourself.  Think of it this way.
You sell 20 dolls for $15 each, you are constantly sewing and working out in the studio with no ME time.  Now you re-price the doll to $30 and you sell less but guess what you are still making the same amount and spending less time in the studio and have more time for other things.  The key is to give your art the value it deserves....

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