Welcome to Craft Venture – business and marketing tips for indie online business owners. Like me! I’m Brenda, owner of Phydeaux Designs on Etsy and 1000 Markets, and Phydelle Designs on Etsy. Last week, we talked about how much you’re worth, or are you worth paying a wage to? (Well, of course you are! You work very hard!) We’ve been talking about pricing – perhaps the most challenging part of owning your own business. Price too high, and your wonderful items don’t sell. Price too low, and you don’t make a profit or perhaps create the impression of lower value for your goods or services.
This summer, I completed the entire pricing exercise I’ve been talking with you about, resulting in a price overhaul. When all was said and done, I found I was right on point for several items, a little high on others, and seriously underpriced for many.
I worried about raising prices. There is often a perception that handmade should be low priced. From a business perspective, I neither want to be the most expensive nor the least. I’ve learned, however, that I’m not the best judge of “fair” pricing for hand knit items. When I look at other knit goods, my inner voice keeps saying, “I could knit that for so much less.”
I’m sure you’ve heard the phrase “what the market will bear” when it comes to pricing. You can go through the most sophisticated pricing models and calculations, but when all is said and done, your items will sell at a price range that your particular market is willing to pay. But is this true?
I don’t have a definitive answer for you! I’ve been reading about pricing for weeks and even the experts aren’t always clear (or in agreement). However, you can certainly figure this out for your own shop and goods, through a little trial and error.
If you’ve followed along with us, you’ve worked on your shop, improving your photos, reworking your descriptions, and you’ve perhaps even increased acceptance into online exhibits and marketplaces. Your advertising and promotional efforts are directed to your particular market. If you raise your prices and then see an immediate drop in sales, you just might be experiencing “what the market will bear.” If you drop your prices and see a significant increase in sales, you may be able to incrementally increase your prices until you see a levelling off. Now you have an idea of what your particular market will bear.
To successfully test your pricing, you want all other factors to remain constant. Just like a scientific experiment, you want to make sure the only variable factor is your pricing. Comparing pricing efforts if you’re having a huge promotion or sale, you’re sponsoring a giveaway or you were featured on a big site, isn’t going to be effective. You won’t really know if any changes in views or sales is due to pricing or other factors. Also, give it some time! A few days or even a week isn’t really enough time to gauge the effects of pricing changes.
You can also, of course, ask shoppers for feedback about your pricing. Ask people who you know will give you an honest answer and who are either buyers of your goods or the types of goods you make. If someone asked me what I’d pay for infant clothing, I couldn’t give a useful answer, since it’s not something I ever shop for.
What’s your experience with “what the market will bear?” Do you find yourself second guessing your pricing, worrying about what the market will bear? Have you found your ideal price range already?
Image credit: (1) Moneybag wallet by Chakra Pennywhistle; (2) Seeing dollar signs by Tole Mountain
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i am always frustrated about pricing because i know that i need my things to be in a higher end venue because most people are just not able or willing to spend the cash on etsy and some of the other sites. and of course, the people that price their goods really low don’t help it any.
thanks for the super articles!natasha
Thanks for the great comments everyone! Katie, I tend to do the same with my pricing (try to keep some uniformity in levels) – it makes more sense to me as a shopper, also!Brenda
This is an excellent series of articles. Thank you for sharing your experience and your expertise!Judy
I haven’t begun making anything handmade yet. I sold some photography and I do fairly well with my vintage store. I research similar products on Etsy and also see what they go for on corporate levels. I always price lower than corporate for the clothing, however with handmade knits, I feel like you could match or even slightly raise the price from that level, as the quality is what people go to Etsy for. I also find success in keeping prices uniform for similar items (super nice and hard to find vintage dresses i spike to $85, well made and classics are my mid range and most popular at $45, and dresses made from cheaper fabrics like polyester I price to 25-30) Although I can lose money on a particular sale, by keeping prices steady it increases buyer incentive, giving them the perception of a professionally-run business and you make out better in the long run.
Can’t wait to start making some cross stitches for the fall and winter to sell on Etsy.
<3 all my fellow handmakers and vintage fashionistas
I always find it difficult to price the things I make. I want to be accessible, but still value the amount of time and work that certain pieces require.Kiddlebug
Great helpful article – thanks for sharing it!
Maryhoganfe handmade handbag originals
I think I need to visit your past posts and learn a little about pricing and setting up shop…descriptions etc.char
I have been with Etsy for a while now and am NOT making it a very good business.
I have no idea where my prices should be…
Hmmm,perhaps a little re-thinking and re-organising.
Thanks for your great post and insight…I’m sure you’ve helped a few fellow crafters…
Did you enter my Giveaway yet?
Have a lovely day.