The First Rule of Pricing: Make No Assumptions

AWESOME article on the @papernstitch blog: The First Rule of Pricing: Make No Assumptions http://t.co/FuS7stuv

The First Rule of Pricing: Make No Assumptions
by @papernstitch
http://t.co/O0TiJn02 via @sharethis

The First Rule of Pricing: Make No Assumptions http://t.co/hwM088Vu via @sharethis

RT @designcoyote: A good reminder for all makers: “The First Rule of Pricing: Make No Assumptions” http://t.co/CFm0Jfh4 #design #pricing

A good reminder for all makers: “The FIrst Rule of Pricing: Make No Assumptions” http://t.co/milI5Kas #design #pricing

Good advice for pricing artwork http://t.co/EoLutrDu

a must read! “@thevedahouse: A really great article about freelance pricing and respecting the industry // http://t.co/nIcfBqHTâ€

very true!! i definitely had a learning curve in this area. after a long while of undervaluing myself and basically giving away my products/services … i decided to shift gears and change my target market and hold my price high. it’s turned a couple people away, but still i’d rather have my dignity and self-worth than worry about what others can afford. i’m worth it!

RT @thevedahouse: A really great article about freelance pricing and respecting the industry // http://t.co/ZQTZnYkj

this is SO good! RT @thevedahouse A really great article about freelance pricing and respecting the industry // http://t.co/v3OGva0W

This is a very interesting article for self employed creatives. I am pretty sure I am not alone in pricing my… http://t.co/j7ViEkJR

Thank you for all who contributed to this post. Most timely as I am about to start taking my creations to a Market. Pricing IS the hardest part and is the reason I have been too chicken to put a lot of my stuff online. ahhhh fear of the rejection! We can’t let fear hold us back, can we?

I’m so glad I was catching up on blog posts I follow and ran across your thoughtfull article. You’ve set my thoughts turning and I’ll be reevaulating if I’m under valuing my work.

Thanks, Kim

I really enjoyed your article! lots to think about there. Having sold my web design and graphics “expertise” over the years, I have to admit I still have a hard time putting a value on my work. There’s one lady who’s website I created and still host who is getting my time for free that probably shouldn’t. Even if all I’m doing is uploading images to her photo gallery for her. I’m a huge softy and I know it.

If there was a how-to guide on how to decide what your work is worth I’d read it! But when push comes to shove, I look at other artists who do similar work to give me an idea of value in the market now. Then you have to take into account how long they’ve been doing what they do and how much of that value is due to building a name/career in that genre or medium. It’s so difficult to decide!

great post! I’ve read so much about this and pretty much every article confirms what you’ve said. I’ve learned to put the proper worth on my goods because I KNOW THE KIND OF EFFORT AND ATTENTION I put into the things I make. I am confident that I am puttign out a product that is of high quality and worksmanship and that is original. I now have years of experience in designing and making quilts, etc., and I consider it my expertise. That experience and knowledge and my time (because it is valuable) is factored into my prices.

When the right cotumer has come along and found what they were looking for, there was no question about prices and shipping costs. They found what they wanted and paid for it.

By the same token, and along the way, I have learned to respect others in their field and expertise and am willing to pay for that experience.

this is one of those articles where the comments become part of the article itself…this has all been so enlightening!! I had never been able to put into words what holds me back from giving my art (abstract oil paintings and a new 2012 calendar) the price it deserves but it is the ‘ASSUMPTION’…i’m turning your ideas into quotes that i’ll put up on my inspiration board to guide me through my difficult pricing dilema…thank you and I’ll keep an eye out for your very useful tips

For me I think that part of the issue is that a lot of people just make things that can be easily bought cheaply in shops. To give an example I was at a fair over Christmas where a seller had fabric purses and wallets. They were nice but nothing really ‘wow’ about them. I’ve seen similar in every high street chain store.

Another fair had a seller making purses and pouches of all different sizes out of waterproof fabric. To me I would gladly pay for something that to me is useful. For me it was a gift for my sister who is going travelling and needs waterproof bags. So useful, beautiful and handmade all in one go.

So if you are making something like a purse or wallet that is easily available then something has to be special about it : custom embroidery, personalised with your dad’s initials, made of rare Japanese fabrics) rather than just made out of an old curtain.

I think Coco Chanel puts it well with “in order to be irreplaceable one must always be different”.

This is interesting. When I first decided to put some of my beadwoven jewelry pieces up for sale, I did pay attention to how much I could afford to pay for such a piece — which is not much! Rather than causing me to charge lower prices, it actually led me to a higher price range in order to be able to buy the best materials. I.e., the more I get paid for a piece, the more I am able to stock myself with quality materials, which in turn allows me to charge more money due to the quality materials. It’s a little circular but I find that it works for me. I am extremely lucky to have a market, albeit a small one, which consists of women in executive-type positions and environments, who are looking for pieces to match businesswear etc and even go from their day jobs to a dinner out. My customers are definitely willing to pay for quality. Another tip, that helps me “justify” my prices, is that I write a small description that goes with each piece or each sample piece, detailing both the materials as well as the amount of work put in — nothing elaborate, just throwing in phrases such as, “the thousands of hand-stitched beads” etc., or anything that I can say that would make a customer understand the hours and hours of work that can go into an elaborate piece of jewelry. Many people do not even consider how much work goes into things — which is why I feel free to tell them! And then they know they have something special. In such notices, I like to provide a little “story” about the circumstances around each design. I have found that blurbs like that make a customer much more likely to spend the extra bucks for a piece of jewelry — they are buying the story along with the design.
I am not immune to guilt, though! I have a good friend who works at my LBS and she seriously underprices her work. She would never sell anything that wasn’t her own original design, and nevertheless prices things at, say, 35 bucks when I would charge more than twice that — but I am selling my pieces in a very different market. It’s really difficult. Sometimes, the time spent on a piece doesn’t factor in much — I am likely to underprice items that are just strung rather than made with an intricate weave. But I try to think of it this way — the higher profit margin on such projects gives me a chance to spend more time on elaborate pieces. I am a very slow beadweaver in general and if I were to pay myself by the hour…… well then the prices would be absurd. So I like to think it evens out in the end. Just like anyone else, I do the best I can. But I still sometimes end up pricing things sort of arbitrarily. “What the market will bear.” One last comment — before I started selling, I padded some prices even more — in order to offer discounts without losing money on the deal. I give almost everyone a little break, always with a reason – say, being a family friend, or a “fellow artist” discount. Even if an item is very pricey, it seems many women like to focus on “how much money I saved!” rather than how much they actually spent. (I know I do!)
Hmm sorry for rambling; I’ve got some strong views on this subject. Perhaps I should go back to my own writerly roots and do my own article rather than leaving disjointed comments on others’! 😉 If you got this far, I thank you for reading.

Thank you Tiffany,for such a great post! Pricing is such a complicated issue when trying to make a living as an artist. Any constructive thoughts about it are very welcome!

Great post!! I was definitely guilty of under-pricing my handmade bath and body products when I first started because I wanted them to be accessible. But the truth of the matter is that sustainable raw materials cost more, making things in small batches costs more, and actually being able to pay yourself requires you to make hard decisions on pricing. I ended up increasing all my prices about two years ago and I was terrified that I would loose a bunch of customers but instead I received a lot of encouraging emails. It made me realize that people do value my products and are willing to pay more because they like them. I am so thankful that the growing interest in handmade has helped educate consumers about the true VALUE of artisan items.

Omg, this is such timely advice for me! I have a new handmade soap business, and just today I was pricing out organic and sustainable ingredients (palm oil that doesn’t involve rain forest deforestation, fair trade shea butter that supports a woman’s cooperative in Uganda, etc.). I’m a bleeding heart, and I want to make a DIFFERENCE with my products. But I know that if it weren’t for my business, I couldn’t afford the products that I make (at the moment, at least), which makes me feel badly.

Buying the better ingredients isn’t THAT much more expensive, yet it will still mean a slight price increase if I want to pay myself fairly.

I’m going to go for it. 🙂

Great post! I’ve come to the realization that it’s o.k. to feel that sticker shock when pricing my own items. I’m worth it! My time. My energy. I recently raised all my prices after realizing that even when working my hardest and being the busiest I’ve ever been, that I barely broke even. I had to really evaluate what my time was worth. I’m happy with my decision and proud of my work. If people want what I have to offer, they may have to save a little more to get it, but it will last them a lifetime! And if they have the money to buy it right off, and they want it, they will.

Wonderful post!

Although I am not trying to make a living from things I make, I passionately believe that we need a paradigm shift in the way we think about VALUE.

Learning to sew has made me realise how much time and effort goes into sewing things, for example. We need to value human beings: their talent, their creativity, their time, their labour…. even mass-produced goods are frequently underpriced in terms of the human effort that has gone into producing them… let alone all the advantages of handmade goods and art.

The idea of giving a discount to friends and family is a great one 🙂

this is such a great post! it’s exactly what i needed i’m always worrying about whether people could afford what i feel my work is worth. thank you for this 🙂

This is such an important topic! The unfortunate thing is that consumers are just really used to low price points, which are often achieved by unfair labor situations. A friend of mine just wrote an amazing article about this here: http://laurenelisenanson.wordpress.com/2012/01/17/the-truth-about-budget-fashion/

That point you made about not making assumptions about what your target market can spend based on your own situation is so key. I have to remind myself of this every day!

This is a fundamental lesson for creatives that run a business. A year after launching my photography biz, I met a woman who had been at it for five years longer than me. She gracefully pointed out that my prices were severely low. It was definitely a challenge to up my prices. I’ve had to say “no” to several potential clients who have outright asked for a pretty steep discount. One helpful approach I’ve implemented is a friends and family 10% discount. It saves me from giving away my work but also allows those close to me a small break.

Great advice, although rather hard to follow sometimes. I often get conflicted when wanting to price my work and take the means of my potential costumers into consideration. What if my target costumer is someone, who can’t afford the “real” price? Or am I underestimating my market or should I reconsider my target audience? I would love to put a fair price on my creations, but it does frighten me sometimes whether I’ll be able to sell it at that price.

Great article! As for me, I read up on different pricing formulas and figured out a system that worked for me, early on. I was fortunate to have a mentor when I first started selling onetsy, and she sent me links to these high end jewelry sites that were very bold about their pricing and suggested I up my prices even further. Her suggestion to me was to price my work and then add on another $5 or $10 past my comfort level. At first, I felt bad about my prices, but Marlo (my mentor) was right. With the fluctuating silver market and now taking into account wholesaling at 50% my retail price, I can be assured that I am still going to make a profit. My price point also allows me to offer grat customer service; free shipping specials, upgrades for my best repeat customers, and discounts, too. Pricing is still challenging, but focusing on offering a customizable, high quality product and awesome customer service helps keep my confidence. Thanks for the post! 😉

I wish there was a facebook “like” button for this post!