The First Rule of Pricing: Make No Assumptions

This contributor post was written by Tiffany Moore.

Let’s talk about money…yay!

Pricing is no fun. Trying to put a dollar amount on your creative product is never easy. But in terms of business, pricing is critical. (If you’re trying to sell things as a creative hobby, it might be a different story, but please, out of respect for those of us who are trying to do this as a business, know that how you price your “hobby” affects the people whose work is their livelihood.)

When I was working retail, I got a piece of advice from my manager that has been one of the biggest business lessons I’ve ever learned: “Don’t make assumptions about what other people can afford based on where you are in your own life.” It seems so simple, yet, I remind myself of this all the time.  I cannot put my own judgements on what other people can afford.

To take that to the next level: I cannot set my prices based on what I, my family, or my friends can afford.

As an artist, a designer, or crafter, it is not your job to determine what people can afford to pay. It is not your job to make sure that your best friend can afford one of your prints. It is not your job to make sure that you don’t make someone feel bad because they don’t have the money to purchase something you’re selling.

It is your job to make high-quality work. It is your job to get paid well for your time and your materials. It is your job to earn a living from your craft.

If you consistently hear, “Id love that, but I cant afford it right now,” that doesnt mean that your prices are too high. It means that youre marketing to the wrong people. But that’s material for another post?

Your turn: how have you learned to get out of your own way in terms of pricing? What boundaries have you had to push past to ask for what you’re really worth in your business?

*image via Fresh Words Market: My Worth Will Not Be Dictated by a Number

Tiffany Moore, co-founder of Teahouse Studio is an artist, life coach, change agent and magic maker. She helps creatives live their happiest, most sparkly lives (starting NOW) and thinks that everyone in the world is beautiful, including you.

61 comments | Click here to reply

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

Brilliant Beads (@BrilliantBling)

For the pro beaders, here’s an important pricing tip that doesn’t involve fancy formulas. http://t.co/v9Oo2Vpi

Morti (@Mortira)

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?

Julie Shinnick

[…] This contributor post was written by Tiffany Moore and is a follow-up to her earlier post, The First Rule of Pricing. […]

The Second Rule of Pricing: Keep it Sustainable | papernstitch

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

Kim

Thank you! This article has given me much to think about…
I started a small sewing business (Sissy Sue) last October, hoping to provide lovely, durable and affordable products. I totally thought about myself, what I could afford, when pricing (and, because of a good friend’s advice, added 5€ to everything…and i’m still about 5€ below prices in other stores…not on etsy or dawanda; here the websites have so much competition, prices can be driven pretty low).
Lots to consider, as I seek to establish this small business. I’d be very interested in follow up articles about target groups/marketing. Keep up the good work!

Mary

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!

Shannon

I’ve been thinking about pricing a lot recently, so this a very timely post. I know I need to make some changes, but it’s hard! I know it will be worth it, because my time is valuable and until I understand that, I can’t expect anyone else to either.

Natalie @ NS Pottery

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.

cinzia allocca

[…] Running an indie business?  Make no assumptions. […]

Links « What. No Mints?

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

ALEXANDRA

@Theresa, I think you make a great point here, thanks for bringing this up. I don’t think that it has to be the case that everyone’s target market is limited to people who can only afford luxury items. In economic times such as these, the focus tends to be on the what we can’t afford, how times are hard, etc. and as a business owner, it’s VERY easy to let those trends influence your pricing.

I’m not proposing that you price everything sky-high, but that you think objectively about your prices so that your business can be sustainable. And that you treat yourself fairly first, as the business owner and creator, instead of just being influenced by your immediate circle.

In addition, if your main goal is to make things that the people around you can afford (and if they have limitations on what they can afford) how can you shift your product to make it more affordable for both you and them?

To everyone, I am LOVING the collective wisdom of this group and the many points thta have been brought up around pricing. Thank you all for sharing your thoughts so openly and honestly as you discuss both your struggles AND what’s worked for you!

Tiffany

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”.

karin

My trouble with this is everyones target market is going to be those people with the kind of expendable income for luxury items. If I, my friends and family can’t afford my work then who exactly am I doing this for? Im limiting access to my work to the same people who always have access to the best. I want people like myself to have access to my work and as such price it accordingly which leads to more customers. That doesnt mean I undervalue myself or my work and I make sure that costs are covered. As a business owner, I do have to consider what my customers are willing to pay for my items because it could take me 3 days of constant work to make one pair of earring but there is only so much people are willing to pay for that regardless of the care and attention and quality of materials that go into it.

Theresa

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.

Allie

Such a great article & every bit if it resonated with me. I have had the ‘ your art is too expensive’ happen to me multiple times. At first I doubted myself & then eventually I realized these people are not my target market.
I cannot price my original art the same as art prints . The people who have bought my art did so because the price was not a factor to them & they liked the fact that they were paying for original art .
Thank you for sharing your wisdom.

Lakshmi

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!

Annamaria Potamiti

Wow…such a great post! Your advise really resonates with me, as I have struggled with pricing my jewelry from day one. I have the formula, but once I have figured out what the price should be for each piece based on the formula, I usually do the mental run down of questions like “is this something I could afford?”, “Can my best friend afford this?” and on & on & on. Often, this leads to some pricing adjustments. Your advise helps tremendously & I will use it as a reminder each time that I price my pieces!!

Thanks so much!
Mary

Mary

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.

Alana Rivera

This is an excellent post. I couldn’t agree more. I cringe when I hear people say, well the economy is bad so that’s why I underprice myself…I feel like shaking them and saying no no no! Not everyone is in a bad economy…but if you underprice yourself, it affects all of us and THAT makes for a bad economy!

Deanna C
Leave a reply