Pricing for Failure

Dare you ask for MORE?

Check if you are pricing for failure here

Any NOs to the following questions indicate you are probably underpricing The more NOs the worst the underpricing.

Are you making a living? YES/NO

Are you factoring your materials cost realistically? YES/NO

If you buy materials in bulk the unit cost per product is not the low figure until the whole bulk order is used – Look

If you spent all your  making time on each of your  products  would you cover your living costs ? YES/NO

Dont cheat by using every hour you work a week as making time, as no business can survive that, you need to spend most of your time selling.

The answer to her problem is simplify her product to halve her making time so she can then afford to sell it for half the price as £75 is simply too high for an apron. She could certainly sell some aprons for £75 but probably not four a week.

When you Google each of your products  in up-market  shops, is each in the top half of prices you find? YES/NO

Anything below middle is too low as you are individually hand making.

You will be amazed by the price of things in up market shops.

 If you changed your  packaging  would it be impossible to increase your price? YES/NO

 If you sold in more upmarket venues would it be impossible to raise your price? YES/NO

Picture taken by Hen’s Teeth at Woburn Abbey

Incidentally there is a good  list of online sales places here if you want to try somewhere new

Have you asked successful fellow craftspeople what  they think about your prices? YES/NO

They are the people worth listening to.

Are you selling to customers just like you?  YES/NO

Really? Unless you have a substantial private income or are a very successful craftsperson indeed, is that such a great idea?

Why try to sell to other people who are barely managing to cover their bills? When there are plenty of people out there with spare money ( even if they are not waving it around in the air.)

To find them you have to GO TO THEM (See Customer Segment  post)

Would a really substantial order at your current wholesale prices greatly improve your profits? YES/NO

Consider

• Cost of materials
• Impact of time taken making on other income generating activity
• Possible need to out source the making  and the consequent impact on costs
• Your enjoyment of repetitive making
• The loss of exclusive supply of that product
• Restrictions on your own retail price
• Waiting for payment
• Delivery costs

 A really big order at the wrong price can destroy you more surely than no sales at all

Build in a little bit of extra fat into your price even when you have done all your sums as there is always something that will cost you more which you haven’t allowed for.

Don’t be bullied by the retailer into selling too cheaply. Nobody needs a big order at the wrong price

Do you feel proud of  the Quality of your work? YES/NO

Under confidence lies at the bottom of all underpricing. Just as arrogance lies at the bottom of all over pricing.

The injustice is that some over priced goods will sell, just as some under priced goods will. But the under priced maker goes out of business

(To boost your confidence levels read this Coat of Arrogance )

Do you think you can just whack* your prices up anytime you like? YES/NO

*Sorry this subject seems to have bought out my inner Jamie Oliver

You can, I will show you in the next section

OKAY so that’s eleven questions, quite enough to be going on with.

So how many NOs ?

Please take any NOs seriously.

Not to beat yourself up

But to enter Wonderland where your prices work

Its nice here in Wonderland, do join us, each year we make a little more money and don’t have to work quite as hard as the year before

Lose the last of your resistance to increasing your prices here

LESSON ONE

LESSON TWO

You don’t need handmade items, there is always a cheaper mass-produced alternative, there is also always a cheaper handmade alternative

For the craft buyer it is not about price it is about DESIRE.

There you are, what a brilliant teacher, just look at those talented drawings

You do get it don’t you? After all you are not stupid

 How to put your prices up

Nobody minds if you put your prices up.

Previous buyers coming back for more will simply feel that they were clever to have been in on your beginning  when your prices were lower.

There will be some customers who will come back and find your prices might now be too high for them.

That’s okay because you couldn’t afford to sell to them at the old price AND the new price will bring in replacement customers. (Keep reading)

Be experimental about putting your prices up.

Try three different prices at the same time on similar pieces and you will find your customers don’t automatically buy the cheapest.

A Harrods customer knows that Primark sell clothes cheaper but that isn’t what it’s about for them.

Most people assume that a cheap price means a shoddy object. ESPECIALLY  ONLINE where you can’t see or handle it.

Very few people have the self-confidence to buy a wedding tiara from the Poundshop.

Most people think that PRICE = QUALITY

Just as your sense of self-worth is linked to how much you earn. Its stupid, but it is how it is.

So for every person who is enabled to buy by  a low price you will lose another who NEEDS TO PAY MORE

The clever thing is to have a few entry-level pieces and some middle range and some absolute stinkers with huge price tickets

Everything will be brought up by those high level pieces.

WHAT IS THE SENSE in having everything at knock down, hardly worth making prices?

And What of Sales? I know, that will be another post. There is enough here for now ( but I am against them)

I hope that helps, pricing is really difficult, there is no magic formula, it really comes down to  common sense and optimism.

If you would like my guess on the sort of price you could ask for a specific product then leave me a link in the comments and I will tell you what I think an  affluent middle class customer would be prepared to pay and if it’s the sort of thing they would buy. Its my best guess, it’s up to you to try it out. You must try it in the right place with the right packaging and for heaven’s sake remember to re factor in any change in costs that means.

A better life is just round the corner just take the risk, take your hand off the rail and skate out to it by SIMPLY PUTTING YOUR PRICES UP Yeah!