March 22, 2008
some thoughts about pricing
I've given up on formulas.
Until about a year ago, I used 'pricing forms' I'd made on excel.
For every jewelry component I purchased, I calculated the price, down to the last pearl, and listed the price on every little compartment or container in which I stashed all these parts. When a piece of jewelry was completed, I listed the cost of each and every bead, jump ring, clasp, ear wire, every inch of wire used. And of course, I kept track of the time it took to make the jewelry. I knew my mark-up, my percentage of profit....all that...and the time it took to do all this was sometimes greater than designing and making the jewelry!
I've scrapped all these time-wasting calculations and am back to pricing by my gut, the way I did when I started out, and I feel so much freer to just enjoy the process of making jewelry.
However, I've gotten some useful advice from customers and friends that I've used to guide me in 'pricing by gut', and I'd like to share some:
Pricing is not just about cost and mark-up. It's about perception. Customers usually know when you are under-pricing yourself. While this may not lead them to the conclusion that your work is shoddy or your materials are sub-par, it will give them the impression that you lack confidence! They will wonder why you don't value yourself, let alone your product. It will unconsciously feel icky to them (pardon me for not coming up with a better word, but I think 'icky' explains it pretty well). Be aware that when you handcraft an item, it becomes imbued with your feelings - about yourself and about the process, even about the customers you are hoping to attract. Your customers will pick up on your feelings and your lack of confidence will subconsciously repel them. Strange but True! Conversely, the love, respect, and joy, that you put into what you make will be felt and appreciated by the customer. Really! And when they pick up on that, price becomes less of an issue for them.
Pricing is about your market and where you want to place yourself in that market. If your market expects to pay more, raise your prices! I've had the very good fortune of selling primarily at craft shows and retail shops in the very-high end resort areas of Colorado. I realize not everyone is so fortunate, and you must consider your own unique market, but do allow that your market may be more high-end than you realize. You are not, after all, competing with Wal-Mart. People who are looking for the cheapest price are not your customers! Your customers are people who are looking for unique handcrafted items, and they expect to pay more. (And if you are looking to wholesale and your product is unique and well made, consider seeking out shops in resort areas. No kidding! If you want the money to come to you, go where the money is!)
Do use your common sense and intelligence when pricing. Don't price silver plated earrings as if they are sterling (and vice versa!). Be honest and reasonable in your pricing and your customers will respect you for it. Know that a 'good deal' is not the lowest price. It is about getting the best quality product at a fair price. Price to be fair to your customer and to yourself and you will both feel like you got a 'good deal'.
This post is already much longer than I intended, so I will leave it here and maybe return to the subject another time. Thanks for bearing with me if you've made it this far!
Posted by Carol at 1:48 PM