The Basics of Pricing Online Lab

[#1]

Sellers!

We’re in the throes of the month of May and I wanted to reach out to you about the topic du jour this month, pricing. From mastering the pricing formula to practicing pricing strategies, this topic is one that takes time and energy to master. I’m here today to tell you about a lab we’re having later this week and want to encourage you all to come out and get your questions answered.

What: The Basics of Pricing with Danielle and Michelle
When: Thursday, May 10 - 3:00 p.m. ET
Where: Etsy’s Online Labs, www.etsy.me/onlinelabs
How: To RSVP to attend an Online Lab click on the blue “RSVP now” button next to the lab you’d like to attend. We’ll send you a confirmation email and then remind you right before the lab starts.

Leave your pricing questions in this thread and we’ll answer a few during the Online Lab LIVE!

Nickey

[Former_Member]

Looking forward to it!

[Former_Member]

I've been basing my prices on a pretty simple formula--

(what it costs me to create it x 2) + hourly rate

After a few sales though, I realized that number was what I wanted to walk away from the sale with, ie if I were selling in person or at a craft fair. I'm trying to figure out a quick and easy way to adjust my prices to account for the transaction fees both here on Etsy and through PayPal.

I'm also trying to figure out how some sellers seem to be selling at a loss. In my jewelry making adventures, I've experimented with a lot of different mediums and styles, so I have a pretty good idea what it costs to make a variety of things. When I see items listed for a lot less than that, I get frustrated. If people are willing to sell at a loss, how am I supposed to compete with that?

Anyway, I'm super excited about this lab. Until tomorrow :)

[etherealflowers]

Hi, i've read about the concerns about the lower prices of chinese sellers - they can afford to do that because there (but also in other countries) materials cost less and the hourly wages are far below western ones.
i think the only way to keep ourselves surfing and not drowning in this globalized market is to create unique products, where the price is the least important (or at least not the primary) variable that push the customer to shop at our shops.

my 2 cents, hope i wrote clearly - i apologize for any mistake ^_^°

[hutapearl]

I just joined the Success Team, so my question may be redundant as I haven't read all of the thread yet.
Will you be giving us a specific formula for pricing our handmade jewelry items in the online lab today?

[Former_Member]

It takes me quite a while to create some of my products. How do I fugure pricing? I want it to be affordable, but I still need to allow for the actual time it takes to make it as well as costs for supplies and the like.

[Former_Member]

My Q? = What exactly do you charge for "labor?" Minimum wage? What guideline do you use to determine your hourly rate when computing labor costs?

[ionesAttic]

along the lines of learnlaughgrow's question...
Is there a visual/emotional benefit to pricing in round numbers?

10.00, 22.00 30.00
as opposed to
9.00, 17.00, 29.00

[Former_Member]

I would love to know the answer to Veronica's question as well! I have a difficult time determining wholesale prices to retail. Also, I would love to know what price you feel is generally appropriate for labor cost?

I have been using this formula:

material cost (not at the discounted rate, if you got a discount) + my hourly labor rate = wholesale price. For retail: wholesale price x 2 = retail price

I currently have a client that is taking my wholesale prices and asking me to cut them in half for their large order. What is the best way to address this? Any other forums or resourses you could recommend? Talking money can be difficult when you really want the job to work out!

[Former_Member · Accepted solution]

Hey all, this is happening now! You can tune in and watch this discussion live, here:

www.etsy.me/onlinelabs

[etherealflowers]

great lab, and now i need to rise my prices.

thanks and ciao! :)

[TAGSMITH]

Thanks so much for this lab. It's full of useful information. It's the first lab I've ever watched, now I'm hooked. I have to watch them all.

[Former_Member]

How do I listen to the event? Unfortunately I was not able to attend it live.

[Former_Member]

Hi California,

Go to http://www.etsy.com/community/online-labs and open the Etsy Success folder in the Video Library. Yesterday's lab is called "The Basics of Pricing" and it's the first video that shows up. You can view it there!

Hope that helps!
Thanks,
Sara

[NikiJacksonArtist]

Just wanted to check it is only meant to be 20mins long? Seems like it got cut off just as they were about to answer questions?
Thanks
x

[Former_Member]

Before I determine a price for any of my jewelry I figure out how much the materials will cost and the amount of time it will take to make. I then research several web sites to get the percieved value or at least a general idea of what someone would pay for this particular product. Over time I have gotten a feel for pricing using this method. So, before I determine how much to sell a product for, I determine whether I should even be selling it in the first place.

When determining my labor, I include all my time associated with making the jewelry. This includes travel, research, procurement and production.

When determining which products to promote I try to work on a 3 times margin. Meaning that if my time and labor costs are $5.00 then I would sell the product for $15.00. But I try to find the products that I can mark up even higher.

Looking forward to the forum, Coco

[Former_Member]

Thank you Sara for the link to the lab! It seems like it got cut off after about 21 minutes. Is there more to watch?

[TheJewelsILove]

Veronica from VeronicaRussekJoyas says

Kathy, are you pricing based only on materials cost? Do you charge for your time it takes to make your items?

Yes Veronica, my formula is:
materials X 3 + my time.
But I'm notreally sure it's right.

Thank you,
Kathy

[ShopDeliciousThreads]

They had some sort of technical issue partway through the lab, so that's probably why the archived video is only about 20 minutes long. The actual lab was longer than that.

[NikiJacksonArtist]

Ok thanks, what a shame I missed the last part :(

[NikiJacksonArtist]

Did anyone take notes that they could share please? x

[Former_Member]

How do you price your items when the ingredients [or supplies] don't always cost the same amount? For instance, raspberries are seasonal. So I assume I should either NOT sell thins with raspberries when they are not in season OR raise the price of the items in the off-season as the price of raspberries rises?

But what about things like staple ingredients that just...fluctuate in price all the time. I imagine it would be simpler just to across the board add 2-5% to the price of an item to account for this?