underpricing

[#1]

I've been pondering a lot this weekend about how many talented people are selling their work for so little. Why do people do it? It's so sad. So I wanted to say this...

Dear lovely people of the small business world... please stop underpricing your handmade work. It is worth more. You are worth more. Have faith in yourselves & raise those prices!

[Former_Member]

I've been told my prices are low, but I've been on a run of bumping them up. Business has gotten busy enough and I have enough of a following now, that I feel I can raise my prices to make it worthwhile for me. I think it takes awhile to get to this place, and many new shops start off with way too low prices!!

[LetterLuxe]

Pricing is one of the hardest things for me. I've been selling on Etsy for a little over a year now and and still don't know if I've priced my letters too low or too high.

[Former_Member]

its also a market price issue. the market might not bear the prices. I know i would be selling a lot more if my products were half the price, but my costs wont allow it.

[JeannieGrayKnits]

I know my prices are too low. They are hobby prices rather than business prices. But I just can't force myself to double them, which is where they really should be in order for me to earn a low but decent hourly wage. And then I go & see someone who is selling a similar item at half of what I'm asking. I don't know how they are even covering their supply cost at those low prices, much less making any kind of hourly wage.

[MyDistinctDesigns]

This happens alot in jewelry. I have even seen a pair of earrings listed for .20. That is what it costs to list them. So I ask myself what are they thinking????
It also is quite common in jewelry to see items that are obviously not handmade but are labeled handmade. So I guess the answer to this is to market to the customer who is looking for something different and well made. The problem is alot of consumers do not know the difference.

[ShopGreyweather]

Jewelry selling is so frustrating. I have paid retail for about half of my supplies (so stupid) and will never get my money back out of that. I have tried to price my items fairly (middle of the road with my competition) but my sales have been dwindling, pretty much in the toilet - most of my sales have been to people I know. At this point I don't know what to do!

[mahzerandvee]

This is a great question! A good question to ponder, thanks for bringing this subject up! :)

Can someone see if our prices are too low or too high? We sell home accessories in color. i think our prices are affordable because we didn't want people to think twice if they liked something but thought it was too high so then they might not buy it. Any suggestion/opinions could be nice.

THANK YOU!

[MadebyJadeB]

Does anyone think I need to raise my prices? Sometimes I think after my time, pictures, creative work... it doesn't pay as well as I first think.

I am afraid buyers won't like higher prices...

[mahzerandvee]

Jade: That's what I was thinking!! :)

[MyDistinctDesigns]

Jade- I feel the same way. With all the time I spend on listing, promoting and the ever elusive perfect picture, I think I make about 5 cents per hour.

[Former_Member]

My friends think my prices are too low too... what do you think?

http://www.facebook.com/LuckystarsHawaii

[Former_Member]

I think about this often when I see something that's going for a lot less than I think it's worth. And it can even hurt your sales if they are way too low. People will start to wonder if there is something wrong with it. Also in this community people actually care about where there stuff comes from and how who makes it is treated so they are willing to pay more.

[KLKingDesigns]

Meghann Lynch from LittleStudioJewels says Edited on Feb 11, 2012

It always frustrates me when I see people making similar things to what I make, but pricing them so low as to make no profit. It makes my things look overpriced, it makes their items look cheap and it throws potential customers for a loop because they don't know which to go for - the inexpensive item that may be cheap, or the more expensive item that looks exactly the same for twice the price.
I make my jewelry for a living, and when people undercut, everyone loses. I always look at those shops and I feel badly for them - they'll never make money doing what they love if they can't profit. I feel like showing them a few of the business books I have on pricing :)

Posted at 7:44 pm Feb 11, 2012

Thank You for this intelligent comment! I really get frustrated with shops that are giving their work away, barely covering the costs of materials.
Also, When you give free shipping, your cost per sale increases, because ETSY takes a cut only on the Purchase price, not the total with shipping. PayPal gets you for the shipping, plus they make a shipping processing fee on top of that!
I REALLY wish people who want to work for free would go and start another website somewhere else, and ETSY won't be as cluttered up with
Hobbyists who want to give their stuff away. You are really hurting those of us who need to make a living!
I'm really sorry, I know this sounds harsh....
But I'm frustrated with this issue! If you are making something, get the calculator out. PRICE = Costs x 3-5 times mark-up , and if it's labor intensive, then think in the terms of paying yourself an hourly rate. Would you go hire out at a job and ask for .50 cents an hour? Then why are you doing it here?

[TheRogueBaby]

I always try to price my items competitively, but I'm still not seeing an increase in sales. I've played with raising prices, and lowering them, and no real difference in sale volume. I worry about pricing too cheaply and making my items look "cheap", but worry if I overprice I won't get any sales. I try to research similar items and price as competitively as I can. It's a never ending battle.

[Davs]

In response to Karen's talk about free shipping:

People may think I'm losing out by offering free shipping, but I have never paid more than $15 to ship an item, and when I do pay higher shipping costs it's on my higher priced items ($85-$200), so yeah, I might lose $3-15 out of my profit but my profit is such that I don't mind paying the shipping. I save and recycle boxes for shipping and recently have started painting on canvas board rather than stretched canvas so i can ship in flat no-bend mailers which is cutting my shipping costs down even more, and delivery confirmation is like a dollar. I have been selling here for just about two years and have never regretted offering free shipping and doubt my customers mind it either.

[KLKingDesigns]

Sarah, my issue isn't whether or not you offer free shipping, it's about whether or not you are aware of your real costs of running a business. It appears you are.
There are a lot of other people here who do not seem to know how to set their prices, or they think Grossly Undercutting the Competition is a good strategy and are trying to get sales by large volumes at cheap prices. That really only pays off if you are a supply wholesaler-or reseller; not a maker of handmade arts and crafts.
I have no complaint against the seller who offers a good value for a well-made product. Or, for that matter, one who has enough respect for the craft, and their fellow sellers to charge a "reasonable" price.

[Former_Member]

i raised my prices a bit a couple of days ago because i've been reading about it and researching similar items and everybody ( mostly) charges more than me.
And I put so much work in details that I think it goes accordingly...
what do you think?

[Former_Member]

I rarely offer free shipping,,,only for he holidays and for a short time...

[Former_Member]

I have a lot of trouble with pricing.

I see people who have items, like mine, for almost triple what I charge and they seem to sell.
There are also people who are selling items like mine for much less.
I don't want to overcharge or undercharge, but it's very hard finding a balance. I'd appreciate it if I could get a little feedback.

[Former_Member]

I wouldn't offer free shipping or I wouldn't make a profit on some items. I usually include fees in my shipping cost.

[ChrisOsCreations]

i really don't know if my prices are too low or not
but i think "are you going to buy it?"
my friends tell me all the time that i charge too low...
it's a mess ...

[MythOfTheWild]

Also, having low prices might make you think they'll sell - they won't. It comes across as poorly made and like you have little confidence in yourself. The higher the price, the more stable and wonderful the item seems! Which it probably is! You wouldn't sell junk on here, afterall, would you?

I totally agree with the OP, I had to point this out to someone just yesterday!

[Former_Member]

For those of you building your shipping into your prices - you're paying Etsy fees on that. If you have your shipping prices separate, you don't pay fees on them.

I've run free shipping sales, with zero sales. And a lot of shoppers are savvy enough to know that you're building the price into the cost of the item, anyway.

Just some food for thought.

[BleachedBonesStore]

I think the majority of goods on these kinds of sites are actually too high for the worth of the item, but too low for the effort involved.

I think that about most art, including my own. The amount I'd realistically have to charge is far too high for the actual objective worth of it.

Everybody is different and willing to pay different amounts for different things.

And everyone is in this for a different reason... Some are just here to have fun and sell the mass of stuff they make.

Just let everyone do what they want. :)

[Creatureshire]

Pricing is really hard for me. Most of my cost is actually the time I work on each item, but I am reluctant to pass the totality of that value to the buyer so I always end up undervaluing items.
I suppose that this reluctance comes from having too few sales and not knowing how much buyers are willing to pay for my things.