The Art of Pricing Seminar
When I signed up to attend the seminar, I thought it would teach me the magic formula on how to price my product properly so I would sell like a mad women. Maybe I took the title of the seminar too literally! Though they were not able to give me a magic pricing formula to SELL SELL SELL. What they did give me was a boost of confidence. Hopefully you will get something from my notes(However, if you have the time please go to the Etsy lab and try to catch the seminar online).
First and foremost: DO NOT UNDERPRICE YOURSELF! This is a huge detriment to all crafters. 86% of crafters undervalue their work, which in essence we are pricing ourselves out of a profitable business. She recommended that we drop the “starving artist” bit. Instead visualize yourself as a “thriving artist”. No one else can do what you do, no matter your craft, you HAVE value! You alone add something special to your craft. Do not compare yourself to others; rather put value on your experience and your know-how.
What is your hourly wage that you bill your time as? If it is not $20-$50 then you are under pricing yourself. After all we have years of honing our craft, that has value! I majored in Art at a major university (UCSB) as well as trained at The Art Institute. I majored in Studio Art, Graphic Design and minored in Art History. I have KNOWLEDGE and VALUE! Why am I okay with only making $5 an hour (or less sometimes)!? Even if you were not “formally” trained, just your time and effort into honing your craft is worth big bucks alone! After all you are not a sweat shop, pay yourself! Be confident and do not sell yourself short.
Therefore you need to start to figure out the proper pricing for making a profitable business. Here is what you will need to do.
Price or materials + overhead + labor costs + profit= Wholesale
Wholesale x 2 = Retail
Let me explain the first formula. Your labor costs and profit are NOT the same thing. Your labor costs are your basic salary for you or an employee. You also need to make a profit ON TOP of that. As for the overhead that needs to include costs to run, package and market your business. You must incorporate those things. Price of materials is self explanatory! The reason this is an important formula is because as a business you will want to secure wholesale accounts, you will need to make a profit on that amount so you are not working for free. Even if you run as a retail only business, you still need wholesale pricing to figure out retail.
If you plug in all the numbers correctly then you will probably get a very large amount for a product (probably more than you are comfortable with). That’s a good thing! That is how much you SHOULD be making. Crazy, right?!
With this new number worked out, you may be worried about overpricing yourself out of clientele. But don’t let that fear keep you from receiving what you really deserve. There is a market for everyone one out there, find your market at the proper fee for your talent. Yes, you may sell less but you will also work less, which will actually mean your make MORE! If you are a hobbyist then this might not apply as much to you, but if you want to actually make money at your craft that makes you a business. It is a business’ sole job to MAKE MONEY! Make no bones about it; you are supposed to make a profit. That’s how a business works.
Don’t be embarrassed by your prices and NEVER tell someone that your prices are high. Your craft has value and you should NEVER make light of that. There are a wide variety of skills out there, some people perceive as great and some not-so-great. That’s the opinion of a consumer. The consumer places the value according to what suits their life, taste and skills. Every one of us has a consumer just right for our business. Find your consumer!
After this seminar I realized that I was relying too much on what my friends and family said about prices. I actually let a friend price one of my hand painted stools at $50 because that is what SHE thought it was worth! What!? I spent 6 hours painting that thing and it should have been priced at $300. After all, I do consider myself master craftsmen in my area. I let someone devalue that on THEIR budget. Separate your feelings out of pricing and rip off the band aid. Price your products according to the correct formula not what you think someone will spend. My stuff should be priced WAY higher than it is. It is time for me to bite the bullet and accept that my art is worth EVERY penny of the “proper” price and to never devalue myself again.
In closing, you better believe I will raise my prices. If anyone says anything, oh well! I have to show the world that I value my stuff. After all, if you don’t value it no one else will either.
