We want to create a new Seller Tips series that covers everything you’ve ever wanted to ask around pricing. So tell us, what do you need to know?
Go as specific as you want, and we’ll try to get an answer for you.
Or maybe you’ve got an experience that would be useful for other sellers as a case study? How do you price your work? Have you got a formula that works for you - or do you choose a different way of pricing? What have you found useful in terms of advice, tips, apps - and what doesn’t work for you in the traditional advice out there?
We want to know! Leave a comment below or if you don’t feel comfortable sharing here, drop us an email at community@folksy.co.uk and we can always share it anonymously if you prefer.
I recently did a course on Creative Live with Megan Auman which utterly changed my approach to pricing. One thing in particular that is so important and I know many makers, including myself until recently, don’t do is price their work so that it’s profitable at wholesale. Also not factoring in overheads and time taken etc. I think pricing can be such a tricky area for everyone especially when you’re in business on your own and so tied up with self-esteem. When working in the arts everything is always hammered home as being a luxury and you can feel so guilty enjoying what you do thinking you shouldn’t charge so much for it, but we all need to value the skills we bring to our work and the many years of practice and hard work that means we can create what we do.
I always feel so guilty about how much I charge (especially for my doll house miniatures) but I have to remind myself that I am charging quite a modest hourly rate. In the case of my miniatures, not many people work in such great detail on such a tiny scale so they are pretty unique. It is so difficult to get pricing right but I have many very happy customers (not sadly on Folksy yet) so I must be doing something right. I know if I dropped my prices I would get more sales but I don’t feel good about underselling my work just to appear more successful. One of the things that can be useful is to look at other peoples work of similar quality, materials etc. and price mid range and then see what happens - if you get lots of sales then you can up your prices a bit or as a last resort have a ‘discount offer’ if sales are slack. It is difficult to be objective about your work and its ‘value’ but underpricing your work is probably not a good idea.
Pricing is something I struggled with when I first started out. The majority of my sales are through craft/artisan events, where, at times, there can be a lot of competition. I did a lot of research and now have a formula I’m happy with - (materials+time+5%)x2+packaging. For items that have a low material cost but high time cost, I adjust the formula. This approach has worked for me ie steady sales at face to face events.
I do get annoyed when I see items at events and on line that are handmade but are priced extremely low, probably only just covering material costs, but you just have to smile and compliment the skill that went into the making!
My biggest challenge is how do we get prospective customers to appreciate the work which has gone into something to justify the price asked?. The cost of materials is rising for all of us but I think a lot of people don’t appreciate the actual time which goes into creating some of our pieces. I for one am very guilty of undercharging on my time, and that not only disrespects myself and my skills but those of other makers as an indirect result.
About 5 years ago when a friend of mine came back from a trip to Ireland, he was showing off his wonderful new hand-knitted wool sweater, which he said was a bargain at only £450.
Would you be happier selling one sweater at £700 or ten sweaters at £70 each?
When did you last hear Aston Martin or Cartier apologise for being too expensive?
Everything comes down to perceived value, ie what an item means to the person buying it. A customer will apply a value to a product (handmade or not) in correlation to that product’s desirability to themselves, and in comparison to similar products produced by competitors. In short, the value and therefore ‘market price’ of a product is purely dictated by what a person is willing to pay for it.
Using your example of a luxury car, someone who desires a luxury car because of the feeling it gives them when they drive around in it will apply a perceived value that the car is a bargain. Someone who does not care what car they drive as long as it gets them from A to B will deem the luxury car to be too expensive because they can buy an entry-level car for a fraction of the price, which in their mind does the same job.
Someone who loves the feeling of wearing a one-off hand-knitted wool sweater will apply a perceived value that it’s a bargain. Someone who doesn’t care what they wear and goes to a high street discount store to buy a sweater will apply a perceived value that it’s a bargain because in their mind it does the same job for a fraction of the price.
It really annoys me when I see people put items online especially on Face book, Folksy and E… and the price is so low you couldn’t even buy the materials for what they are selling the finished product for. I know that a lot of people have shops as a hobby, but that can really under value the ones that are selling as a business. I know its all about people budgets, and the perception of what is good value, but when you add up time at an hourly rate ( even minimum wage ), not many people are actually making any money, in fact they are more likely to be loosing a lot of money what with the cost of electric, gas and raw materials these days. I just wish people would think about what they are doing.
