[Please note: Part of the content of this post was taken from an Etsy Success article. Items 1-3 are not my words, however I do agree with them. To read the original article, please click here.]
One thing I love about Etsy is the newsletters they send via email every few days. They’re always relative to the season, or trends, or current issues… Even though I don’t sell on Etsy I heart their newsletters because they’re super informative + helpful. Didja hear that? If you have a handmade shop I recommend that you sign-up for them, too. To sign up, visit this page, then enter your email address and check the newsletter boxes you’d like to receive. It’s super easy.
Below is an article written by Danielle on the art of pricing. There are many ways to determine a price for your handmade ware. Things like materials and time must be configured, but also keep in mind that all shipping expenses need to be covered as well {whether you have S&H fees or offer free shipping but add in the S&H expenses to the item’s price}.
My best advice is to put yourself in the customer’s shoes but add in your expertise and “behind the scenes” knowledge. Lastly, if you are confident with your product/policies, the price, and the overall look of your shop, your items will sell. Promise :] Don’t over think pricing or change prices frequently. Find a price that works for you (truly) and carry yourself with confidence over your decision.
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The Art of Pricing: Three Helpful Pricing Exercises
by Daniellexo
How do you know if you’re pricing your handmade work correctly? There’s a lot of info out there, including right here in our Art of Pricing series. The trick is to keep learning and evolving, not only in your craft, but in your pricing strategies, too. I’ve put together three exercises to bring focus to your bottom line. These exercises are here to make you think about your pricing, hopefully they can help you create a formula that works for you. I hope they help you as you continue to work on pinning a value to your items.
Exercise 1: What’s It Worth to You?
Imagine if you will, a complete stranger asks you to create an item (something you currently sell in your shop). That’s not all, they want you to photograph, list and promote this item as well. Whew! “Is that all?” you ask. No, they have one more request: package that item, print a shipping label and drop it off at the post office. Now imagine they want you to do all this for the price you currently have this item listed for in your Etsy shop. Would you do it happily? Would you grumble? Would you deny this task altogether? Reality check: It’s up to you to determine the value of your time and efforts. Make sure you take a step back from your work and your prices and look at it from all angles.
Exercise 2: Get to Know Your Customer
Close your eyes and think about the ideal person you would like shopping in your Etsy shop. How old are they? How do they dress? How much disposable income do they have? Do they shop online? What type of handmade items do they love? Now that you have a clear image of this shopper, ask yourself, “How much would this person spend on a unique item?” How do the prices in your shop compare? If this is a hard exercise for you to imagine, get a clipboard and hit the streets! Find someone who pops out to you as your ideal customer and ask them a few questions. Yes, I am instructing you to talk to strangers. Feeling shy? Get your local Etsy Team together to survey as a group.
P.S. If you are brave enough to do this, leave a comment below and let us know what happens!
Exercise 3: Number Cruncher
1. Decide what you would love your yearly gross sales to be.
2. Figure out how many items you make per week, and how many for an entire year.
3. Divide your gross sales goal by the number of items you can create. (For example, perhaps you work on your shop part time and you’d like to sell $12,000 worth of goods. If you make five items a week, your yearly total will be 240 items. Dividing $12,000 by 240 items would give you a $50 price point.)
This equation will give you a suggestive price. Keep in mind this is just an exercise, some items may be more and some less, depending on time and materials. Also, you (most likely) won’t sell every item you make, but with this average amount as an indicator, you’ll know if you’re on your way to your yearly goal!
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See what else Daniellexo has written:
* Shop Makeover: Titles, Descriptions and Tags
* The 21 Best Resources from the 2010 Business Blogosphere
* How to Offer Gift Certificates in Your Etsy Shop
* How-To: Sell Local
* Etsy Success: Launching a Product Line
[Please note: The content of this post was taken from an Etsy Success article. Items 1-3 are not my words, however I do agree with them. To read the original article, please click here.]
♥ Be sure and check out the rest of my blog/biz 411 posts.
I struggle with pricing services and products, as I tend to be a scrooge with my own money. I am always looking for the bottom dollar price on things I buy, and thus I have a difficult time determining the true value of products and services. I appreciate you sharing this article as I have recently been considering a new business venture and am trying to determine how to prices services and products that I will be offering. I want to make it “worth my while” while still being competitively priced. These are some great thoughts that will definitely help me in my thought process.
I think your focus should be on offering prices that make it worth your while. If you always strive to make your products “competitively priced” then you’ll always be “competing” with someone that’s not at the same place you are with your business.
Don’t let someone else’s prices determine your price. Instead, focus on how your products are unique/have their own style, the materials used and time put into the product, etc.
xoxo
This is helpful advice – thank you!
super helpful!!! Thank you so much!!!!
this is such a great article! thank you so much for sharing, it’s really going to help me get the pricing in my etsy shop down to a science…
As a shop owner, it’s easy to feel like your prices have to be competitive (ie, low). But I remember reading somewhere (probably in an Etsy newsletter article!) that your items won’t sell if they’re priced TOO LOW because buyers associate value in the price. If your item is priced too low, buyers think it’s not good quality or you didn’t spend much time on it (I know I’ve thought this when an item seems too-low-to-be-true). But I agree that sometimes it’s hard to find the “right price”. Just don’t sell yourself short!
This is such a great post. Thank You!! It is so full of great information that we can all use. I agree not to let what someone else has priced something for dictate what you will price yours for!
Pricing is something I have always struggled with. I constantly think I’m pricing things too high, and if I drop them and something sells, I end up losing money. Its a vicious cycle. I need to learn to stick to my guns about my prices and realize that there is a customer out there who will appreciate what I make and will pay the right price. :)
Thanks for sharing this!! This came at a perfect time for me :)
Yep, yep, yep … this was such a good article. I love their Etsy Success e-mails … SO helpful!!