I loved this article about handmade pricing issues. I make handmade jewelry and know that I have under priced many items. I began making jewelry for some party favors that quickly turned into a new hobby, which has now developed into a full time job and beading obsession!
Because I have mainly sold on Etsy until recently, my low pricing was a necessity because there is too much competition and dilution regarding jewelry items. For instance when I began, there were a gazillion Twilight charm bracelets. Today’s search only yields 223, of which only 1 of my designs shows on page 5 of 6. This is because I removed “Twilight” from my tags and titles to avoid trademark violations with that term (a topic for another blog post). Therefore a person searching for “Twilight charm bracelet” won’t see me in the search results because mine are tagged “vampire charm bracelets” or some other derivative.
Now that I’m transitioning from a hobby to a full time business and putting eCommerce directly onto my website, I am adjusting the pricing at my site. My new price formula will more accurately reflect a desirable hourly pay rate when factoring in my time. I will keep the same pricing of previously listed items at Etsy, but it will be the fresh pricing model for brand new items and collections directly on my site.
I think those of us that make handmade items get suckered into the feeling of offering “friends and family” pricing. We keep a hobbyist mentality, instead of using our business sense the same way that we do regarding regular hourly employment. This is either because of our own uncertainty due to inexperience and confidence or because customers complain about our items being too expensive. (This much chagrined statement comes to mind: “I can get this for $5 at Wal-Mart” – admit it…you’ve heard this one before).
If you work for a business for more than a year, you generally expect some sort of raise in salary. In the handmade realm, however, you are responsible for pricing to include increases for cost of living, supplies, shipping, packaging, breakage, liability, overhead (if you sell at craft fairs or have a store front), etc. Too often we try to be the nice guy or maybe we’re just assuming a value (you know what they say about that)…and we undercut ourselves to the point of not making a genuine income.
Research your industry, be vigilant about your SEO keywords, join handmade groups and communities to see what your peers are doing, read trade magazines and invest in training to increase your skills. By making yourself more skillful and knowledgeable, you can build your confidence to more accurately price your products, which in turn validates your authority to create a respectable income for yourself.
Have a sparkle-riffic day, everyone!