Wednesday, July 8, 2009

Pricing

I'm in the midst of a quandary about how to price my goods. I try to set a price that I would feel comfortable paying as a buyer but also pricing high enough to make a profit on what I'm selling, not that I've been selling much of anything lately anyway. Some of the things that I make don't cost a lot to make and don't take a whole lot of time, but if it's priced too low, does that make people feel like it's 'cheap'? As in poorly made? Do buyers see a perceived value in things that are priced a little higher? I see things on etsy that I know exactly how much it costs to make and exactly how long it would take to make it, and then I see what to me is a fairly high price for it, and then I also see that buyers are buying it, so it makes me wonder. A good example is a necklace like this:

Very pretty and priced (and selling) at 39.00. Now, I'm not sure how much the chain costs, lets say less than 5.00, and I know the flower is less than 2.00, because I've bought some from a seller on etsy. So, all you have to do to make this necklace is drill a hole in the flower, put in a jump ring and put in on the chain. You may also have to cut the chain to length and put a clasp on it, but I'm thinking 10 minutes to make, and that's a stretch at that. So, let's say 7.00 in supplies and 10 minutes of labor and you're making a pretty good little profit at 39.00 a pop. Now, would I spend 39.00 on such a simple little necklace? Um, no, but that's just me I guess.

Well, I have my own version of this necklace, where I've sugared up the flower with glitter, but used a ball chain which is cheaper than other chains. So, I had this necklace priced at 8.00, thinking that buyers would jump at it, being such a reasonable price, but then got to thinking that if they'll pay 39.00 for a necklace like this, maybe 8.00 is just way too cheap and they need to see a higher price before they'll buy. So, I've raised the price to 12.00, feeling kind of like I'm ripping buyers off with such a high price (to me anyway) for such a simple easy to make necklace.

I went through my shop and raised the price by a dollar or two on a lot of things yesterday, so we'll see if higher price=higher percieved value or not.

I'm also thinking of getting away from just jewelry and trying some other ideas, like the embroidered hoops in yesterday's post, but it's hard to spend money on new supplies when money is so very tight right now. I know over the course of my etsy career I've wasted huge amounts of money on supplies for things that didn't sell or didn't come out the way I had envisioned. Good thing I can write all the mistakes off on my taxes, though!

3 comments:

Meghan said...

I showed my boss these necklaces with the flowers on them, and she loved them. Do the flowers come in any bigger sizes, for a larger necklace??

geelizzie said...

Meghan, those ones in the pictures are about the biggest they come in, the flowers are about 1 1/2" across or so. There are some sellers who take these flowers and combine them with beads and chain for some really pretty necklaces, Luxedeluxe is one seller that comes to mind.

DancingMooney ♥ said...

As for pricing... That's a tough one, and I've still not figured it out myself. I also price things based on what I think is a reasonable price to pay for them, considering my time and materials. But I also know that in this economy, if I want to make a living, it's made me feel like I needed to value my work a little more.

I've started to look at it like this. I'm not in business to rip people off. My goal is to provide a quality product for an affordable price. Does $8 and $12 make a huge difference? Well, sort of, yes. I think for necklaces, no matter how simple, they should always be priced at, at least $10. Simply because at that price (or even a little more for something easy) it's still a fair price to 'buy' it, rather than go through the trouble to find the materials and make it ourselves. For $39... I'd think twice. Well, I wouldn't think at all, I just wouldn't pay that much for something that simple. Period. But that's just me too. ♥

As for having more than just jewelry in your shop, I know first hand that it all works out just fine with time. I've dabbled in so many things, listed and deleted so many damn things I could kill myself (for spending money on dead end ideas and supplies... goodness do we sound alike or what?!) but in the end, that's the only way you're going to find that magic idea that sells, and makes you happy.

If what makes you happy changes with time, so be it. Just do what you love... the rest will follow.

I had a separate soap shop last year at first, but I decided to close it, and when I did finally list the soap in my DM shop, it sold right off the bat, no questions asked. I think you've built up enough feedback and reputation, that whatever you create, your customers will be excited to see something new in your shop... all you can do is try it and see what happens!
:)