Question 3 of 10
Pricing gets every business owners at some point. Pricing to low or to high is always a problem. Finding a middle ground is the key. See what Lisabellah, Jane, Barry & Anne have to say about this.
Pricing is the hardest part of running the business. Some items if I charged by the hour I would have to price the item extremely high. I have to take my tax, national insurance, personal liability insurance, cost of goods into consideration as well as my earnings. I try to work at an hourly rate but do come up short regularly but I wouldn't want to be doing anything else.
My pricing has changed over time. Like many people when I first started selling I underpriced my work and was almost giving it away. This is now my full time business and I need to make a living.
I have learnt that I can't afford to make one off items to frequently as they would be too expensive. I plan a collection of work and once I have developed a new item I work out how long it takes to make several identical items. Often quicker than making one at a time.
I have an hourly rate and work out the exact cost per item both in terms of time and materials. By making the same item a number of times I can afford to forget all the experimenting that led to the development of the item whereas with a one off item I need to cost it in.
When deciding on my hourly rate for making, I take in to account all the time I spend marketing, admin and selling which needs to be covered.
From the outset I decided that I wanted to make my prints affordable, which is why my edition size is a bit larger than most fine art printers. But it still gives my products the exclusivity that comes with buying a limited edition print and my pricing has remained pretty consistent over the years.
Our prices have increased slowly over time, simply because our time has become more valuable, so we price everything based on making time plus the cost of materials. I remember when we started, we didn't charge for our time at all and it wasn't easy making a living that way.
We've never arbitrarily hiked our prices, though, and we've always said we'll never do that - but prices have increased as our jewellery has become more complex. At the start of 2015 we stopped making anything with silver-plated or base metals and are now exclusively sterling silver. That meant our prices increased a little, also.
How do you about pricing your products and has this changed over time? Share your reasons in the comments below.
This post is part of a 10 week interview round-up. This is question 3. I interview 4 Top Best-Selling Folksy Sellers of 2014 who share their business insights & experiences for success. You can read the introduction here. Follow along & also share your answers to the questions in the comments too, along with your shop's url. Catch up on the past questions: Question 1 Question 2