Thinking of travel.

Tuesday, February 7, 2012

Great words of Wisdom on Pricing

Every once and a while, when I browse the forums, I come accross tidbits of wisdom.  The other day I opened a forum thread written by Pamela Trow-Johnson from Bend, Oregon.   Pamela is an artist and designer who serves the etsy community with her supply store "Artspassionsdesign"  found at this link: . 

Pamela also creates beautiful stationary that speak emotions, greetings, happy wishes and  wisdom.   This etsy shop is called "Artifactori,"  and it can be found here:
These are her own words.   Read and enjoy.

Set of 8 Blank Enclosure Cards and Envelopes for Jewelry Designers

As a branding designer in my day job, it always upsets me to see sellers who aren’t selling, lower their prices thinking that will solve their problem. In truth, price is only one ingredient in your recipe for success. 
Many folks think a brand is a logo when a logo is only the visual representation of the brand. Brand is a perception in the mind of a buyer that keeps your product or service first in their thoughts when they are ready to buy. Price is just one of the components of that perception.

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But this post is about pricing, so, here’s my 2¢ worth:

1] GET REAL ABOUT YOUR RELATIONSHIP WITH MONEY & SELF-ESTEEM. Money is money. It’s a wonderful thing to have. We are not defined by it. It’s fuel to get us were we want to go and it sustains us. Having money isn’t based on our “worthiness”. Get honest on how you look at it and choose to develop a healthier perspective on it. I will say this, if you don’t change your attitude toward money, you’ll never have it.
2] PAY ATTENTION TO ALL ASPECTS OF YOUR BUSINESS. So many other aspects of your business reflect the quality of your product, which then confirms the appropriateness of your price:

a] Are your photos reflecting the true beauty of your product and are they truly showing the product? (i.e., are you focusing on everything around your product rather than the product? is your product too small in the photo, is your photo honest?)
b] Is your logo, banner and avatar communicating the same level of quality and “flavor” as your product? (i.e., does your font match the style of your product, is your type legible, is there a disconnect with the style of your logo to your product?…such as selling clean contemporary art and having a country look to your banner?)

c] Are you being clear in your descriptions and including everything a buyer will want to know? (i.e., are you providing sizes?…this can qualify a price, with vintage…are you showing any defects or hiding them?).
d] Have you differentiated your business? What do you do or offer that makes you and/or your product unique? If you offer and do what 2,000 other shops offer and do, why should a buyer buy from you, no matter what your price? (ways to differentiate include having a particular style or a way you do business).

e] How is everything else reflecting your brand: packaging, policies, customer service, to name a few? (i.e., are you selling a high-end item and packing it in a generic box with no brand identity on it? are your policies written with a lot of “don’ts” rather than “do’s”? are you answering your convos quickly?)
Set of Three Blank Congratulations Raccoon Greeting Cards

3] KNOW YOUR AUDIENCE. Don’t try to be everything to all. If you sell to a more “general audience”, it will be more difficult to stand out in the crowd. Niche markets are good. It helps you in figuring out where to sell and helps you with pricing. This also aligns with differentiating (2d).
4] RUN SALES TO PROFIT NOT TO SELL. As a buyer, everyone loves a sale. As a seller, if you do sales often, you’re training your buyers to assume they can always get your items at a price-off. That’s not the perception you want to give. Keep your sales truly SPECIAL. Don’t necessarily follow the pack and run sales on holidays. Run them when they’re least expected so buyers are constantly coming back to your shop. They are likely to do a more immediate buy if they don’t know when your item will be on sale. Buyers want to feel they got a once-in-a-chance buy. Think about many times have you joyously shared a story of getting an unbelievable deal at an unexpected time?
5] LEARN TO PRICE TO PROFIT. I believe pricing is a mystery for so many sellers because it’s left-brain, not creative and they just don’t know how to do it. Well, pricing is strategic...concrete...formula-matic. Do a keyword search in the forums with “pricing formula” and you’ll get what you need. Once you know what your profit margin is, don’t lower your prices where you can’t stay in business...because you won’t! I’ve read threads where sellers have said they have lowered their prices to the bare minimum. So, even if it creates sales, you’ll never be able to increase your prices without creating a bad perception in the mind of the buyer. And by the way, once you have a good pricing formula, don’t overlook what is called, perceived value. Your formula may say you can price an item at $100 but if your item looks like it can sell for $125, then price it that way.

6] BENCHMARK. Check out shops that sell in the same category as you, that you consider SUCCESSFUL. Can you apply any of the ways you think contributed to that success to your shop?
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Here comes the trains.

7] EXPAND YOUR DISTRIBUTION SOURCES. Etsy is a fabulous place to sell. But it’s just one marketplace source. This is an area to expand your business knowledge. Check out other online marketplaces, check out brick and mortar shops (as long as you can afford to sell at a wholesale or distributor price,) create your own ecommerce website. Consider craft shows but make sure they attract your audience (i.e., don’t consider a low-end flea market if your items are just won’t sell AND don’t even consider lowering your prices to sell in another market.)
8] EDUCATE THE BUYER ON YOUR PRICING. How often are we asked to sell something at a lower price because basically, a buyer can't afford it!?! Well, THEY ARE NOT YOUR AUDIENCE. Don't feel bad that you can't lower your price and don't lower your price because you think you should. Just have a standard considerate reply explaining your price reflects the quality of hand-made product it is. Reducing your price would prevent you from staying in business and doing what you love. Thank them for considering your product. PERIOD. DONE.

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Something for the computer whiz.
9] DON’T BE HARD ON YOURSELF + GET HELP. We are in this business because we love to create. But once we decide to make our passion a business, we have to take on more than we enjoy doing...we create, research, produce, sell, account as well as run families and try to have a life. Do you have to do it alone? What can you get help with? Etsy forums, the internet, libraries and business organizations are treasure chests for info. Maybe start an Etsy team in your city and actually meet monthly to get support from each other. Is there a student you can get help with production?
Apply your creativity to solving all kinds of problems.

I hope this helps anyone considering lowering their prices. We’re in this together and I wish you the BEST! Pamela
Set of Three Blank Get Well Greeting Cards
Get Well.