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Pricing

Get your pens and paper ready for your workbook if you have it I'm going to actually give you the pages where the extra information is on the workbooks and we're going tio get right to it because there is a lot to get to during this segment because I want tio try an experiment at the end of our segment so we are going tio zooms in through but if you have the workbook I just want to say that the parts for the small object photography starts on page sixty seven and that there's places in there for notes for you to add in anything that you want to remember from when marlo was teaching and also that you can download her additional information from the web site when you make the purchase that comes with extra marlowe bonus gettys so we're really excited about that so we're going to dive right into it foundation building we're going to talk about pricing value in sales, packaging your workspace tying it all together and then we're going tio help a member of the studio audience right an item ...

description revamp an existing I didn't description so I want to start with pricing because this is something that really stops a lot of people in their tracks and I want to say from the beginning that there is unlimited resource is I'm figuring out how to price your goods? It is one of the most popular topics when it comes to starting a handmade business and I want to say but what I think is the most important thing about pricing is at the end of the day you're happy with what you're charging you could make it very, very, very, very complicated um or you can figure out how much your stuff costs be very factual about it decided for happy in charge that my recommendation is that you always charge a little bit more than you're comfortable with so these air like philosophical approaches but if you think that your item is worth for example twenty dollars I think you should consider charging twenty five or twenty seven let your customer tell you if it's too much let them not purchase from you and cite the prices as the reason if they think that that price is too high so it's really hard for us to place a value on our own work because we're often too close for it it's sort of like what leslie said earlier I really like a bargain I don't want to charge you too much, but you're not buying from yourself so it doesn't matter what you think about you know the item prices long as you're happy with it because it's not a bargain for you if you want what you're making, you're just going to make it so it's such a bargain for you it's free, you know so when it comes to pricing, I know there's a lot of discomfort around that because people think about money and then they automatically they're like, click, click shut out or they just, you know, move on because it makes him so uncomfortable, and they think that cheaper is better. I'm here to tell you that the less expensive their products are it's sometimes the harder they are to sell, just like if you think about services, the more expensive something is, the less likely people are to complain. Also because those people really feel like they're getting value for their dollar because you started out by saying, this thing costs this much, people pay that much, and then they get it they're like, yes, this is a forty dollars, ben and I agree or you say, you know, this is a dollar pen and then when it doesn't work three days later, they're like what? This was so cheap, this was the worst and in the world, so you're actually telling them somewhat what to think about your product when you tell them how much it costs. So if you come to the price that you're really comfortable, say, twenty dollars, bump it, never stay at a place where you are one hundred percent comfortable always make your price is a little bit higher, like a stretch goal it's much easier to eventually reduce your prices than it is tio significantly increase your prices. So if you're finding out that you're selling all the time in your stuff is like selling out, selling out, selling out that's a great time to raise your price because you've created a demand and people are going to pay for it. But if your product is a certain price and it's only occasionally selling and then you bump it up, people are going to be like what? Why did that happen? That's you know, it's been around for so long and it's always been this one price and now it's a lot higher, so figure out where you're comfortable and then raise it, and that is really some of the best advice I have. As far as your prices go, make it as high as you can possibly stand it and start from there. You are in business to earn money, and I'm just going to be a plain talker about it. It doesn't, it does it won't work for you to give away your your work at the lowest price possible. It's not sustainable. We're not going to be able to create a business or make your big intentions if you're not taking your finances and your prices seriously. So there's a lot of different formulas you confined online that will actually help you price your goods and I encourage you, teo, explore an experiment with what those formulas are and find when that matches what you want to pay and the workbook starting on page seventy one I have a worksheet for pricing and item the things that you need to take into consideration when you're determining what your price is going to be. I want you to think about all of the materials that you use. I want you to think about the time that it actually takes you to make the products and I want you to think about paying yourself, which is a really novel concept to most people who make things by hand. They think that just by selling it, they're getting paid that if this cost twenty dollars, they're getting paid twenty dollars, but that's not true because it costs money to make this product. So I want you to build in payment for yourself if you are going to be a good boss for yourself, and if you are going to own a profitable business that can help you cross the finish line of your intentions and get to where you want to be, be firm, be reasonable and be brave about your pricing don't joke around with trying to think, well, if it's more affordable, more people will buy it that's up free that's free to determine later if you're not selling well, one of the things you can experiment with this year prices but you need to start out strong to say to stay strong. So also in the workbook, when we get past these pages of them different different things to think about when you are pricing your items, you need to think about money in general, your big picture money, how much money do you want to make and whether your income goals? If your goal is to make a million dollars a year and you are selling something for one dollars, that means you have to make one million items. Can you make one million items? You have enough time for that? I don't so that's a lot of photography, so I mean, that would be a lot of time to spend making a million dollars if you were selling everything for dollar, which I know is a very general and brought example, but you need tio take these. Take these facts of your life into consideration when you're deciding how much your your products cost, and if you are not real with yourself about money, no one else is because no one else can figure that out for you if you are not ready to take money seriously and what kind of income you want to earn. What kind of lifestyle you want to have and how much money you need to make that happen? And then how much of that you expect to come from your handmade business? Then I suggest you go back to the drawing board or that you just experiment for now and and mess around with things, but that you don't. I have high expectations for making a living because if you don't take your products and your business seriously or customers aren't either, so ok, so I want usto wow, I, like never feel like so firm in general, like you need to know your base expenses in the time invested, and you also need to keep track of your heart to see costs. That could be if you were buying a daylight light ball before your photography, even though the cost of the lightbulb might not be factored into the earrings you made that is one of your heart to see costs the cost of your internet that you used tio run your online shop, the cost of your packaging materials like what are your hidden costs? The costs that don't go into directly making your object, but that go into selling your object that is money you spend and money that you need to recoup, I also know the market. And you can know a lot about your market by knowing where your ideal customers so let's face that we could go. Teo, a machine at the grocery store put in fifty cents and get a necklace that comes out in a plastic bubble that cost fifty cents. Or I could go online right now and find necklaces that cost thousands and thousands of dollars. There's room for you and your product in this marketplace, you just have to find the right market to sell it. Tio, somebody wants to buy what you make, but you have to make it available for sale. So know your market. Know what? Your market generally pays for the kind of items that you want to make and see where you want to fit in on that scale. Do you want to be at the top? Do you want to be in the middle or do you want to be at the very bottom? Check out who's selling what at all three of those levels and find the spot that is best for you. Also, think about your perceived value. This is how you can justify how much your items cost and justifies a little bit of ah of a loaded word, but this is how you can further show your customer. That the price you are asking for is reasonable in your present, your perceived value comes from a lot of different places that comes from excellent photography. They can see that you have put a professional spending an angle on the product shots that you're taking. This comes from your online home, from your social media efforts from your branding, all of these tie into your perceived value and the impression people have about you and your work and the value that comes into play when you are charging people that is not directly associate id, so how much the item costs that makes sense? Okay, good, this is wonderful, so I'm going to show you to pricing formulas that are pretty popular, but we're not going to stick. We're not going to stick on the formulas for very long because you really need tio experiment and figure out what works for you and this might not work for you so it's not a catch all solution that's going to work for everyone. I want to state that right right away from the get go, but let's, see? So before we get to that, I'm going to tell you that in the workbook there's a chart to help you keep track of your prices in your profit if you want to have a successful business than you need to be interested in and making a profit and you could make a profit by making sure that you're charging enough money for your items and that you're covering all of your bases. So there's a great work, she did not. That will help you figure out how much. How much? What is the item? How much does it cost you to make? What is the wholesale cross? What is the regional cost? And then what is your profit? On top of that, your profit is what helps you build your business and keeps you afloat. So your profit is it's, not negotiable, and I want to make that really, really clear. You're not doing anybody a favor by under charging for your work. When you under charge you for your work, it hurts all of us. It hurts our community because if I may, it worked really hard to make something and I know how much that costs, and I put a fair market price on it, and then you come along, makes something similar talked to the same ideal customer and you undercharged for your item. You are hurting me and you are hurting our industry, and you are hurting yourself by under charging for your work by teaching our customers that this work isn't valued at the at the actual price that it is and that's a really important thing to know his hand makers we make art we make things that come not only from our school but from our hearts and it's hard to put a value on that skill but it's easy to show people what that value is and the one way to convince them that it is better to shop handmade than it is to shop commercially is by charging fairly for your work so I would like everyone online to promise to charge fairly and teo make an online pledge but they're going to price their work fairly so that they can make enough money and so that we can all make enough money because we're in it together so I hope that that that that's very clear yes ok so pricing formulas here is one that is pretty popular your product materials plus your pay that's how much you're paying yourself your hidden expenses your light bulbs, your strain, your whatever you've got there your gas to get to the post office your profit that you want to make and that that would equal your wholesale price that's how you would sell it to retailers if you wanted to have your items and shops if you were just going to sell this directly yourself, you would take that total and times it by two and you would get your retail cost another one that I think is really easy to start out with is your product materials plus your pay times it by two point five and that's your retail cost. I now suggest that if somebody is going to do this bottom one that you just automatically times that by fifteen to twenty percent and then see what you get and that's where your stretch goal for your price comes into play. Take the price you get with your formula. Add twenty percent. Start there. One of the things you want to do if your items aren't really selling is test your price how do your prices compare against your market? Are you being undersold? If you are, you might want to try a different venue or a different way to market to your customers at the place where you have chosen to set up your online home is constantly under selling you in your market or in your category go somewhere else. It's not the right part, it's not the right place for you to sell your work. Can you raise your price? The answer is always yes. So remember that. How do you feel about them? How do you feel about your prices when you put it out there, do you think to yourself? This is good this is good. I would I would I would feel good saying this price out loud to somebody or do you feel like everybody is going to get a really great deal or do you feel like, well, I don't know how this is gonna work? I don't know how I'm going to make a business at this price point. S so how do you feel about your prices? Can tell you a lot if you're a little bit nervous about it. Good are your prices aligned with their ideal customer? That's a no brainer by now? Hopefully we've all, uh, talked about that enough to where we feel really comfortable about knowing where ideal customers and how much they want to pay for what we have. But I think when you are pricing your items I want you teo china, to put your ego into it so much the value of your product is not the value of you and that's really harm to remember. Sometimes it is really, really hard to remember you are not selling yourself when you put your items online you are selling a product. You are not for sale. What you make is so not every person is your customer. Are you ladies agree? Yeah, I wanted tio dive into this conversation a little bit, yeah, come on in, okay so I was told that if you're if you're happy with if you're comfortable with their prices then they're not high enough yep raisin you should be on you to be a little bit uncomfortable and then I've also heard that if you can afford yourself it's, your prices are too low not sure how that I don't know how that necessarily I think the thing about that I think there's a good vibe to that I mean it does it does make sense to me we're not always our own ideal customer if you I think it is good to be a little bit like about your prices because that shows that it's it's worth it and I don't think there's anything wrong with it so I know that as a photographer that's a different service than what him makers offer to assist to a certain extent but still like you are not actually your photography it's it's definitely challenging if you can remove your ego from that but think about who you really want to sell to and where you where you want to go, the prices of your products can take you there and they can help you to work less they can help you to work better they can help you to work smarter they can help you to work in batches if you're if you're pricing your work fairly and if you're way way, way out of line you're going to see here that out fast so you can pivot or just whenever you need tio but it's much harder to adjust and keep your product the same to go up that it is to adjust your product and keep it safe and go toe a lower price so start high feel a little bit uncomfortable about it and move forward and if you need to make some changes make some changes all right? Well, I have marcia in the chat room who's saying I'm promised in front of all of these witnesses good not under charge eggs right? That's what I want to hear because it it hurts everybody and hurts everybody is anybody experienced that yeah people are nodding but not not speaking up ok, well I'm going to start calling on you guys directly because we're all in it to win it here so not every person is your customer and if somebody says something to you about your prices at a show or send you an email or asks you for discount or says they saw something similar somewhere else and it was cheaper if a somehow try tio manipulate you or make you feel bad about your prices I want your first thought to be that it's not my customer, that person is not my customer they're not a bad person they're you know they might not even be chief they just might not have a value and not place a value on what you're selling and they just want something less expensive I'm sure we all purchased things that we don't care so much about the quality we just get them because we need that particular item and the price point is right for us and we're not expecting tio will it to our children someday or tio pass it on it's just what we need for right now and that's the price that it is in great you know, if you are selling something that you make with your own two hands right away that makes that product valuable you are already starting out with a valuable product no matter what it is. So if somebody tries to give you some flack about about their pricing to say, you know you could there's lots of things you could say but my favorite is I'm glad you have so many other options I'm glad you have so many other options because people are always paying you strictly because they love the item it's also a convenience factor there standing right in front of you and they need a birthday present and they haven't seen anything else that they love. If somebody tries to make you feel weird about your prices or ask you for further discounts just say that's great that you have so many options I actually did a little crowd sourcing on twitter before this course asking people how do you handle it when people say could you give me a deal that shows because this happens a lot people go to craft shows and they feel like it's a yard sale and like it's ok to walk right up to your table and say if I buy two can I have a deal you need tio know what you want to say to people if they talk to you about your prices beforehand and how you want to handle that so you can have something snarky to say or which I don't highly recommend but you can figure out what you want to say to that person but stay firm stay firm you don't have to change your prices if if you make something and somebody says if I buy two can I have ten dollars off the answer's no you made this by hand this isn't some mass produce product that you have a million of in your garage and you're just trying to unload as fast as you can if you budget how much inventory you need to take to a craft show and you are expecting to make ten times your booth fee if you start discounting your products you are not going to reach your financial goals so this person would be stopping you from from helping you get to where you want to go and they're not going to look at it like that because they're thinking a zoo customer and you need to think is a business person not as a person you feels vulnerable about putting what they make out into the world um it's not your job to make every person happy I know I've said this before and I'm going to say it a lot of times because it's really easy to just stop there so you're a little bit of criticism or to feel battered to get one bad comment we're to have somebody to comment on what you make like oh I could do that you know that's fantastic you know none of us are like actually wizards making stuff purely from magic so you know, sure other people could do that it's true just look at it as a as a statement of fact versus anything threatening because that's not what it is and lots of times people are looking at handmade goods because they happened to be a handmade person themselves they already value that that's why there was he to begin with. So chances are if somebody is visiting you at a craft show we're looking at your work online it's because they understand intrinsically the value of working with handmade items or buying handmade items that's why they're attracted to you to begin with on some level so perhaps they have something to say about it sales and value when is it a good time to discount your items? Anyone wholesale that's not really discount them, though that was a wholesale price that's fair that's still has profit built into it for you yes when you have too many of something you want to get rid of it really? I think the only time I actually discount my items is if they've been in my shop for a year, so at the year mark then I mark them down just to get rid of them because they've been slow sellers but for the most part don't have sales or discounts really, I'd like to offer an extra bonus like I'll put in free stickers or free postcards or some extra things, so they think they're getting like a special gift. Well, they are getting a special gift uh, but I don't release my prices really right? I don't recommend reducing our prices as faras sales go what I would say if you had a lot of items you wanted to see it to sell, you could package these two items together and offer a different price then you would if they were individually priced, so if you had a surplus of bracelets and you wanted tio, get rid of them and your bracelets normally cost fifty dollars I would maybe put two bracelets up with a marketing slant that is four sisters air for mother's day or something like that instead of selling two bracelets for one hundred dollars, I would sell two bracelets for eighty five dollars, or something like that. So people are getting more value. And you're not taking that much of a hit. When you make something by hand, its value doesn't decrease because you made it by hand. And you need to remember that you have years of education, skill, time, practice, bravery, courage and hopes all going into the items that you make. And that adds up to success when you're getting your pricing. So really think very, very carefully about having sales and discounting your items, and the message that it sends to your customer, into the world about the value of handmade.