The Great Pricing Debate

{{by jasfitz}}

by guest contributor Shrie L. Spangler

I became interested in the pricing debate after reading IndieMade’s coverage of Pricing (Hobby vs. Business). There are generally two types of handmade artisans… those who are creating their awesome handmade goods and selling them as a hobby, and those who are buckling down and trying to make an actual decent living peddling their handmade goods. These two factions present somewhat of a sticky situation, and can create a pricing dilemma.
Hobbyists can, and will, price their goods based on “what they want to get out of it”. In other words, if someone bought their embroidered art piece for $15 and they only paid $4 for the materials (regardless of the time and craftsmanship it took), then they’re thrilled! In reality, if it took them several hours to complete, that pricing strategy may not make them a lot of money or establish them as a professional in the handmade goods market, but they’re getting a little moolah in their pocket while doing something they enjoy. So in theory, everyone’s happy.

On the other side of that, handmade sellers who are supporting themselves (and sometimes others) with the income they generate from sales have to use a lot of math, and practice a lot of self-confidence, in figuring out what pricing will ultimately work for them financially. Labor, cost & quality of materials, marketing, insurance, business license fees, taxes and more all come into play when sellers are trying to carve out a place in the online marketplace for their brand. In this case, the artisan may have to charge upwards of $25 for that same embroidery art piece just to make a buck, and that pricing strategy would be TOTALLY warranted.

There’s absolutely nothing wrong with making and selling for hobby, and there is just as little wrong with pricing higher to try to support yourself! But sometimes, new handmade sellers often make the mistake of pricing their items either too low or too high, therefore attracting very little buyer attention. They sit on the pricing verge, straddling that line between low and high pricing, and not really positioning themselves to stand out.

And this is where I fit in. I make things because I have to. Because my hands and my mind and my heart tell me to. I sell things on Etsy because I have this inventory of items that I’ve made, and you can really only give away SO much of it before people start turning it away (What? Aunt Nancy doesn’t want anymore of your first run crafting disasters! Say it isn’t so). I’ve had moderate (slow) success as of yet, but I still remain involved in local Etsy groups and I remain visible in the online handmade arena in hopes of networking with some crafting luminaries and learning new tips and techniques. I never considered myself an artist, but now I have this thing that I can do that approaches what some call art, and that feels good. So the dream of supporting myself with my art is in the forefront of my mind. As I create and sell more, I become more focused on taking the steps that I need to in order to make it more of a reality, and pricing is a key element in that formula for success.

IndieMade made some super helpful suggestions for folks like me about how to be successful, even though your prices may seem to be higher than some of your competitors. They’re spot-on ideas, and could make the difference between thriving and struggling.

1. Stay original.
2. Differentiate yourself with quality and craftsmanship.
3. Run your business like a business.
4. Diversify your business by expanding your sales channels.
5. Get your own website and stop competing.

In the same vein, Amanda Steinberg of DailyWorth.com isn’t afraid to tell it like it is, in regards to pricing and profits, and for good reason. She has some great tips for figuring out how to price items, and how to turn that into real money that one can actually live off of. Also, over at Crafty Pod, the ever thought-provoking Sister Diane sounds off about raising her prices, and is making a lot of sense too on this issue.

The art of pricing has also been a hot topic over at Etsy’s blog, The Storque, with a list of three tips to help Etsy sellers price their items correctly the first time, and created quite a stir of opposition. The math and logistics of pricing was covered on a much-cited Biz Ladies post on Design Sponge. Megan Auman, over at Crafting an MBA, shares similar tips as Design Sponge in terms of pricing, and expresses her thoughts on the culture of pricing on Etsy and what it means to the sellers. It seems as if handmade pricing is at the tip of everyone’s tongue lately, and with good reason.

Here’s my tips on the subject:

1. Scout the handmade market feverishly (and not just on Etsy!) to find out what the market value of your work is.
2. Talk to other artists, if you need to. They’re usually more than willing to hand out some sage advice, especially in regards to making money for yourself with your own art.
3. Do the hard work and research, be honest with yourself and stick to your guns with your pricing. It’ll go a long way into turning your handmade dreams into a something a little more tangible.

Now get out there and PRICE!

{{by lydiafairy}}

About the contributor: Shrie L. Spangler writes over on her blog, Lo & Behold as well as guerrilla candy and another rainy saturday. And she’s got her own Etsy Shop. She’s one busy lady.