Tuesday, July 24, 2012

Pricing Your Products

Etsy held a workshop on the Art of Pricing with speakers Tara Gentile, writer, business coach
and Megan Auman,  a designer, maker, educator, and entrepreneur

Here are some of the key concepts from that workshop:

  • Many women have problems with money or talking about money – practice with a friend
  • Learn how you can earn more by using sales
  • Important to set goals for gross sales, any number from $5K to $500K, write it down – this number is up to you (there is no right number)
  • Drop the starving artist routine and adopt the thriving artist routine
    • Create your best work and understand the true value of your work.
    • Match the right people with your work.
    • Make more money as an artist than you could be doing anything else because of passion, talent, and strength
  • People will find the money to buy what’s important to them – artist’s job is to find what’s important to those people.
  • Make your customers richer – not only by money:
    • Emotional wealth       
    • Intellectual wealth
    • Relational wealth
    • Environmental wealth
    • How did you feel when you bought something you were in love with? You felt richer on the other side of that transaction in some way
  • Make selling your greatest experiment = can’t be perfect – everything is an experiment
  • Use a prototype design or new technique incorporated into a piece to make it better and sell it.
  • Use what you have and what you’re working on to sell more, create more of what customers really want.
  • Be ambitious – create something fresh and innovative that furthers your greater vision.

To calculate pricing:
  • Start with profit - money that has a purpose beyond the day-to-day business and your life
    • Profit is the money to grow the business
    • Profit is the money to put in savings
    • Profit is the money to spend and money to give
    • Need to price so you’re profitable at the wholesale price point
    • Profit allows you to make your purpose a reality
  • Example: A pair of earrings
    • Material cost = earrings $5
    • Wholesale $60
    • Retail $120 - $140

  • People don’t buy based on formulas - Having a necklace that makes you feel like a rock star is a value
  • People buy on perceived value, not formulas, but the right formulas can help us
  • Profit + product cost = perceived value
  • Profit + product cost = wholesale
  • Profit and labor are NOT the same thing
  • Product cost = materials + labor + overhead

  • Retail price is for anyone buying your items on Etsy or at craft shows
  • You are not a sweatshop – you need to charge at least $20-25 an hour
  • Labor cost – hourly wage x how long

  • Not every piece will have the same profit margin
    • Don’t worry if you can NOT afford your jewelry
    • Not every buyer is motivated by price

  • The more value you can articulate through purpose, story, emotion, branding, the more people will pay
    • Use price as a tool for perceived value – the sweet spot of your price
    • Number of sales is NOT important – it’s the profit!
    • Profit gives you the space to do your best work
    • Make women feel more confident – grateful and not guilty about purchases.
  • Think about “What’s my purpose?”
  • Where do you want to go in 5 years for your business? Invest time and energy in figuring that out.
  • Visit Artofpricingforprofit.com

In the Q&A, there was an interesting response to the question about offering discounts and coupons:

  • Your pricing teaches people how to treat you – market positioning
  • Discount offers and policy teach people that your stuff isn’t worth the price
  • There’s nothing wrong with a coupon here or there – as long as it’s special, not the norm
Our teammate, Leah of magicbyleah created an inventory/pricing worksheet taking all of these items into consideration. You can request a copy and it'll be emailed to you. 

I’ve never thought of pricing in terms of profit, so I’ve raised my prices slightly. I'll have to get back to you on how it's working. 

What has your pricing experience been? 

Linda Blatchford
Jewelry Designer


  1. Thanks so much, Linda ... this is a wonderful article!!!

  2. Linda, this is such a good article! I am going to share all over the place.

  3. Great informative post! I need a bit of time to digest this - certaily lots of nuggets here.Thank you!

  4. Wow - lots of wonderful info on pricing! Thank you for posting!

  5. Wonderful article... So many on Etsy sell far below what their items are actually worth.

  6. I believe all artists/crafters struggle with pricing.. thanks for the information!

  7. Wonderful information. I'll come back and reread it. Good Stuff!

  8. yeah, pricing is hard, but wow, I definitely don't do my pricing like the one in the example. I think I need more time to digest too.

  9. hmmm some great thoughts.....I will have to consider this! For a Vintage seller like me it's a little different, but I do consider my gas and time hunting for new items to list!!

  10. I hope that my notes from the workshop help everyone. I'll be posting more on my blog, I'm reading more about pricing. You know how I get interested in a topic ...

  11. Great post, and these pointers is what every woman needs to hear. Thanks for another informative post. Have shared.

  12. Lots of very relevan info here, too much to absorb in one reading. I will revist this & Lindas blog often

  13. Wonderful article!! Thanks for all the info!

  14. Unique Cozy Treasures - Great tips! I find that I have to adjust my prices now and then until I find the sweet spot. But mostly I've found that people are still looking for a deal of some sort. Etsy is getting more well known these days, but it would be nice if they would use some of their revenue for advertising. :)

  15. Great post. I am going to have to take time to read it through again and digest all this wonderful information. Great job Linda!

  16. Thank you for laying this information out for us!

  17. Thanks for putting together! It is great information - and something I need to work on!

  18. What a great post! I have so much trouble with pricing, so it's always good for me to get more information about it.

  19. Great article. I wish this applied to photography as we are in a whole different ball park!

  20. Thank you so much for this blog Linda! I need to definitely keep working on pricing.

  21. Thank you so much for your time to share with such a great article and great info.

  22. Oh, very good post! Thank you both Linda and Leah!

  23. Great blog! Really sums up all the important information to know as an etsy seller!

  24. Linda this is a great article. Pricing is probably one of the hardest aspects of a business. But critical, so this is wonderful information. Thanks for writing this!