The Art of Pricing

 Anatomy of a Cost Effective Project

1.  I found it very generous that this author was giving herself $20 per hour as a crafting wage.  This is good, because you have to make your time valuable, but I also think that you must price things in a way that is attractive to the customer.

2.  I question why this seller decided to buy so much material in bulk before she was sure of how successful she would be in making this item.  If she would have put more time in to prototyping, I think she wouldn't have made this mistake.

3.  I learned that it is important to make sure that the craft you make isn't just desirable to the customer;  the amount of materials and manpower used must also meet your needs as a seller.

Theories in Discounting


1.  Discounting is a lot more involved than it looks, and really is a marketing concept rather than just a way to price items.  Methods or types of discounting can appeal or deter customers because of psychological reasons, and different customers may react to discounts in certain ways.

2.  I think that using the Free Shipping option is a great way to entice customers.  Paying shipping is one of the things that often discourages me from purchasing, but offering free shipping makes it seem "easier" for me to shop.

3.  Using etsy teams or groups sounds like a great way to run promotions and discounts.  These group discounts make more of an impact than a one seller sale.  Additionally, everyone can share in the work to promote the stores.

Three Helpful Pricing Tips

1.  It is very important to remember that a big part of item price is what your time is worth.   Not only does this make your prices more realistic, but you will be able to focus more on items that you enjoy making.  Making items you like means you will feel better pricing them in a way that is realistic and not overly high just because you felt like you went through a lot of trouble to create the item.

2.  Knowing your customer is the most important way to price.  This made me think of finding your niche and target market.  Example:  if you make diamond jewelry geared towards fashion students, you may not have much luck.  They may love your designs, but you also have to know how much money they can spend, and diamond jewelry probably doesn't fit into a college budget.

3.  Working backwards to find item prices was something I have thought of with ebay before, but never etsy.  It is very suprising to say, I want to make this much per year, and then divide by your items to see how much each one should cost.  When I did this on Ebay, I realized that I either needed to sell items for more or sell more items.  It is a way of facing financial reality to keep yourself on the right track.

You Get What you Pay for


1.  Part of what determines your pricing is what you believe your creativity is worth.  I think it is kind of hard to be objective when determining the worth of our own creativity.  For most people in the class, being a craftsperson is new, so I can see how this is hard.

2.  I like the idea that the little extras/details can take an item from being good to "premium".  Elements like technique and your personal story add to value.  This shows how important your bio can be when influencing how a customer percieves your item.

3.  I agree that pricing too low is just as bad as pricing too high.  My automatic assumption for a very low priced item is that the quality must be substandard or that the materials used aren't as good.

Staying Competitive

1.  Using demand pricing can help explain why people seem to overpay for some things.  This is pricing what the market will bear.  If you are designing an item that people will often buy as gifts or see as a splurge, you can price higher.

2.  Seeing where your price fits among your competitors helps you develop a competitive price.  This would also show you that if all your competitors are undercharging, you may want to make your item a little different, help differentiate it from the others, and show the customer why it costs a little more.  If this isn't possible, you might want to think of doing a different item.

3.  It's better to price too high at first than too low.  It is a lot easier to lower a price than to raise it on a customers.

Tiered Pricing

I thought that the concept of tiered pricing was very reminiscent of what fashion designers do with regards to couture, ready to wear, and accessories.

1.  Having an expensive "buzz piece" can generate excitement and conversation around your store.  This is like couture;  most customers are not buying it, but they want to see it and will often stay around to shop for things which will fit their budget.

2.  Offering lots of things at different price points allows you to attract a wider range of customers.  I like when an Etsy store offers similar designs in lower price points than their signature pieces.  These types of pieces are good because I can buy them for myself and not splurge, rather than waiting for a birthday or special event.

3.  I also think that pushing yourself to create items at different price points also forces you to be more innovative in designs.  You must come up with ways to either simplify or make your design more involved.

The Art of Pricing

1.  Direct costs are one of the factors that influence item price.  While most people think that direct cost is a fixed expense, I like the idea that one can be innovative in reducing direct cost, and then are able to make more wage/profit.  Using recycled/vintage materials is one way to do this.  It would also be helpful to look on the internet for wholesalers from whom to buy materials.

2.  Indirect costs are harder for me to understand.  While my items do not have much indirect cost, if I chose to sew garments instead, how would I factor in the cost of my sewing machine? This seems confusing, especially for items that require machinery to create.

3.  I like, again, that this article mentioned noting your desired yearly wage and working backwards from there.  I think this is the easiest way to see the REALITY of how much you need to produce and make.  It can be frustrating trying to guess on figures, but this allows you to break things down in a way that is easy to understand, item by item.