the art of pricing

It's been one year since I quit my "real" job - my minimum wage, unfulfilling, time-consuming job that had nothing to do with my degree. I felt trapped, suffocated, and I couldn't stand working for people who didn't respect me or my experience. I quit that job and jumped right into building my own business. I've dealt with lots of challenges since then - motivation, self-confidence, money handling, learning about product development, and so much more. Throughout this whole thing, I've kept one challenge untouched.

It's hard for me to wrap my head around pricing. I want to price everything as low as possible, because 1) I've been unconfident about my own skills and 2) I know what it's like to be poor and want quality in my life. I hate thinking that I'm putting my work out of reach of the people I grew up around and have loved throughout my life.

But standing here, well sitting here, one year after making that big jump, I've found myself broker than ever. I imagine what it would be like if I had a "real" job - not a minimum wage job, but one that pays a living wage, with health benefits and everything. I haven't had an eye exam since 2005, or a dental exam since 2007, and there's no way I see myself having either in the future, at least at the rate I'm going now.

Over the past few weeks, I've sat myself down to really think, examine, and create a better plan to keep my business alive. I learned that if I don't pay myself correctly, the business will die - there's no other way around it. I read that everywhere when I first started, but it didn't completely sink in until now, when it's really bad. Don't sell your items at a discount rate - you hurt yourself, your business, and other businesses. Even if you don't make any sales at first, don't sell something intricate for $5 just to make a little money. Keep working on your business in other ways, and the sales will come.

What are other things you can do to make sales, besides offering a discount? Create more products - this is the best thing you can do! Create variations of current products. Put yourself in front of the audience you want to sell to. Network with fellow artists. Work on your branding & packaging. Research local craft shows and/or small businesses you could sell to. There are a million ways you can grow your business without cheapening your work and your skills.

As far as pricing goes:

  • I've learned specifically through Chickpea that you should always price for BOTH retail and wholesale, even if you aren't selling for wholesale right now. Since most of my work is labor-based, I charge myself one price for wholesale and a higher price for retail. This leaves you an actual profit, and gives you wiggle room for future wholesale accounts.

  • Build fees into your price, don't let them cut into your profit. Sometimes Paypal, Etsy, and tax fees take so much of the sale that I actually LOSE money per sale. I've adjusted my prices to add on those fees, rather than let them dig into the overall price.

  • Go slow and really research. Sometimes I just want to get items up as fast as I can, to get some money in my bank account. (Sounds greedy, but honestly, money's so tight now that I live sale to sale.) I don't pay attention to others' listings, or what shipping could potentially add up to. I sold an expensive vintage piece that I could've sold at twice the cost if I had researched what other people were doing. I can't even count how many times I've undercharged for shipping - get yourself a scale, and learn the ins and outs of the USPS system.

  • Take your time when building your product list. Take a look at what other people are selling, and what people are buying. Get yourself a notebook and sketch out a product per page. Not just a drawing sketch, but see what your profit will be per item. Include material price, time spent, profit, fees, and what you'd sell it at. If an awesome thing takes a ton of work, but you're not making any money on it, maybe use that item as a DIY project or a giveaway instead.

Taking it slow might be a hard thing to hear, especially when you need money, or if you're just starting it out, but it is completely worth it. And when I say "take it slow", I don't mean just spend an hour a day on work - I work over 12 hours a day, I never shut off. But I do have to give myself time to eat, time to go outside, time to breathe. When I work, I work hard and smart. I think about what I'm going to do, then plan and execute it.

The "money thing" might not be fun, but it's necessary if you're serious about this. I've spent a ton of time waddling around, making sales but not actually making a living - not because I'm not selling enough, but because I wasn't looking at the pricing closely enough in the first place.

Here are some links that inspired me to change my thinking about pricing:

  • Sue Bryce's blog. She's an absolutely amazing portrait photographer who has learned so well that pricing is an integral part of business & marketing.

  • This speech by Tom Hodgkinson. It's been a struggle for me to juggle my ideals with my passion for being in control of my own income. His life story and ideas made me realize that it's okay to ask others for money, especially if you're giving them something great in return.

  • Etsy's pricing series, which I think they're expanding all this week. There you'll find the basics and good tricks to find the best way to price your shop.

  • Design*Sponge's biz ladies series. Lots of great advice there.

I guess what I'd like to convey here overall is that I shouldn't have been so hard on myself, and I should've just charged the correct prices from the beginning of my business. I think I would've been much better off today. But I am changing the way I'm working my shop - I'm working smarter, better, and hopefully it pays off.

If you have any questions about my experience so far, feel free to email me or comment below. I have so much advice to give, after jumping in and learning everything the hard way. So get in touch!