Craft pricing can be tricky, particularly when you're trying to separate pricing issues from personal feelings about your work.
How do you use a pricing strategy that is objective and based on business goals when the work you do can be so deeply personal?
Putting a price on your products is, in fact, putting a value on your creative skill, and it can be tough to be objective about that.
In fact, I'd say that emotional issues, particularly lack of confidence, can be one of the biggest factors that cause people to set craft prices that are too low to make a profit.
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I still remember the day that I first sent my handmade jewelry out into the world.
Through some good networking, I had established a consignment partnership with the owner of a local store. It was extremely early in the development of my business. I was still working on initial designs and marketing strategies, and I had really not planned on having my jewelry in a store so quickly.
As I packed up my jewelry to bring it into the store, I checked and double checked each piece to make sure each one was perfect.
Although I was thrilled with this new opportunity, I just couldn't get over the feeling that I was sending something extremely personal out into the harsh world to be judged by strangers.
Fortunately, I had good mentors, and I had committed to using good craft pricing strategies to ensure that my prices allowed me to cover all of my costs, including consignment fees, and still make a profit.
However, it was still tricky to keep emotions out of my craft pricing decisions. The temptation to alter the numbers was there.
Thoughts crept into my mind like "hmmm, maybe if I was very efficient, I could make that necklace in 25 minutes instead of 30 minutes, and that would bring the price down a bit." or, "Maybe I'll just shave of a little bit in the cost of materials, I could probably have bought that wire at a cheaper price."
Because creative work is so personal, when you are making decisions about pricing your crafts, you are also putting a price on your own worth as an artist.
It can take time to build confidence in your skills and in the marketability of your products. Often this early lack of confidence causes people to set their craft prices quite low, thinking, if they charge a higher price, their work will never sell.
Unfortunately, the problem with setting low prices due to insecurity about the quality or marketability of your work goes beyond lost profits on each piece that you sell.
If you set your craft prices too low, you are putting a low value on your worth as an artist, and customers pick up on that.
Your pricing decisions communicate to customers the quality and desirability of your products. By selling your handmade goods at an unreasonably low price, you're effectively telling potential customers that your products and skills as an artist are not worth much.
The easiest way to instantly take emotion out of your decisions is by running your costs to make and sell your product through a good craft pricing formula. A craft pricing formula will show you, completely objectively, how you need to price a product to make a profit.
Click on the video below for a quick overview of the formula. After watching the video, you can find a more in-depth explanation of the craft pricing formula here.
How can you convince your customers that your work and by extension your artistic skills are unique and fantastic if you don't believe that yourself?
There's no really quick fix to build confidence, but there are several strategies and techniques that can help.
Make note of everything you have achieved with your art and your business.
Every time you receive a positive comment about your work or reach a business goal, write it down in a journal. It's very easy to quickly forget the thrill of accomplishment. If you write down your achievements as they happen, it will be easier to revisit those feelings when you're not feeling confident.
Compete with yourself and compare yourself to yourself.
It can be easy to look at the accomplishments of your competitors and feel discouraged if you have not accomplished the same things.
While you may be competing with these people for sales, allowing your sense of confidence to be tied to your position relative to your competitors is a losing proposition.
Focus on what you have built in your business, the skills it took to accomplish those things and how you will use those skills to accomplish your next goals. Then set some small, achievable goals and meet them.
Make yourself aware of negative self talk.
Many people have tapes that run through their minds with limiting, negative thoughts like, "I'm not talented enough to make my business succeed."
Catch yourself in those thoughts. Try writing them down, and then question them. Often writing down the negative thoughts is enough to show how unreasonable they are. Think through all of the reasons why those negative thoughts are not reasonable and write down those reasons.
Think through and write down any achievable actions you can take to ensure those negative thoughts don't come true, and then take action.
Give yourself all of the tools you need to succeed.
Self confidence is based in reality. Developing a positive regard for your work and creative skills means that you have a clear and honest picture of your strengths as well as your skills that could use improvement. Continue to learn and build your skills related to creating your art or crafts.
If you are unsure of your skills, continual learning will help you build confidence, if you're already confident, ongoing learning will help you do develop your creativity and expand your possibilities and the nature of your work.
Remember, when you are pricing your crafts, you're not going hat-in-hand begging people to buy your work under any terms.
You are offering your customer a unique opportunity to own a beautiful, creative, original, well made product that they won't find anywhere else. Try to keep that in mind when you're making craft pricing decisions.
If a certain segment of the population can't or won't buy your products at prices that provide a reasonable profit for you, it's not a personal reflection on your work. Those people are just not your customers. It just means that your product and that person are not a match.
Develop strategies for finding and selling to the people who are your target customer rather than underpricing to sell your items at a price that does not provide a reasonable profit and does not respect the real value of your work. And find ways to increase the perceived value of your work so you can command higher prices.
One of my favorite resources on craft pricing is the book How to Price Crafts and Things You Make to Sell. It shows you the basics about how to work out an appropriate price for your crafts, but then it goes deeper to also show you how to position your work so customers will be willing to pay higher prices. It really is a helpful, worthwhile book for anyone who sells handmade items.