Monday, February 2, 2015

if you can stand to read one more pricing post - the "as within, so without" pricing guide for makers


http://www.cardstore.com/blog/black-history-month-quote/?utm_source=rss&utm_medium=rss&utm_campaign=black-history-month-quoteI had two Etsy shop owners ask me pricing questions last week and I linked them to some great articles (* see links at end) but wanted to say something here about the spiritual laws we are working with.

(yes, spiritual laws, this is my decade of Rumi after all - yes, I'm working with decades instead of years now - the years are moving way too fast ...)

Many people are given the advice to raise their prices and often this advice is given by someone outside our business

(I do not discount the advice of outsiders - sometimes the very person who we might be responding to with "well, that's easy for you to say" is exactly the person who needs to say it. Of course just because we don't discount outsider advice, doesn't mean we blindly follow it either.)


an outsider who can sometimes see the value in our work that we can't see.

Herein lies the catch

(I always wanted to say something where I could work in the word herein, but now it just looks weird ... so disappointing)

with all of this because having someone else see our value, especially when we can't see it for ourselves yet is a powerful thing, but it is only a powerful thing in hindsight after we see it for ourselves.

That price (the outer level), if indeed it is too low,

(the buyer determines the price after all - what we put out always comes back in equal measure though, we are assured of this always - we get way more back from making stuff than dollars in our bank account, but that's a whole other post)

is a reflection of something going on inside us. Inside work is needed to bring this whole thing into balance. Otherwise our increased prices will just cause us to self-sabotage since we won't line up with them.

Now, there are times when it is easy to see it is time to raise our prices
1. we have priced incorrectly in the first place,

(did anyone see that Restaurant Impossible episode where the couple were told they had been underpricing their food and losing money since the day they opened, YEARS before!)

2. when demand outpaces supply (this is not always true though)
3. when our expenses have increased (this is not always true either - sometimes we have to find other ways to get costs down or absorb the losses because in the end the buyer always determines the price)
4. certain changes to our skill set or market

When I was a bank manager we sold money orders for $1.00.

One day, a smart somebody in auditing determined that if we sold money orders for $4.00 we would lose 90% (maybe not 90%, but it was some crazy high percentage, I don't have the algebra skills to double check this) of our money order business

(the non-checking account customers who bought money orders all the time)

and we would make exactly the same amount of money in fees

(by selling to our own checking account customers who very rarely needed a money order and who would gladly pay this increased price for the convenience)

and save gazoodle dollars in labor and this is exactly what happened.

Many pricing articles out there for makers use examples like this one and this is a valid example and useful, but this isn't the whole story for us.

Because every piece of jewelry I sell goes to someone who wears that piece of jewelry (hopefully, often) out into the world and this creates new buyers for me  - so the more I sell, the more I sell - if you see what I mean

Bottom line about pricing - do your homework so you know your costs, don't under price yourself because it hurts all of us, and know that ultimately your buyer sets the price. When launching something new, start at the end (the price the buyer will pay) and work your way backwards to see if it's worth doing. I always see if it's worth doing at a wholesale price because I know I can only sell so many whoseewhatsees at retail.

NOTE - Although I give this "see if it is worth doing" advice here, remember this is outsider advice after all. Sometimes the very things our logical minds and calculators, would deem "not worth doing" lead us to the very things that are.

And always remember we get back what we put out there - this is a spiritual law that can't be bent or broken - the stuff we get back might look a little different than what we are expecting though.

What we get back could be a lesson in how not to work ourselves into exhaustion next time

or maybe we get a lesson in how to appreciate the things, outside of money, this maker life is making for us.

* A Simple Formula for Pricing Your Work HERE
* Pricing Your Products for Growth HERE
* Pricing Your Handmade Jewelry HERE
* Value Pricing HERE
* Pricing for Our Skillset HERE and HERE

4 comments:

DancingMooney said...

Pretty much the whole end of your post sums up where I am at right now... very much in a Re-phase...

"Sometimes the very things our logical minds and calculators, would deem "not worth doing" lead us to the very things that are.

What we get back could be a lesson in how not to work ourselves into exhaustion next time

or maybe we get a lesson in how to appreciate the things, outside of money, this maker life is making for us."

So very well said, Cat! And so on point for me right now...

xoxo

Catherine Ivins said...

thanks Janell - I am so feeling the right timing aspect of everything right now even as I try to rush things that just won't be rushed ... xo back

KJ said...

I am repeating myself, but I make jewelry because I enjoy making jewelry. I am not supporting myself by jewelry sales. However, and herein is the catch, when I do price and sell my jewelry I sell it as art. If I priced it based on the materials, it would be underpriced. If I paid myself my regular hourly wage it would be too expensive. Balance has been one of my mantras and I think I have found it. No magic formula, but an attempt to be reasonable and still capture the value of my efforts. Mostly, I guesstimate based on the time it would take me to recreate a piece.

P.S. Herein didn't work out that well for me either Cat and I am even practiced at herein's, wherefore's, party of the second part, etc...

Catherine Ivins said...

guesstimate is about what I do - I just have to remember not to base everything on what I would pay since I am notoriously cheap with myself, even though I know better. well, I do feel better now - if a lawyer can't make herein work, no one can ... it is a shame though, such a lovely word, wherefore is rather nice, too. xo feel better Kathy!