I wrote the article: When Designers Hear “Can You Cut Your Price?” a few days ago and it has really stirred up some conversation from fellow business owners. Comments from Twitter, Facebook, G+ and this blog have poured in from around the world as other artists and entrepreneurs chime in about their experiences and frustrations.
And there’s a common theme popping up – the concern about pricing.
Often times, artisans will lower their prices because they want to be sure they will make some sales. There’s nothing wrong with making money – we all need to eat. Still from our business side of things, we start to see our expenses pile up, and we get worried. And then we start tweaking our prices.
Maybe we see someone else’s lower prices and we feel we have to compete. Maybe we’re just nervous about the show. Maybe we really haven’t thought through the true cost of our item. Maybe we have guilt issues over making money on our own and by not working for someone else to be paid. Maybe we truly just want to have some fun and throw a sale, kinda like how we might throw a party. And maybe we ourselves have undervalued an artist before and we know it. So we try to compensate for that guilt too.
Who knows? But right or wrong, we all give lowering our prices a try sometime, for some reason.
But here’s the thing – that bit that you lower your prices to, at shows and for general public shopping, does not really make a difference in getting the sale or not. All it makes a difference in is your bottom line.
People are not really quibbling over dollars here and there. And people only think on the surface that they spend money with artists based on price. Perhaps a little, but it’s not really the core place that people operate from, it’s a peripheral one. Price is a data point by which we try to measure our true reasons for what we buy and why we justify it. But it’s only one data point and it’s not the core.
The heart of why people buy is not money, but instead their experience of it.
Why? Because innately, we are after the human experience of things. Innately we are ever seeking to improve that core life experience and either you, your story and your product fit into that connection or you don’t.
If you are truly an artist and not just a manufacturing machine, and if you will truly embrace your art, your expertise, your passion – people don’t just invest in the thing you produce. They invest in the artist. They invest in you. They invest in your future and your light. And that’s where you want to distinguish yourself.
Price your items fairly.
In no way am I saying be extravagant or unreasonable in your pricing approach. We’re not talking about pissing into a jar and hawking it on Craigslist for a million bucks. But you need to think about all of your overhead, your taxes, your licenses, your internet fees, your materials, your table fees, your travel fees and last but not least – your time. Think about it fairly, set your price and then stick to your guns.
This doesn’t mean that you don’t ever tweak your prices.
Figuring out your market usually takes time and experience. Until you’ve been in business for at least a year, you really don’t know anything. And never use your first show ever as a measure of what business as usual looks like. Whether that first show is good or not, no individual show is going to tell you what you can count on. So you will adjust from time to time as you figure things out.
But never do you want to make your prices unfair for you. For the health of your business, you have an obligation to care for it, just like you care for a child. In order for it to grow and thrive, and in order for that business to successfully serve your customers, you need to make good healthy decisions.
You are judged by the prices you set, for better or worse. And if they are not right, they become your problem and not your solution.
If you don’t want to be associated with knock-off bargains, flea-market tactics or Wal-Mart mentality, then don’t look like them. If you don’t value yourself more highly, why should anyone else? And if you don’t stand up for yourself, who else will? It’s your life to live and your business to run, no one else’s.
This is a really important thing, because in the handmade and service markets, prices that are too low are often a sign of inexperience and lack of professionalism to everyone in the know. Your fellow artists know it, your buyers know it and your show directors know it. It takes discipline to run a strong business. If your prices do not match the needs and design of a show, it just might be what keeps you from getting in. And it could be a whispered warning that you might be too risky to team up with either.
Pricing should not be about fear or negative emotions.
It’s fairness and it’s strategy. Gather your data, give it the attention it deserves and then design a logical working framework with flexibility built in.
Last but not least, build in lows and highs, but remember that most of your sales come from the middle.
Part of the human psychology is built around the justification of what experiences we choose. And most of us will not fall into the extremes. But we will look at those extremes as measurements to help us find the middle ground that feels right to us. We like groupings of threes, fours and fives. Too much more and it gets complex, too little and we innately don’t feel we have enough data to make the jump. Make it easy for your buyers to feel good about their decisions, knowing they are looking for certain data points to reach their conclusions. And then wow them with your amazing talent and service. You’ll have it in the bag!
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