One of the most important distinctions I’ve been thinking about over the last few months has been about how charging what you’re worth (and seeing yourself as worth it) is about more than just making more money.
The truth is, figuring the best price to sell your product or service is no simple task. In fact, many books have been written on this topic alone.
To be able to offer useful advice, I am constrained to limit our discussion only to the worst pricing mistakes usually committed by handmade business owners:
Here’s a breakdown of some of the worst pricing mistakes you can make:
You hold prices at the same level for too long
Most handmade business owners fear the uproar of a price change and put it off as long as possible. Successful businesses accustom their customers and their sales forces to frequent price changes.
Marketplaces change radically in a short period of time. It’s important to recognize that the value proposition of your products changes along with changes in the marketplace, and you must adjust your pricing to reflect these changes.
Look at your competitors — have they raised their prices over time? If the demand is there, then try raising your prices to match the quality and popularity of your product.
You only base your price off of similar items
So, there are other small businesses selling a similar item to yours, so you think you’ll beat the competition by pricing your item lower than theirs. Wrong!
This isn’t always the case, and you aren’t considering all of your own costs before determining your item’s price.
What’s more, if your item is priced much lower than your competitor’s, you could be sending the message that your item is of lower quality.
Why is your piece unique? Do you use high-quality materials? In fact, if you’re using premium materials and your competitor isn’t, then you should definitely be pricing your items higher than your competitor.
You don’t value your time or skills
Oftentimes, a maker doesn’t value his or her time and skills enough to factor in enough of a labor cost in the total product price. Don’t forget to consider your level of expertise and training in your field.
Also, you should be providing yourself with a livable wage, so that means factoring in a profit for yourself and not just the cost of your goods + overhead costs. You must remember that you are, in fact, an artist and your skills are worth paying for.
Sometimes, pricing based on labor can be difficult because some projects take a very long time to complete. Consider options for cutting your production time and to produce product more efficiently. Or, really consider how much your time is worth. Even if you think your product has a steep price tag because of labor, remember that the labor is one of the major values in your product!
Don’t assume what other people are willing to pay until you give it a try and give yourself the compensation you deserve.
So here’s what I want you to do now …
- First, in the comments section below, tell me which one of these points makes you want to take action, and what that action is.
- Next, if this post did its job, please share it via the retweet button (or via your social media goodness of choice).
- Finally, if you’re getting interested in automated pricing that’s free of charge, download our free pricing calculator.
See you in the comments!