HOW DO YOU PRICE YOUR PRODUCT?
© Barbara Massie
For the next several articles, we are taking a different approach. We want to concentrate on pricing for creative entrepreneurs. Pricing. Sounds so easy, doesn't it? We all know it is a difficult process. Set the price be too high and the public won't buy. Set it too low and the business suffers a loss.
We'll look at hints and several methods of pricing. As the manufacturer, you will decide which is best and the most acceptable to you.
Pricing is one thing that scares a person about going into business. You have the product, but you don't know what to charge, so you keep procrastinating and just don't take that first step to start selling to the public. You will find links to sites here that talk about pricing; compare and keep coming back to glean information that will enable you to make your own decisions. To start -- read Pricing Crafts is Part of the Answer to Your Success.
The "Real Cost Pricing" will force you to know your product in depth. You will know the true cost when finished with this exercise. Because change is constant, your pricing methods cannot be constant. You determine a price, but then must always be aware of change in trends and costs to continue to monitor the item to stay at the best price possible.
Pricing is difficult to tell someone "how-to-do." It isn't a simple process, but is one of the most important decisions you make for your business.
Homework is a necessity when pricing, you will be asked to consider all aspects of your business costs: these can include design costs, supplies, construction, packaging, shipping, marketing expenses, administrative expense and most importantly, your own time.
Understand your pricing process before starting to sell your products or services. Read the articles each month, go to craft shows and stores to look at comparable items and prices, then sit and figure the best way to price your items.
A creative crafter who sells one-of-a-kind pictures and also paints on many look-alike wooden boxes will need two methods of pricing. Many artistic people drastically undervalue their time and consequently undercharge for their products. Look at Pricing Your Work, which is geared more to artisans.
If providing yourself with a reasonable wage for your time causes your price to be too high to be competitive, you may need to find ways to cut production costs. If this is impossible, you should face the fact that the product is not a profitable one for you to construct. A business grows with profit, but quickly dies when always showing a loss. Pricing and Ordering
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