I normally have an aversion to talking shop, as it were, because I'm not exactly a success story who could reasonable considered an expert. But this is something I've come to realize is important (and it will probably betray my personal economic philosophy but oh well).
If you're selling on Etsy (or anywhere else) as a hobbyist, but you've been working in your craft for years and know what you're doing, you are probably not charging enough. (Unless you've been selling for a while, then you might have this all figured out.) If you do shopping on Etsy, you might be confused by the wide range of prices you see for similar items. What gives?
Why Aren't You Charging Enough?
|Pricing your handmade work can be nerve-wracking. (FreeImages.com/Nihan Aydin)|
It's certainly tempting to keep a razor-thin profit margin. "It's just a hobby, not a business," you might explain, "so I don't think charging a lot of money is really fair." Or: "I can afford it. I just want to get stuff out of my stash."
Or you might feel pressured into keeping your prices "reasonable" because you see other sellers offering something similar within a certain range.
Or you might not feel like you're talented enough to justify a price over a certain amount.
Stop. There's a better way.
Why Should You Charge More?
There are two reasons: you benefit, and others around you benefit.
How do you benefit? First of all, you actually get rewarded for your time. Not only the time it takes to sell a given item (whether it's photographs and online listings, or transportation times to and from craft fairs), but the time it takes to make a given item.
"But I don't need to be rewarded for the time I take to make something. I don't want to be! The making is fun enough."
If that's really how you feel, then donate your profits to a charity of your choice. Problem solved!
Because your time is valuable. It really is. And taking your time into account when pricing signals to consumers that they should value the time you spent on an item. Other people should respect that.
This signaling leads into my second point: others around you benefit.
Because while you may be a hobbyist who sews to take the edge off a high-pressure but well-paying job, the booth next to you may be an artisan who makes their living off their craft. If they're selling in a market full of hobbyists who are pricing their products at a hobby level instead of a retail level (never mind dirt cheap goods imported from unscrupulous and unethical overseas manufacturers), and are selling items of a similar style and quality, capitalism means they're not going to be able to compete—not unless they lower their prices. But they can't lower them indefinitely, especially when they have many more costs to factor in. And they can't explain to every customer that their doll clothing costs "so much" because they have to take their time and their overall cost of living into consideration, in addition to "just" materials.
In other words, customers often have skewed perceptions of the true value of new goods. By taking your time into consideration and valuing your time and talent as it should be, you can help skew the perception back towards something reasonable. You can signal that the time all makers spend on their craft, whether it's jewelry or soap or sewing or what have you, is valuable. Because customers have no idea who's a hobbyist and who's a full-time artisan, not without doing some digging first. Meeting them at the price point is the quickest and simplest way to do it.
Okay, How Should I Set My Prices, Then?
Every Etsy hanger-on asshole on the Internet has an ebook out there that includes rehashed advice about how to price. You can get one of those if you want; they're probably more knowledgeable about this than I am. But it might be illuminating to see my guidelines. There are basically three rules that I follow.
1. Price everything for retail. This is probably the real secret behind pricing things yourself. Everything in my Etsy shop is listed at a retail price. This gives me wiggle room to have sales if I want to. It also means that if a vendor finds me and inquires about wholesale discounts, I won't be losing money on the sale.
I know that it feels weird, like you're somehow double-dipping. Just roll with it. Eventually you'll hit a new normal when it comes to valuing your goods.
This one is less a guideline and more of an attitude shift, but it's the most helpful one you can make.
2. I just never sell anything under $X, ever. For me, that cut-off is $10 ($10 retail). In the future I might decide to raise it, but for now I think that's a good lower boundary, considering my craft. It might be higher or lower for you, depending on how you sell. There are a lot of little things (memory wire cuffs, earrings) that I make in fairly short bursts of time. But the bottom price is always $10. It leaves a pretty wide profit margin so that I can be a little more forgiving on higher-end items. It also ensures that I earn enough to cover the cost of materials.
3. I give myself an hourly rate. I guess you can tell that I'm not a real grown-up yet because I think of my work in terms of rates and wages instead of a salary—that's been the nature of most of the jobs I've had over the course of my adult life. It certainly helps take some of the guesswork out of pricing, because you can decide: how much do I value an hour of my time? What's the minimum I'd be okay with earning at an actual job under someone else's employ? Then keep an eye on the clock while you make to get an idea of how long items take you to make.
This might mean that some items cost less than you expected, while others cost more. This is valuable data and you should probably keep track of it somewhere, or at least try to remember it.
I certainly haven't perfected the art of pricing yet (particularly when it comes to sourcing materials), but I'm doing much better now than when I started. And while I wouldn't expect you to follow my guidelines (your craft may be quite different!), I've hopefully got you thinking about how you price your items and whether you're valuing your time.
If you peddle your wares on Etsy (or anywhere else), leave a link in the comments! Do you find it difficult to find the right price for your goods?