Thursday, April 3, 2014

Indie Business Pricing: 10 Pricing Strategy Lessons. How Do You Price Your Work?

My introduction to indie business ownership was via selling art. My first line was horrendous and rushed during the night while I was working full-time, but it introduced me art-pals and our local art scene. I'd start selling vintage finds a year into blogging nearly 4 years ago. With both art and vintage selling I made the beginner mistake of low mark-ups, if I bought something for $2.00 I might sell it for $4.00 to $8.00. Now opinions on my prices are a pendulum swinging to two extremes: either my prices are way too high, or too low to the casual viewer or fellow seller.


These are my thoughts on pricing based on four years of selling as an indie business owner and three years in marketing for a multi-million earning company (named the fastest growing biz in my city). I've seen talented workers sell the seemingly impossible at high prices by effectively communicating value.

Lesson 1: Prices Must Cover Expenses and a Basic Wage.

Your retail price must recover expenses on gas, inventory, memberships, supplies and listing fees. They also must pay you an hourly wage for time spent making, hunting, photographing, researching and listing. The rookie mistake is to price too low because you fear no one will buy otherwise; lies! Pay yourself.

Lesson 2. You're Not Getting Rich, But Maybe You Should?

The indie biz lifestyle is selected out of love and passion, but when you count the hours many indie business, myself included, would earn minimum wage or less- even if there are a couple of items priced $100 or above. But what's wrong with getting rich? Buyers/fans feel bitter or exploited if it happens, but they should want the artist they love to improve their station in life. You want to live comfortably and make decent money, too, right? Everyone does. Don't resign yourself to poverty just because it's "the artist's way."

Lesson 3. The Value of What You Sell IS NOT the sum of its parts.

Would you haggle with a known fine artist on the price of his work because the cost of the paint on canvas only amounts to fifty cents? Hell no, you don't because the value comes from the actual piece: the line it belongs to, the message, its connection to you, how it makes you feel, its story, the artist's story. If you find something for $1.00 and it's worth $1,000 don't feel guilty, price at the highest amount someone will pay guilt-free.

Lesson 4. My Personal Pricing Formula.

Many price their items by comparing themselves to the marketplace or googling a specific item. It's better to determine your price point first and go from there. Do you want to be high end, in the middle, low? You can have items across the board. I look up my vintage find's value and price from there and for items that are very unique and beautiful, I'll price a little higher. I still consider myself to be "low-end" in pricing.

Lesson 5. I Feel Cheated When I Sell For Less.

I've marked items down locally only for them to sell for much more online; a specific example, a gorgeous owl embroidered art piece sold locally for $27 and online simultaneously for $100- I paid $10 for it. Pain! When I mark something down just to "move it fast" and it sells for a small amount I feel crushed, absolutely cheated. I refuse to feel like this anymore. I am pricing in a way that sustains me. When it sells at a higher price I am happy and satisfied and feel like my hard work was paid for.

Lesson 6. It's Okay if Something Sits for Months if it Has to.



A common complaint is that items will sit for longer if priced higher, that's fine to me. I feel happy that I stuck to my guns and got what it's worth. I've renewed items, that's fine. I just sold these paint by number pieces (above) for $45, I've had them for at least a year.

Another example, I bought a gorgeous Japanese lamp for myself 3.5 years ago and recently suggested it to a buyer who bought something very similar from my Etsy shop. The $90 price seemed to high to her and first, she asked for less but I told her I couldn't go down. (I paid $35 or so for it. $90 was literally the lowest I could go.) She later got her sister to pay for it as a gift and I was rewarded for staying my ground. Selling vintage and art is very emotional, sometimes it really does take the right personal to resonate with it at the right time.

Lesson 7.  Perceived Value is Everything, and Love Will Find a Way.

Stories abound of people who were struggling to sell their wares until they raised prices- then they flew off the shelves. Raising your prices sounds like an insane thing to do when sales are slow, but try it. It can make a huge difference in sales and how you're perceived in the marketplace. Do you want to be a quality artisan, or WalMart? The answer is individual and there's nothing wrong with either choice, you can have different price points and bargain bin/quality finds in one brand which I'll get to.

Woah my living room has changed so many times since the old photo above. So much better now. Every time my cuttlefish anatomy poster to the far right appears I get e-mails from interested "buyers".

I told my sea beast story before, but to recap: I'm sea creature obsessed and had to have a vintage cuttlefish anatomy poster from a local antique shop. (above) It was $250. I scraped up some funds and requested anyone to just donate to my cuttlefish fund as my gift for Christmas. Now the gorgeous piece is mine the vendor was happily $250.00 richer for it. When buyers want it they will find a way. 

Lesson 8. Release Your Items as a "Line". Curate & Quality.

So if you're going to charge the big bucks it helps to carefully curate what you're selling, like any line of wares released in a catalog. The market you choose to sell in will determine how easy or hard it will be to sell wares at a certain price, it's easier to sell a piece of art for $250.00 online than at a yard sale, for instance. Work to communicate value with your displays, price tags, and descriptions. Tell a story. Create the absolute best quality work you can and you will be rewarded.

And my style has changed since even this 2013 example, I strive to improve branding, composition, and refine my story with each item I list and every photograph I take.

Reminder: I've often see my pieces purchased from me and priced in other antique mall booths across this city for much more! It something to consider- do I want to be the "middle man" or the person at the top earning the most? Top, please!

Lesson 9.
Things at Different Price Points, Your Bigs & Smalls.

You don't have to commit to one price point or change everything overnight. You can make/offer lower priced items, these can often help save you when your "bigs" are moving slowly. I have $15.00 art prints in my Etsy shop and I'm going to making low-priced helpful small business eBooks next. I more ideas for smalls behind-the-scenes, like more pouches. I sold out of the set below the first day!

Thank you so much Mary and Sarah! So many more low-priced small like these pouches are on the way and I will of course take any/all suggestions.

Lesson 10. No One Can Do What You Do. On Solidarity.

Every single person in the market place brings their own perspective and that has value. Your story has value, what you sell has that edge just by being yours. When you sell art, it's the sum of you, your time, materials, and overhead. When you sell vintage, you're selling time capsule pieces that are no longer manufactured. This has value, you can price "high" for that and people will pay for it.

I hope this post helps you determine how to price your wares and also provides some understanding. If an artist you enjoy seems to be unfairly raising the prices on their wares remember that the $200 for some item is not just going straight into their bank account. They paid for supplies, gas, their time (no hourly wage), the listing prices/membership prices, cost of the item, time to clean and list--- our current inflated personal prices on rent/utilities/food just to live. We're not being jerks, or trying to rip people off. We're helping the market understand the value of their work with their prices and just trying to make a living.

Artist Venting: Makers are often at the bottom of the artisan-crafted totem pole in the corporate world. Why should we be expected to have to "just scrape by" just to be "fair" and "nice" to others with our prices? Why does our craft continue to have a low perceived value? Because that's the status quo, because we often lack the confidence to demand we get better pay and treatment. I was in that boat starting out, I'm not anymore. You shouldn't be either.

TLDR (TooLongDon'tRead); Do what feels right for YOU. Stick to your mission and make sure you never feel cheated. You deserve to live well, guilt-free.

Would knowing someone paid $2.00 for something you want to buy for $100 keep you from buying? It wouldn't for me.


I personally try to support artist I love the best I can, even if it's a small purchase.  (Hence why my home is filled with framed bits of local art!- as seen in just one of my gallery walls above!) If you enjoy someone or something and want them to stick around, support them. I hope we can have a discussion in the comments that helps everyone! I'll have many more details and formulas on pricing in my upcoming eBook. For anyone who comments, writes-in, buys items, you are so very appreciated! I'm working on freebies and low-priced items for buyers into the future. You are so appreciated.


Let's Discuss:
 How do you choose to price your art or vintage items? What do you feel about "high" prices, what are "high" prices to you? This convo has been coming up again because I shared what I pay for an item in my haul posts again as was requested after this post. I'm going to stop sharing what I pay for items again into the future for my business because that's what feels right. Do you think it's rude or tacky to do that? You will NOT offend me, I promise.
Daily thrifting updates, information, & Inspiration: Follow Thrift Core on Twitter and Facebook.

36 comments:

  1. Ouch! This post hit home. My pricing is based off what I see online. It's hard to do that in my booth though, because I feel like this area isn't upscale enough to support better prices. That's probably a lie to myself. Ugh.

    I am asking a friend to help me with my Etsy pix. I especially love the idea to curate!

    So much work to do:)

    -Lana

    ReplyDelete
    Replies
    1. Curating is so important and is my fav part of the job. I may be taking on clients to help them do that on the side as well :D That's exciting.

      Anywho with the antique mall booths it can definitely be trickier to get the prices you want, items may sit for longer. It really helps to fill it with things of high and low prices to keep sales going steady, re-arrange and add fresh new higher-priced things often. It's crazy how re-arranging can sell something quickly o_O

      Delete
    2. We have been in the booth since December and my mom and I agreed last night that we are ready to do a major rearranging already. I am excited about that.

      At the booth, I had a large item that I purchased for $12. My parents were with me when I bought it and thought I was crazy. I actually bought 3 of the same thing. Well, I decided I didn't need 3 so I put one in the booth and priced it at $50. My dad laughed so hard at me. That sucker just sold for $45 (because the mall gives a 10% discount over $25 if the buyer asks) and seeing my dad's shock that it sold was ahhh-mazing. ;) Between that sale & this post ... I am ready to confidently price well.

      Delete
    3. Dooo it. :D I've had the same reaction from my buddy Matt, it really does shut them up when someone forks out the cash. My mall does the same discount thing too, must be a mall standard. I just called my mall to let them know I'll take the large booth that just became available, I can't wait to see if I can communicate value well with the new, larger space. Going to brand the hell out of it.

      Delete
    4. Yay! Congrats on the bigger space.

      Ya know, to a numbers person, the "branding" term is so intimidating. Ahhhh!

      Delete
    5. I'm an artist/marketer so the hard part for me is...keeping a consistent inventory system oddly enough. Oh us scattered-brained right-brainers.

      Delete
  2. Very good post! I probably price things too low, especially when food, gas, etc., etc. keeps going up. I think it is a very fine line between too low and too high, and all buyers have their own opinion on what's too much-- or too low. Running sales don't seem to help sell items either so I think that supports your theory. I generally don't say what I paid for a thrifted item if it's going into my Etsy shop. I think most people just see a mark-up and not all the time, effort, everything you talked about that goes into selling. This is a very tricky spot for artists and resellers. Will be interested to read others' comments today.

    ReplyDelete
    Replies
    1. I got both sides, most say they want to see the prices. I've had only 1-2 customers balk at the mark-up, most people were understanding when I used to put a spreadsheet in the haul posts with the price I paid and the mark-up price but I won't do that anymore. The funny thing is, from my experience, people will complain about mark-ups whether it's $10.00 or $100.00 sometimes- especially if they know what you paid for it. Definitely give raising your prices a try, much more rewarding when something sells at the higher prices.

      Delete
  3. Excellent post - good info. I want an antique booth so bad right now :)

    ReplyDelete
    Replies
    1. My bigger one will be great to hold ALL the merch in this apartment (finally) and experiment with but they can be a huge time suck for not a lot of payback, too. Especially while you're getting used to it. Glad you liked the post!

      Delete
  4. You covered several important points regarding pricing and when considering how others price.
    For myself, I will vary my prices based on where I am selling. When I do a craft fair in Bar Harbor, Maine in July I sell my sea glass earrings at $30-$40 a pair. When I am selling these same earrings in the Denver Art District in the Fall I price them at $20.00 a pair. I do this because I have learned my markets. Different things will sell better in different places. My vintage wares do very well in the Denver Art District year round, but I am not sure I would be able to move a single thing if I leased a kiosk space at the nearby shopping mall. I think people go to certain places for certain things.

    So, high prices to me are items priced out of their league for the venue they are trying to sell themselves in. For example, last month I visited a local restaurant in a touristy beach town. A jewelry artisan was selling 1 inch long sterling silver and beaded dangling charms for $350-$500 a piece. Not many were selling. However, she makes these by hand in her hometown of Palm Beach, Florida. Palm Beach is one of the towns where the people in the top 1-10% income bracket live. She does not struggle to make sales in Palm Beach.
    The community knows her and they have this money to spend.

    When pricing anything one must consider who the customers will be, what they want and how much they are able to spend. This is why I love online selling. A global market opens up so much more opportunity.

    If you are interested I have written my own article on a similar topic. Here is the link:

    http://theatticshop.co/the-blog.html

    ReplyDelete
    Replies
    1. Thanks for sharing, will definitely read it. It certainly helps to know your market and price accordingly- in awe of the amount she can earn per earring! Inspiring! I do price my vintage wares a little lower in my antique mall booths rather than online from time-to-time depending on the item.

      Delete
  5. People tend to price things with their own pocketbook. They price items at what THEY would pay for them. I learned that when I was a designer. I was able to sell people $50, 000 in window treatments. I would never ever pay that kind of money, nor could I afford to. But if someone else wants to, why should I stop them.

    Also, my son who does art shows: We had discussed him raising his prices and my husband said not to because people wouldn't want to pay that much. Evan and I disagreed, and he raised his prices. Guess what? he sold more than ever. It added more value to his work. Never under value yourself.

    ReplyDelete
    Replies
    1. Love the story about your son adding value to his art by raising prices! I definitely learned that one the hard way too, you communicate value with your price points, especially as an artist.

      Delete
    2. I agree with RandomGood Vintage. If you create perceived value through your marketing, merchandise, photos and experience, you should command higher prices and feel good about it. There is an excellent book called "Worth Every Penny" and it really teaches you about how to think of your business as a "boutique" business and how to create perceived value. It's a must read!

      Delete
  6. Pricing is one of my hardest parts of selling. I research what others are selling theirs for but a lot of times, the prices on Ebay are all over the place. I find too that running sales on Ebay does not produce any results (at least for me) I had 20% off on over 100 items and only one item sold.

    I never post how much i paid for something. I feel it encourages low ballers who have read my blog and visited my store.

    ReplyDelete
    Replies
    1. I find the same when I share prices. Some really amazing books and seminars have encouraged indie biz owners to be open and honest to help others improve- and to improve themselves, so I thought I'd try again. But then it can get a negative response so my over-share may be off for good. I have nothing to be ashamed of but I don't want to run my biz with minimal problems. Sales actually seemed to work okay on Etsy but not at all on eBay, noticed the same thing. Thank you for sharing your experience.

      Delete
  7. Thanks for sharing all this useful info!

    ReplyDelete
  8. It depends... I am currently in a lowering price mood. Which is weird because I am selling well. I think it's because when I'm shopping I've just decided a lot of things are overpriced. I'm over price inflation. :(

    ReplyDelete
    Replies
    1. I provide some low-priced wares for shoppers like prints and smalls and will continue to do so, but can't lower on everything, especially if it's super unique/awesome. Nothing wrong with choosing to provide a lower-priced option in the marketplace. Some won't agree but I feel like my prices are still on the low-side. I'll be hosting a big yard sale this weekend to clear out some merchandise where things will be lower-priced, too.

      Delete
  9. Excellent tips, Van. And so timely for me! The other day I sold two items from my Etsy shop to two different buyers. I'm not sure whether they were priced too low... if I hit a niche market (they were both owl themed items) or if it was just an unusual sale day. Needless to say, I'm going to reevaluate the whole pricing process.

    <3 Jackie @ Let's Go Thrifting

    ReplyDelete
    Replies
    1. I noticed a sales boom on Etsy, I think a lot of people are spending their tax returns. Owls are always popular- especially at the right price!

      Delete
  10. Mostly of the time we price low because we are ignorant about the real value of the item, when in doubt I check how much others priced. I think we cannot price too high neither because an economic crisis is going on right now and people dont have much money for colections anymore, paying bills and accomodation is always the priority.
    I enjoy to know how much you paid per item and wont judge ever for your prices, but you know there are mean and jealous bloggers and non bloggers out there so I think you should stop doing that for your own protection and reputation.
    Thanks for sharing these lessons, you maake us think van!

    ReplyDelete
    Replies
    1. While there are a lot of people suffering from the economic crisis there are still many thousands that are not that can spend their money to support an indie artist. And I'm grateful for that! I do want to continue to collaborate with my mom on making lots of "smalls" to mix it up for those who just want to spend $5 here on there, as well as an extensive vintage art print line. Agreed on sharing prices, that shall end for now. But I'll continue to share earnest behind-the-scenes, information, tips, and processes to help people out.

      Delete
  11. Lots to think about here, thanks for a great post. I'd much rather wait for a good price than work hard and give away my products. The challenge then becomes generating traffic (on eBay.)

    ReplyDelete
    Replies
    1. I'm going to be interviewing some experienced eBay sellers for tips on that soon me-thinks. That's something I don't focus on but need to as well.

      Delete
  12. I base my prices on what the item is selling for online. One problem with this though is that can change over time and I need to reassess my prices periodically to make sure I'm still inline with others. I've had items that I didn't even bother to list because there were too many already listed at low low prices and then checked again months later and found the situation changed listed the item and sold it for a decent price. I don't underprice just to move inventory faster but I do have sales sometimes where I'll take a hefty chunk off of some of my high priced items for a couple of days just to see if I can get some fish to bite. But I still make sure I'm making a good profit. For one of a kind items that I have nothing to compare to I start high and slowly bring the price down if it doesn't sell. You can tell by the number of views or watchers if there is interest there. I like to support local businesses as well and will pay more to shop at a small local shop than to save a bunch at a big box store. I would also support small/local artists if I could but I can't afford art right now unless it's thrifted.

    ReplyDelete
    Replies
    1. Thanks for sharing your detailed tips! Very helpful.

      Delete
  13. Van do you have to do any photo editing to adjust brightness and or color? If you do I'd love a tutorial on how you do it. Your photos look really nice.

    ReplyDelete
    Replies
    1. I'll share some tutorials soon, I love using photoshop elements to adjust the white balance to make the objects pop and keep the background super white. Definitely helps to make sure the foundation photos are very clear and shot in bright, natural light, too.

      Delete
  14. Great post Van. I think the key is to be firm and polite about the prices you set. I have people query my prices in all contexts whether it be a market, Etsy, various other online avenues etc. I've also had people query my international shipping charges with comment always being is if I have it set too high. When it comes to pricing of an item (i have collected and understood values for a long, long time) I also do my research to see what the market is paying at the moment. Generally if some one queries a price I simply state what it is, I mention features and any faults if need be and etc and state that it's priced to sell. People might take some time to think about it more, they might walk away or in the case of online they might come back days later, but I'll generally still make the sale. I believe the key to pricing is also about your curation of stock. In my case I sell vintage children's clothing as well as vintage toys and children books, nursery items. All these items tend to solicit an emotional response. If their heart is screaming yes and giving them warm and fuzzy thoughts and reminders, they'll part with their money to have that feeling. As for shipping I get people who are obviously having that heart feeling about my items and will query my international shipping, so I simply state the truth which is that they are my countries charges and I don't pocket from shipping whatsoever. Where and when possible if an item does end up being shipped cheaper I refund the shipping difference. But my point is that even with the pricing of an item and shipping if people believe in you, what you're doing and trust your knowledge, they'll part with their money.

    ReplyDelete
    Replies
    1. Thanks so much for sharing. Definitely agree on the feelings, elicit an emotion and people will buy.

      Delete
    2. I never get over how perfectly Don nailed it in Mad Men:

      "Advertising is based on one thing, happiness. And you know what happiness is? Happiness is the smell of a new car. It's freedom from fear. It's a billboard on the side of the road that screams reassurance that whatever you are doing is okay. You are okay."

      Delete

I love reading your comments. Thank you for adding to the discussion! I always reply to any and all questions.

Like us on Facebook

Related Posts with Thumbnails