You need to raise your prices.
Have only about a quadrillion people tell you this about your products?
Or deep in your heart, you know you're not getting paid what you're worth.
But you really love making your products.
You could spend all day just making, creating and crafting in your workspace.
Just because you love doing it doesn't mean you should undercharge!
In your business alone, new supplies need to be bought, marketing needs to be done and most importantly, your time isn't free.
Take that beyond your work: bills need to be paid, hungry mouths need to be fed and your savings need to be, well, saved.
Stop working for under minimum wage.
Stop working for zero profit.
You can build that business of your dreams that supports you and your family.
Take the first step and raise your prices.
The reality of raising prices is not as scary as it feels in your head.
Just let me hold your hand and follow me:
How to raise your prices
Use my free pricing calculator (just plug and play!)
Get a copy of my free pricing calculator here and follow the instructions listed on how to use it.
I've set it up so that all you need to do is plug in your own numbers and it will automatically feed you your final wholesale and retail prices.
You just have to get your hands dirty and figure out what your supplies cost (I hope you kept your receipts!) and how much your hourly rate is. More on that below.
You might be surprised to find that you're severely underpriced.
You might be panicking because the final retail price is so much more than you think anyone would pay for your product.
If you truly believe that, there are ways to cut down on costs so your prices aren't so high:
- practice your skill, learn new ones and get faster at your craft – this lowers your time spent on making each product
- buy your supplies in bulk – this lowers shipping costs and gets you wholesale discounts, effectively lowering your material costs
- consider a different design approach – one that achieves similar end results while saving you a lot more time (remember, only you as the artist will notice the difference, your customers most likely will not)
- create in an assembly line – instead of making one product, work in bulk and make multiples of each design at once. This lowers your average time spent on each item
- source for cheaper materials – cheaper doesn't always mean lower quality. If you can't make that compromise or can't find any suppliers, be ready to communicate clearly with your customers why you've used the best materials and how this helps them once they buy your product
- outsource – hire help so you can focus your valuable time doing money making activities
How much money per hour do you want to make?
Make a list of all the recurring expenses you have to pay for in both your business and in your personal life.
You need to make that much money every month to stay afloat.
But you obviously need to make more than that if you ever want to live a happy, secure life and eat out or go to the theaters to catch a movie every now and then.
Assume you work 40 hours a week. That's 160 hours per month.
Divide your total monthly expenses by 160 hours.
That's how much money you should be paying yourself at the minimum.
Survey your market
What are other shops charging?
Search in Google for your kind of product and check out some of the shops that might be similar to yours.
Don't do this search on Etsy, because almost everyone there undercharges.
Undercharging hurts everyone in the market, so don't do it and don't be a part of that system.
Once you have an idea for what everyone else is charging, ask yourself:
What kind of brand do you want to be?
Do you want to be the affordable store down the block that sells in volume?
Or do you want to be a premium brand that sells in the poshest, richest neighborhoods, the kind that (figuratively) serves wine to customers that drop by?
Your answer determines whether you should aim to price above your competitors or below them, if you're able.
To announce price hikes publicly or not?
Once you've done all of the above, you're now ready to change all of your prices in your shop.
Your question now is:
Should you tell your customers about the price increase that's about to happen?
Or do you just do it quietly like a ninja and hope no one notices?
You could use this price increase to drum up some business.
You could email your customers and make a post on your social media about when you'll be increasing prices.
You'll tell them they should buy now before the prices go up.
You don't have to apologize because you want people to see that you're confident in your value and your work.
I'm not in favor of this strategy because after you increase prices, you'll hear crickets.
Your regular or repeat customers have already bought all they wanted and now you have to look for new customers who appreciate your work at its new price.
There's also a sense of anxiety and stress that happens around making public announcements like this.
You're opening yourself up to be questioned and a lot of fuss comes with having that conversation with your customers.
Instead, just do it.
Go ahead, raise your prices.
Yup, right now.
Don't say anything about it, don't make an announcement.
Business is as usual. Carry on, folks.
As the artist, we tend to think everyone will notice when we make a subtle change.
It's very likely that your customers won't even notice.
You'll experience less friction and mentally you'll feel much better.
I've doubled my jewelry prices since I started and I actively position myself as the premium brand.
I back up my prices by designing the most realistic food jewelry in the market, I provide an amazing customer shopping experience on my website and I have credibility from tons of press mentions.
What about you?
If you're feeling stuck, we can chat privately on the phone and figure out what your pricing should be.
I'm not only a creative maker like you, I also bring a business sense to our partnership that will help you make more money.
Book a consulting call with me before spots run out!