Pricing Your Work -- prologue
Pricing handmade work is one of the biggest hurdles for an artist to jump when building a business. Making a profit doing what we love to do challenges our beliefs about what we, and our work, are worth; and yet we struggle with making enough to make a decent living.
My advice to new creative entrepreneurs has always been to structure your pricing so that - at wholesale you are doing back-flips over your prices every time you sell even ONE of them. Then, multiply that price by 2.5 to arrive at your true retail price*.
The true retail should be the price you're selling to the public (on etsy, your website, etc). Then when a wholesale buyer comes a'calling, you can confidently tell them that your suggested retail pricing is 2.5 your wholesale price.
*Note: This advice is very different than "keystone" or doubling of your wholesale price that is the standard advice out there. In my current experience as a store owner, a 2x markup is simply not enough to keep a retail storefront business profitable. I'll cover this topic more deeply in another blog post, but for now, do yourself a huge favor and try to keep your markup at a MININUM of 2.2 to 2.5 (or more!) to gain a significant edge on your competition and keep your wholesale buyers happy!
If you change your pricing structure and find that you're not making enough money selling what you make at wholesale, then you are simply not pricing your work correctly. I've heard countless excuses trying to justify underpricing, but like anyone with a "real job" you need to make a decent amount of money to live. In order to do that, you must price your work to accommodate both true retail and wholesale if you ever hope to "quit your day job".
For many creative businesses, this means raising your prices RIGHT NOW. Yes. I said RAISE your prices *RIGHT NOW*. I mean, why not? If you're struggling every day wondering why you can't get ahead in your business, then you're not making enough to make a living. If you're not making enough then you need to do something very different even if it scares you.
Okay okay. Before you shut your eyes and cover your ears, please consider this:
If you don't think your work will sell for any more than what you are selling it for right now, then it is likely that one of these three points applies to your business:
You are not your target market
You are not selling to the right market
Your work is not ready for market
If you aren't your target market, then perhaps you really don't know what someone will pay for your work. Oftentimes the work we do needs to be priced well beyond what even we can afford in order to make a profit.
But you know what? That's okay! It's really truly okay to market to a new group of people that has more disposable income than you do right now. If you make real efforts to grow your business, you'll need more money to grow so you need to aim higher if you are ever going to make a living making stuff.