This is going to be an explanation of pricing - something which is both a science & an art. I admit that pricing my creations was always a very nebulous thing before I managed a Boutique space. Over the last two years I've learned a lot about the how's and why's of identifying and hitting the target price for an item.
The goal in pricing an item for retail involves very tangible and documentable things. We will discuss this in more detail over this week as I break down the categories and share things I've learned from courses I've taken as an artist, and the experience I gained over the last few years that convinced me I was ready to move into pursuing my passion full time. The primary considerations are:
Actual Cost of Goods - this would include the full price of the items used to make the piece being sold, tax, shipping, etc. When you purchase supplies in bulk, or larger amounts, you would divide the cost by the number of items.
Your Time - this is the value that your time and effort brings to the project.
Overhead - this is all of the non-item-specific costs of doing business. It would include an offline physical space, the cost of your e-commence site, charges attached to your point of sale, tags, bags, shipping, bank costs, market entry fees/percentages, insurance, etc.
Yes, there are formulas and, I admit, this administrative side of being an artist was the aspect that most intimidated me and kept me from launching out sooner.
If you get any of these categories wrong you will have a problem - price your item too high and it won't sell, price it too low to cover these things and when they sell you will have lost money. Either of these leads to a failing business and are not sustainable long-term.
The final consideration is less tangible. What is your target customer willing to pay for it? Ideally, you will be able to create a price for each item that is reasonable and is in the window of what your customers are willing to pay for it.
Over the course of this week I want to dive into these categories, and share the things that I've learned. I will also be sharing tips for how to hit the target price window - as well as discuss some things that play into the art of pricing items as this can sometimes be even more important
Whether you specialize on one thing that you are mass producing, or, like me, a variety of artistic pursuits that require more precise record keeping and formula applying, I hope this will provide some practical information you can apply to make sure whatever you're selling is priced the best it can be.
For now, I want to encourage you that no matter what pricing you have now, if it turns out it's not working, you can just change it. We'll get more into this as well, but I want to make sure I say that if you realize you've missed some aspect of this, or decide you're going to need to change the price of absolutely everything, this is not a reflection on you or your value. I didn't learn these things in school, and there has been a lot of trial and error. I grew up with my mother doing sales of some of her original creations as well as being a wholesale rep for several different lines of loathing and jewelry, and I helped her with different things, but I still wasn't the one creating these numbers.
I am a firm believer that knowing what you know is knowledge. Knowing what you don't know is wisdom. Learning to see the line, and move it, is the goal of education. I'm sharing what I've learned because when I went looking for it I didn't find it presented in a way that helped me to apply it to my situation. It took tracking down information from a lot of different sources, on each of the topics, and people asking me for the information of things I didn't know I needed before I felt confident with the administrative aspects of being an artist and selling my own products.
I hope this will be a helpful resource - and please share things you've learned that I might miss. I'm still learning new things all the time - I know there's a lot I don't yet know! We're all in this together.
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