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Amateur Pricing


#1

Hello to all of the friendly and helpful Orchidians! I started
working on my jewelry designs just over a year ago, and after a year
of hard work and some difficult months with no sales, I am finally
realizing some success. However, I have discovered that I am
seriously underpricing my work ( some of the pieces need to be
double what they are currrently). I was reading some of the archives
about underpricing and I had a laugh reading about beginner pricing
mistakes. I saw myself in those scenarios as if they had been
written about me. Now that I have established my pricing problem, I
am unsure about how to proceed. I now have some wholesale accounts.
Since they have purchased my work at extremely low prices, I don’t
know how to raise my prices without alienating them and their
customers. After raising the price of one of my popular items at one
store, the owner told me that she was constantly receiving comments
about the higher price. Will I have to make a whole new body of work
in order to justify this price jump? Will I need to find new
wholesale accounts? I mentioned to one of my new accounts that my
prices were going to be adjusted soon and they told me that I should
raise my prices at the stores in wealthy neighborhoods, but not for
their store, which I think is a ridiculous suggestion. If any of you
have navigated such a situation, I would really appreciate hearing
about how you managed. Thank you forall of yourhard-won wisdom and
advice. It has really helped get through the transition into this new
phase of my career!

Natasha


#2

How about telling the stores your materials have gone way up in
price?? Or that you are forced to get your raw materials from another
source? Or that you made a mistake on what things actually cost,… eg
adding in taxes, higher postal charges, bank charges etc? Most people
have already seen that happen in their businesses. Martina


#3
I mentioned to one of my new accounts that my prices were going to
be adjusted soon and they told me that I should raise my prices at
the stores in wealthy neighborhoods, but not for their store, which
I think is a ridiculous suggestion. 

Hi Natasha, I agree. If you were raising prices because you thought
you were leaving money on the table (i.e., you feel you can get more
for your work), then that thinking might be justified. You are
raising your prices because you have determined the financial reality
is that you need you charge more to stay in business and make a
profit. That has no bearing on whether the retailer is in Beverly
Hills or a rural trading post. I think it will be hard for you to
raise the prices because the retailer probably realizes what a good
deal they have, and don’t want to give up the advantage.

I don’t know that there is an easy answer. Stick by your analysis of
the situation, and be prepared to replace old accounts with new ones,
if necessary. The other key factor, I feel, is the economy. Things
are tough all over, and with retailers watching their inventories,
this might not be an ideal time to “burning bridges” in favor of new
accounts that are not yet established.

Does the fact that people aren’t willing to pay a fair price for
one’s work mean it’s not worth the asking price? I don’t think so…
but when people are concerned about paying their mortgage and job
security, they’re less inclined to spend a few hundred dollars on an
indulgent purchase.

All the best,
Dave
Dave Sebaste
Sebaste Studio and
Carolina Artisans’ Gallery
Charlotte, NC (USA)
dave@sebaste.com


#4

I just wanted to say to this thread:( my politics are showing here)

In our North American Socialist economy, there are few things as
dirty as profits.

Profit and the necessity to reap our rewards for the work that we do
is frowned upon and indeed portrayed as “criminal” in the media.

There is very little we can do about the media, government and taxes
agenda, but we can certainly place value on our work, and refuse to
do business with anyone that negates the value of our work.

This is a specialized industry, but it has been ongoing for
centuries. There are always buyers, there are always sellers, many of
which will undercut and undermine the entire industry and it’s
integrity if they were actually given a foothold.

I refuse to budge on the price I place on my creations, an
expression of my intelligence and mind, a result of years of work and
experience.

The bitterness of poor quality remains long after the sweetness of a
low price has faded.


#5

A question, rather than an answer…

Has anyone in this situation tried raising their prices gradually
over a period of years? Kind of like the frog-in-hot-water scenario?
According to the hoary tale, if you boil the water quickly, the frog
will jump out, but if you raise the temperature ever-so-slowly, he’ll
stay put until you have frog soup. (I am NOT suggesting or condoning
actually boiling live frogs to test this!)

Has anyone tried this approach to their early pricing mistakes?
Steady increases over time, rather than one big jump? New pieces
would, of course, be introduced at their proper prices (and a bit of
a new direction probably wouldn’t hurt to help prevent inevitable
comparisons). If you can keep things together long enough for this
to work, of course. Kind of depends how far your original prices are
from the minimum you can survive on, I suppose. But we’re all used to
things going up every year, so I would imagine small price increases
would produce smaller protests, and give the retailer time to adjust.
But I don’t have any direct experience here, so I’m wondering whether
anyone has tried it, and what the results were. Did it go well, or
did it just draw out the complaints and protests over a longer
period of time? Anyone want to offer the counter argument about why
this is a bad idea?

Suzanne
Suzanne Wade
writer/editor
Suzanne@rswade.net
http://www.rswade.net
Phone: (508) 339-7366
Fax: (928) 563-8255


#6

Natasha, It is in the owner’s self interest to keep the prices the
same and in yours to raise them. As a good business person one must
be sensitive to their client’s needs. It sounds like your clients
are a good businesspeople. The balance it to be sensitive, but not
at your expense. If you think your client will drop you then offer
a compromise; phase in the price increase over a predetermined
amount of time.

But, let your client know that this is not a rushed or greedy
decision on your part. Explain the amount of work that is involved.
Get them emotionally involved in your work, and in you. This isn’t
something you import from a faceless laborer in the third world, it
is your life. In other words, sell yourself and your decisions the
same way you would anything else. If you don’t know enough about
selling, buy some books and study up on the subject. I can offer
some suggestions if you would like.

It helps to work with clients who see their business in a
synergistic manner. People who see that they are providing a
valuable service to the community, enriching not only themselves,
but their clients and, just as important, the artist who is the
economic engine of the entire equation.

Struggle, it will make you stronger.

Larry


#7
  Lets not forget the one thing that is most valuable, rare, and
cannot be replaced at any cost, TIME. I think many if not most
have gone through the guilt phase. Under pricing out of guilt or
worse the fear of rejection. 

I bolded the last partial sentence for one reason. This is a true
statement. When I first started dealing with general public, I
learned quickly that I did not have “enough friend and
acquaintences” to support my business. The general public was not so
understanding and easy to deal with. I felt a real need to sell and
in reaction did too often in the eary days drop prices, cut to the
bone just to sell an item. This was unwise and did not consider any
other factors beyond price in the selling equation.

The selling equation would make most algegra instructors go back to
the books to include so many variables! And guilt? Yes, was the
product inferior or the “personal design” not accepted? Well, drop
the price!! Wrong answer. The design was not for the general
public…ok for the arts business but not the general public. A
gallery piece, perhaps…for the general public most do not shop the
galleries. The arts crowd shops there. And rejection there is hard
to take but a realisitc take on the local crowd or on the piece and
your own creativity.

I found the mistake of lowering price to sell was truly mistake.
Now, I do both. The ones wanting the piece specially for them,
totally custom work…they will find it. The general public will
find some of what they want or I can get it from a suppliers catalog
if not in inventory.

Eager to sell and lowering prices makes it totally difficult to ask
what the piece is actually worth the next time around. Designer
pieces I do not discount or offer in sales. Commercial stuff is
discounted and put on sale as cash flow and turn of inventory
demands. Rather sell it at 30% off the first day than to keep it in
stock 2 years!

Just a thought. Blessing and Peace. Thomas.
@Sp.T


#8
Has anyone in this situation tried raising their prices gradually
over a period of years? 

I think this is actually what many people do without even thinking
about it. It comes naturally as you search out “what the market will
bear”. If you’re making a unique item, there’s not much out there
to compare it with. I try to make the price of a given piece relate
more to the rest of my work rather than to what else is out there in
the market. Gently nudging the price up is fair practice. By
gently, I mean increase the price no more often than annually, and
by perhaps 5-10%. I’ve also been on the gallery side, and have heard
other gallery people complain about artists “raising their prices
too quickly”, which seems to imply that it’s also accepted as the
norm from the retailer’s standpoint, as long as it’s reasonable. And
of course, the retailer won’t like the higher price no matter what,
but if they like your work, and sell it consistently then they’ll
adjust to the new price. Most gallery owners are aware that there
are very few artists getting rich, so they know their work’s not
overpriced, in general.

Bill
www.billgallagher.net