Stop Lowering Your Prices!

Preface:
I don’t pretend to be an expert on this, and I’m sure there will be MANY people who disagree and who choose to (and are successful) sell in bulk for cheaper prices. I write from my own experience as an artist, not from a survey.

I’m going to try to write this post as a calm request to my fellow Etsy sellers. It will take a great deal of deep breathing and some wine to get through it without getting angry, though, because this is hot button topic for me. Pricing handmade goods is always hard, always a gamble… heck, it’s one of the hardest things to get right as an artist.

But as it gets easier to own your own business, there are more and more people entering the industry of handmade goods who just — deep breath — who don’t know the damage they are doing to artists who are really trying to make a go at this business.

Please, please, please, try not to be one of these people.

Lowering Prices Is A Slippery Slope

If you have read my thought on Pricing Handmade Goods, you would know I have two mantras when it comes to this business.

1. You are an artist, not a manufacturer.
2. Never lower your prices to make a sale.

I don’t know how many times a week someone asks, “How much should I charge for _____?” in a Facebook Group. Most replies are fairly reasonable, but there is always, ALWAYS, some person who says, “Oh, I could never sell them for that much! I only charge $8 because that’s what other people around here charge.”

And there, my friends is the problem.

Sam sets his price at $20, Sally lowers hers to $18 to compete, then Paul sets his at $15 so he gets more sales, and Pamela comes out of nowhere with the same item for $10 and everyone wants to buy from her.

They are all competing in the price-dropping game, and everyone is suffering for it.

Poor Pamela has lowered her prices so much that she is putting in WAY more hours than all the others because she had more sales, but she is making less money for her time. She has unevenly swung the market, and now her competition is not making any sales, and she is burning out. All four businesses are in the verge of failing because Pamela wanted more sales, not to get a fair price. As my dad says, “100 pennies is still just a dollar.” Don’t kill yourself for a pile of pennies!

Undervaluing the Product

Sam’s product is worth $20.

And here’s the kicker: so is Sally’s, Paul’s, and Pamela’s!

How many times do you look at the price of an item and think, “I can get that at ______ for cheaper.” Even if it required extra driving and was an inferior brand or model, you would still think hard about paying less for a similar product.

It’s how we are wired as shoppers. We want a deal. So when the prices are dropped to an unreasonably small amount, it actually has the power to change the perceived value of the item from ALL sellers.

The item our artists are selling is now only worth $10 in the eyes of the buyer because that is what they “can get it for.” And when Pamela inevitably goes out of business due to burnout, the other three artists will be accused of “price gouging” even though they are only charging the real value of the product.

Read my rant about Elsa Hats, which followed this path here.

Seriously, we are sabotaging our own businesses and the craft business as a whole by dropping prices to get more sales!

When we work together by valuing our product based on materials and our time as an artist, our businesses thrive based on the product we sell and our talent as an artist.

Competition Based on Quality, Not Quantity

Let’s try this again with a healthier method:

Sam sets his price at $20. Sally sets her price at $20 as well, but she adds a few beads to her piece and it stands out. Paul likes the product idea, adds his own flair to it, and charges $20. Pamela makes a higher quality product because she has 10 years more experience in her craft, and she charges $25.

Sales stay fairly evenly spaced. All four artists are still in business because people can choose between 4 closely matched products, and the more expensive product is of higher quality, so they consider it worth the extra money.

I  must add that I think we are all “Pamela’s” at some point in our learning curve; I just hope we did it early, got it out of our systems, and learned that we are worth so much more than that.

When we work together by valuing our product based on materials and our time as an artist, our businesses thrive based on the product we sell and our talent as an artist.

Pricing your work fairly, using a materials + hourly method to calculate the price, allows all artists to succeed and encourages shoppers to look for artistry, individuality, and craftsmanship rather than just looking for the cheapest product.

But I’m Not Selling Enough!

We are in this together! Please, don’t lower your prices to get the sale! If you are not getting sales and you are using a fair calculation for pricing, please consider a few other options before you lower your prices.

1. Change your audience. It is vital that you are selling to the right group of people. If you only ever sell on Facebook garage sale pages and at flea markets, you will only ever sell to bargain hunters. If you sell at art shows and boutiques, you will sell to an audience more willing to pay for what your art is worth.
2. Display your products’ individuality. What makes your product different? What makes it better than the competition and, therefore, worth every penny? Sometimes you have to step up and improve your product when there is a lot of competition.
3. Market your experience. You are the face of your business. Just like the golden arches are the symbol of McDonald’s, you need to be the symbol of your brand. People want to buy from a reputable, experienced, talented individual. So market your skills, your years of experience, and photos of you working to gain the admiration of your followers.