Tuesday, April 15, 2008

Raising The Bar Price: A Business Person's Dilemma

The following is supposedly a true story, but because I don't know the minute details I won't mention the famous person to whom it happened.

To raise money for her church, Mary took a number of her delicious home baked pies to the annual bake sale. She set up her table and put out a sign saying, "Home Baked Pies, $5.00." Knowing her pies were of excellent quality and beyond any the standards of any ordinary pie, Mary was curious as to why they weren't selling, and was surprised at the minimal interest shown by the public. After thinking about it for a moment, she took down her sign and created a new one which read, "Home Baked Pies, $10.00." Within minutes people were hovering around her table of delicious pies and within a short time all of her pies had sold.

As a bargain shopper I price my products with the hopes that people will spot the fabulous value in everything I have for sale and hope they will take advantage and buy. However, it is sometimes the case that people believe they get what the pay for, and assume lower-priced items are inferior to similar items at a higher price.

If we, as craftspeople and artists, aren't satisfied with the number of sales we are receiving, could it be possible to sell more if our prices were raised?

Similarly, if we have a product that sells well at the price we have set, would it behoove us financially to raise the price in the spirit of supply and demand? Should we push the limits of our prices to the point at which the market will bear, or remain satisfied with moderate sales at the price currently listed?

I pose these questions to the buyers and sellers of handmade objects:

1. If you, as a seller, see low sales for a particular item or group of items, do you raise the price, lower the price, or remain inactive and hope for the best?

2. If you have been selling your handmade things well at the prices you have set, would you raise the prices to make your endeavors even more lucrative?

3. As a buyer, would you pay more for a handmade item or one-of-a-kind piece of art simply for its uniqueness, or do you expect handmade art and crafts found at shows and boutiques to be lower in price than in the general marketplace?

4. Do you, as a buyer, ever look at the price of a handmade item and say to yourself, this would be a bargain at twice the price and snatch it up before anyone else sees it?

Sellers, how are you pricing your items? Buyers, how much would you pay for handmade?


Jessica Snively said...

I also wrestle with this, because I price my items on the lower side, hoping that people will say, "Woah! What a great deal!" And then buy 10 million candles. But that does kind of make you think that people could possibly think my candles are poor quality, and I am pricing them as such, which is not the case, I am just desperate. If I see something similar to my items priced lower/higher than mine, I generally just stick to my price, but I do price based on the average price (that I have seen), but a little lower.

When I'm in the position of a buyer, I do expect handmade things to be more expensive because, in my mind, handmade means better quality and more unique, more environmentally friendly, and supporting a fellow crafter/artist, so I am willing to pay more for something handmade and special.

Anonymous said...

I am always leary of anything priced too low, especially when shopping online. I don't know why that it but too low scares me.

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