Pricing Part II - Underpricing

In the last post I talked about the subject of overpricing. Now I move onto underpricing your work.

I actually think that in the crafting world, this is done more often than overpricing. When we as handcrafted artisans under price our work, we are not only under-pricing ourselves, but all the rest of the artisans we represent. Now, I know, for many of you, this may seem like it's just my own opinion, but I think I am in good company on this issue. Let me explain.

For some artists, an idea or design is formed in an instant; for others, some pondering may occur, and for many more, the design is done once, then twice, and sometimes even more before the artist is truly satisfied with the results. Once the design has been fabricated, the idea is realized in the form of the finished product. There is so much more that goes into a piece than just the cost of the materials. The amount of time the artisan spends from start to finish, including the design, can be a matter of minutes, hours, sometimes even years. It is this intangible piece of the pricing puzzle that I believe, many artists and also buyers forget about.

I believe that any good pricing formula must take the designing of an item into account before reaching the final price. One thing that I have seen on Etsy many times, are artists who will sell a pair of earrings, for example, for a mere $5. Yes, you heard it $5! For a pair of handcrafted, uniquely designed earrings! The designs vary from very unique to simple, but, I do not believe that the designer is doing themselves justice!

Let me put this into perspective, and I invite all of you to visit a store near you. It can be a store department store at the mall, Walmart/Target/Kmart, boutiques, flea markets. Pay attention to what you see and what the prices are. Then pay attention to the quality, the craftsmanship, the uniqueness of the item. When you look at those knitted scarves, for example, chances are they are made in China/Japan/Hong Kong/Mexico sometimes the USA. They are all alike, mass produced. Sometimes they are made using labor costs of less than $5 per week by very hard working people who deserve so much more. Most are made by a machine. After your purchase, your friends can admire your purchase and go get one for themselves, one exactly the same!

Now, if you want the scarf in a different color or a bit shorter or longer, do you think you can just ask the sales clerk to honor your request? The answer is almost always going to be NO! But, find an item from a handcrafted artisan, and you will almost always be able to get your item made exactly to you color and size specifications!

If you are a fellow Etsian selling $5 earrings, and you feel you are doing fine because your cost was only $3, and you are just doing this to cover your costs because it's your hobby, nobody can tell you to charge more. But I am here to tell you, that if ALL handmade crafts people charged what their items were REALLY worth, and in the case of the $5 earrings, you should be able to easily get at LEAST $15, it would help the entire handmade community. We owe it to ourselves not to undervalue our work.

There is another piece, which I touched on before, sometimes, when you find yourself asking the question "why aren't my items selling?" It could be, because, you have priced your items TOO LOW! There is the perceived value of an item. Again, I invite you to put yourself in the shoes of the buyer. Pretend, for a minute, you are at the mall. There are two shops, both very similar in decor. One has every pair of earrings in the $50 - $150 range. The other, selling very similar items are priced $5 - $30. As a buyer, you are definitely going to assume, that the higher priced shop's items are somehow "worth" more. But are they?

Now let's say for the sake of argument, they were all purchased from the same vendor, the merchandise is exactly the same! Yet, for some, the cheaper items will be passed over, because the perceived value is "cheap". When you pay the higher prices, you expect more, you expect quality, and THAT is EXACTLY what you get when you buy a handcrafted item!

I'm going to end this with one last thought. Not all handcrafted items are of high quality. We all have our learning curves, the learning and honing of our skills. This is why I highly encourage all of us in the handmade, handcrafted business to be sure and only place for sale items for which we hold in the highest regard, those items that we are truly proud, and then charge what we are worth!

Let's make it a vow -- we will not undersell ourselves!

3 comments:

Whiskey Tango Foxtrot said...

Thanks for this post! This is exactly what I'm finding frustrating about Etsy! I think that for my work I'm pretty well priced (for some things I'm under just because I'm new) but I can't compete with, well, hobbyists who undercut me by 50-75%. :(

Kathleen Krucoff said...

All of your posts on pricing have been very helpful. As a result, I have nominated you for a lemonade award. You can read more about it on my blog: http://kathleenkrucoff.blogspot.com/2009/03/another-lemonade-award.html

I appreciate what you have done to help artists like me and others.