Back to the issue of pricing.
I recently wrote about how I had to make a dramatic increase in the price of my cranes, and I want to explore a little further one of the traps that caught me, and I think sometimes catches other people in a pricing bind.
Have you ever said something along the lines of, "I want people to be able to afford it."
When I have talked about the crane pricing with people, who were often encouraging me to raise the price, I would say something along the lines of, "It's just an ornament. How much will people really pay for it? I can't really charge more for it."
Maybe. Maybe not. I had raised the prices incrementally a few times, but never as much as I really should have been.
The question that is being ignored in this type of market focused pricing is, "Can you afford to sell it at that price?" Are you essentially subsidizing your product? And is that really your intent?
When I finally started to look at the grim reality of the time I was putting into the cranes, and how much I was charging, I began to realize I was underwriting people's desires to own a crane, without taking fully into account my time and expenses. I am usually pretty generous, but even I saw the extremes of the situation I had created. I responded to the market demand for more intricate patterns on the surface of the crane, without adequately compensating myself. There was important information that I refused to see. Looking to the market is important, but not all the important information is found there.
Prices are often based on "How much would someone pay for this?" It can be easier than figuring out actual costs. And, it is easier than trying to determine how much our time is worth.
But, is it sometimes translated into, "How much am I comfortable asking someone to pay for this?" "Will people think less of me if I charge too much?"
Some people might. But some might also think less of you for charging too little. Guess what, it doesn't matter. What matters is what you need to earn to make a reasonable wage for your efforts. You are the one with the best information about what that might be. Not the people with all the opinions. They might also think that your hair is too long or too short. Or that you should wear blue more often. People have opinions. It does not mean we have to tie ourselves up in knots trying to satisfy everyone's perceived opinions and needs. We need to take care of ourselves, and respect our time and effort. Setting a fair price...for you, as well as for the market, is where to begin.
What if the product is just too expensive if you make a fair wage?
There are many options at this point. You can stop selling, and decide you want to just make things for the joy of it. You can consider how to make the product for less. What steps or elements can you eliminate? Think about what are the essential elements of your work. Can you focus more on this, and eliminate the extraneous? Can you purchase your materials for less? Exercise your creativity in a new way. Brainstorm about how to make your product affordable and profitable.
Since I have raised the price of the cranes, I have not received any new orders. But it is summer, and it is typically slower. New jewelry orders are more than taking up the slack. In the end, I am fine with whatever happens. I could not afford to continue to wear myself out. I showed one of my accounts the new solid colored cranes this afternoon, and she liked them better than she thought she was going to. She said she will order some of them in the fall.
The joy of doing work you love is quickly erased when you work your fingers raw, and find your bank account is not reflecting your energy expenditure. Making art is doing something wonderful for the world. But, you still need to make a living. Don't lose sight of that essential truth.
Tuesday, July 22, 2008
Back to the issue of pricing.