The Art of Pricing: Can I disagree with The Storque article please?
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Original Post
Someone in another thread linked to this Storque article www.etsy.com/storque/how-to/the-art-of-pricing-three-helpful-pricin... & I'd just like to put forward my opinions because I respectfully disagree with the advice in the article.
In regards to "Exercise One", it's not right to compare the pricing of a custom order with work produced in batches. Even in regards to one of a kind items where each listing is unique, & therefore more time-consuming, work produced as a result of a custom order is still worth more in the marketplace. Bespoke costs more, even if time & materials cost the same. It would be a mistake to price your regular product line as though it was bespoke.
In regards to "Exercise Two"...identifying your target market AFTER your products are designed, made, priced, marketed & offered for sale, is like shutting the gate after the horse has bolted. Establishing your target market is intrinsically tied in with product development, pricing & marketing. Finding out how much your market is prepared to pay for something after you've designed, costed & made your product, is a big waste of time & energy. In regards to market research, when targeting a niche market, I think a clipboard on the street is way too general & as a result, ineffective. Much better to study the activity of competitors on (& off) Etsy & to survey people who frequent places (such as forums) where there are potential target markets (offer an incentive - such as draw a free gift from all people who complete the survey).
As for "Exercise Three", once again, it's all round the wrong way! Sure, firstly consider how much you hope to earn per annum. How many products do you sell per week? How much of that is gross profit? How much is net profit? How many more units do you need to sell per week to meet your objective? Is it possible to make, list & sell that many units per week? Can the market bear a price increase (hence the need for market research)? Is there another product you can make that will tolerate a bigger mark-up & therefore more profit?
Inflating your pricing just because you hope to earn a certain amount per annum, without considering costing & market research, will probably give you a very unrealistic price & possibly not good value for money for the customer. The order should be something like...
Market Research:
Identify your market, pricing, demand, etc.
Product Development:
What are you making & how are you making it? How long does it take to make - is it feasible?
Costs:
Materials, equipment, marketing, etc. What will your profit margin be? When will you break even? Will it be feasible to meet your income target?
Anyway, that's just my two cents!
Posted at 1:46am Jun 21, 2009 EDT
Responses
Marking. I haven't had a chance to read the article yet but I definately agree with you that bespoke items are worth more!
Posted at 5:07pm Jun 21, 2009 EDT
you can disagree with whomever you please, its not a one size fits all sort of thing you know. what works for one person will not always work for everyone
Posted at 5:10pm Jun 21, 2009 EDT
Question, what are "bespoke" items, I've not heard the term before, then I want to go back and reread what you wrote magic jelly because I too read that article with some skepticism.
Posted at 5:11pm Jun 21, 2009 EDT
I agree a little with you, a little wth the storque.
I think it all depends on the typ of items being sold. Here on etsy it is so varied that what is good for the goose is not necessarily good for the gander.
Posted at 5:11pm Jun 21, 2009 EDT
Great advise. I always get confused when blanket suggestions are given in articles like that, cause there are so many variables for each shop.
Photography, knitting, sewing, etc. all have different points in these kinds of situations.
Posted at 5:15pm Jun 21, 2009 EDT
You are right majicjelly but so is the storque article in a way, because a lot of people join Etsy who don't really know about having a business plan, marketing, finding ones niche, running a business, etc, etc. They learn once they get here and grow and develop as they learn from the forums and from experience.
Posted at 5:18pm Jun 21, 2009 EDT
I know where you are coming from. I always think that I know my business better than anybody so a sort of "one size fits all" approach will never work. I like hearing your thoughts MJ!
Posted at 5:18pm Jun 21, 2009 EDT
I have not read the Storque article either, but I do tend to think like you, magicjelly...although it took me a while to find my tagret audience, lol!
Posted at 5:20pm Jun 21, 2009 EDT