Search results (tags) for: "pricing"

Seller How-to: Guiding Buyers with Shop Sections

2008-11-12T12:00:00Z

So sellers: you've stocked your shop with holiday goodies, you've taken great photos, you've cleared your calendar, and you are ready for the holiday stampede. Your shop looks fly, and you need your customers to look at more than just your cute featured items. Enter shop sections. Help your customers hone in on what they need, and make it easy for them to cross off each item on their holiday shopping lists. This is the time of year when we shoppers are super organized.

Organize by Shipping
Recent featured seller topsyturvydesign has a great way to get her customers looking at crafts that will ship to suit their holiday needs. This is especially excellent for the nearing Thanksgiving holiday, since she has made it easy for customers to look at the hats that will get to them on time.

Organize by Size
Another great use of the Shop Sections is to organize by size. As a shopper, I am so grateful when I can go right to the clothes, rings or shoes that fit me. This is great even for totes and bags, as it can be difficult to gauge size from a photo unless there is a scale reference. Small, medium and large is an economical way to use your shop sections, as you can create up to ten.

Organize by Price
Bath and body sellers, or other sellers that make use of gift baskets or groupings, can get a lot of mileage from using their shop sections to organize by basket and price. During the holidays, many shoppers have a budget that they have in mind for each one of their special people. For example, if I know that I'd like a luxurious bath basket for my mom, I am chuffed when I can use a shop section to go directly to: Gift Basket 70-100 dollars. And for my cousin? Gift Basket 30-50 dollars. Perfect. Check out this how-to on bundling items. For more info on pricing, see the Art of Pricing series.

You might also find this how-to, about introducing a new line, useful.

Don't forget to check out the Seller Handbook - all our how-tos about running your Etsy business!

Comment below if you've used these techniques and seen the effects! Shoppers, do you like to shop with sections?

Etsy Finds: Nine Gifts over $100...

2008-11-03T08:16:00Z

Looking for a high end gift that packs a punch this holiday season? Use our "Over $100" Gift Guide to find the perfect gift. Below you will find a selection of luxurious handmade works that would make a lasting impression.

Victorian Children Original Art Whirligig on Solid Wood

Change the shape with your changing mood; this whirligig would make a great gift for your boss. By SleepingForest, $350.

View item | View Shop | Add to Etsy Favorites

SILK QUILT single

Give the gift of luxurious sleep with this silk quilt. By pamelatang, $330.

View item | View Shop | Add to Etsy Favorites

Handloomed-knit Sweater

Give your mom the gift of style with this fashion forward sweater. By aprildawnreigart, $245.

View item | View Shop | Add to Etsy Favorites

Balancing bird ring

Got a flighty friend? This silver bird ring will be sure to impress. By ShereDesign, $100.

View item | View Shop | Add to Etsy Favorites

Oversized Leather Satchel with Metallic Bronze Detail

Know someone who can't keep all their essentials in one place? This leather satchel will bring them the gift of organization. By blinkhandbag, $162.50.

View item | View Shop | Add to Etsy Favorites

Elegant Swan Teapot Set

Want to stand out this holiday season? You'll be sure to give a one-of-a-kind gift with this artful swan set. By dbabcock, $299.

View item | View Shop | Add to Etsy Favorites

Small Smile Ring sz. 7

Send your smile to someone special so they can keep it close all the time. By margauxlange, $110.

View item | View Shop | Add to Etsy Favorites

Bones

Give this durable duffel to your jet-setting friend and fill it full of goodies from our stocking stuffers guide. By feeldesign, $275.

View item | View Shop | Add to Etsy Favorites

SOLO pendant light / MODERN

Impress your leading man with this unique handcrafted microphone lamp. By resurface, $200.

View item | View Shop | Add to Etsy Favorites

Looking for more Etsy Finds? Try these links:

Gift Guides | Storque Featured Buyers | Trends | Gift Ideas

Need a daily fix of Etsy Finds? Sign up for the Etsy Finds e-mail! Conveniently delivered to your inbox!

Economics 101: Alchemy

2008-04-08T10:30:00Z

JJMFinance, a Certified Public Accountant, sees the world through green-tinted glasses and he's out to help Etsy sellers with their businesses. He looks at Etsy site features and sees economic case studies. And we love it! Below you'll find his useful interpretation of Alchemy.

Do you remember your economics teacher and the way he could put you to sleep after lunch showing your graphs and blabbing about supply and demand? Maybe he could have kept your attention if he was talking about Etsy’s new system for requesting custom-made items — Alchemy. Alchemy is a great example to see a simple economic principal observed — supply and demand. Keep reading to learn more! Not only will you get a quick refresher course in economics, but you will also learn a few ways you can apply these principals to the way you run your Etsy shop.

Supply
Supply is what everyone offers for sale. These are the thousands of items listed on Etsy. There are over 14,000 different red earrings currently listed on Etsy — different varieties for different people. This is the supply of red earrings.

Demand
Right now there are many buyers surfing the pages of Etsy looking to make purchases. A few of those are actually looking for red earrings right now. They are browsing through the currently listed supply seeing if their demands have a matching supply in both design and price. This is the demand for red earrings.

Where Supply Meets Demand
There are a couple of options that can happen at this point. First, the buyer could find a pair of red earrings that are currently listed that meet their stylistic and price demands and a complete transaction could occur. The second option is where Alchemy makes its appearance.

Alchemy is just another point in the marketplace where supply and demand can meet and fall in love getting married in something called a transaction. This is really a new way for crafters and customers to meet in harmony — creating a more efficient marketplace where more buyers and sellers are both happy.

Application For Your Shop
You can actually look at the current requests and bids in Alchemy to get a mini picture of how supply and demand are interacting on Etsy.

You can use this to:
1. See potential market niches that you could fill with your business. If you consistently see people requesting yellow sweaters with green pickles appliquéd on the back, you can probably assume that if you started making these, you would pick up some of these sales before they reached Alchemy.
2. If you see no one bidding on a really low priced request, you can probably assume that this price is way under the true market price. You can then compare this price to your similar items.
3. If you see people consistently requesting a product for a much higher price than you offer it for — you can probably assume that your prices might be too low.

So the next time you browse through Alchemy, don’t just see what items you could bid on, but look for opportunities to learn about the Etsy market. Use these observations to then help you decide on new products to expand in your own Etsy shop and your current pricing strategies.

Learn more about Alchemy here.

Etsy in the Press: Art of Pricing in Venus Zine

2008-03-03T16:00:00Z

The latest issue of Venus Zine #29 is out! The Storque is on a mission to provide indie entrepreneurs with useful info on running businesses. Venus Zine syndicated a post from Beth's series here in the Storque, the Art of Pricing, and so we're very proud to see one of our little articles fly into the world of print magazines and land on the newsstand. It was also very cool to see our downstairs neighbors, BurdaStyle, represented in an ad right below the article. Who knew the pages of the magazine would so perfectly reflect our physical space, over here in Brooklyn?

Some of you may remember this teaser post from Venus' photo shoot here at the Labs. Now that the issue is out we can spill the beans. Venus DIY editor Justina Blakeney, our most recent Featured Buyer, constructed a very cool bulletin board using many recycled materials; the prop styling and photo shoot giving us a behind-the-scenes look at the magazine.

Check it out in the magazine and let us know which Etsy sellers were featured!

Search Update: Filter Results by Price Range

2008-02-05T19:54:00Z

Today we’ve added the option to filter your results in items: tags, titles searches by a price range!

Search for items using the search bar at the top of any page, and you'll see the new Price filter tool on the right side of the screen.

Simply enter a minimum and a maximum price, click on “Show Items”, and you’ll see only listings within your price range.

With this revision we’ve also increased the number of results shown per page to 21, from the original 15 (It always has to be divisible by 3 for the gallery view!). We think this will make it easier to browse through more listings more quickly.

Capping off this update, we’ve also removed the ability to sort items by their views on all pages. This particular feature has been broken for a while now, so we’re going to keep it out of the public eye until we can get a better solution online.

Let us know if these changes are helpful!

Please address all comments and questions to the associated forums thread.

Shop Makeover Series: Introducing a New Line

2008-01-14T13:10:00Z

As part of our Shop Makeover series, we're sharing some tips and tricks for organizing your shop. You can think of this as introducing a new line or just using the sections function of your shop to better entice customers.

One of the fastest ways to give your shop a makeover for the New Year is to create and introduce a new line in your shop. You can create a new look and line by utilizing these handy steps:

Change and reorganize your shop sections.

You can get creative with the names of your sections, but remember that your customer should be able to intuitively and easily navigate your shop without being confused by section names that are too abstract.
Organizing and naming your sections by category, function, size, shape, color, price, style, gender, age, etc. are all great ways to help your buyers navigate your store; just remember to name and organize in a cohesive theme that your shoppers will understand.
An interesting way to make your sections stand out is by manipulating the text. Changing the names of your sections to all capital letters or putting a space between each letter of the section names will make them stand out from the crowd.

Offering a new design or upgrade a previous line with new price points.

Been itching to create a new design? Now is the perfect time to make one and coin it your “New Line for the New Year!” Surprise your shoppers with something fresh to look at and keep them coming back to see what new designs you'll come up with next!
A new line could be a variation on a current design or even something as simple as offering your best sellers in new colors. If you offer a lot of items within one style or medium, try coming up with a new item using the same medium and style but with a new twist or function!
Try introducing a new line of items that are at a different price point than the rest of your items. For example, if you make a lot of high-end items with pricier price tags, try introducing a smaller scale (that still fits in with your current line) line of items with a lower price point to match. The same goes if you tend to make and sell things at the lower price end of the price spectrum; go ahead and make a few more exclusive items. Different and varied prices can attract a new range of buyers. Someone who buys small at first is likely to come back and buy more higher priced items once you have built that initial trust during the first transaction (for more on this see Beth's pricing series).

We can't wait to see your new lines and sections! And don't forget to check out the other posts in this Shop Makeover series. Please comment below if you have questions and tips of your own.

Remember to take your before and after screenshots. Upload them to flickr and share the link here. At the end of the month, we'll be choosing the most radical Shop Makeover success stories!

Etsy Seller Inventory Worksheet

2008-01-03T13:41:00Z

This is the first in a series of downloadable business tools for our community. We really want you to be successful in the new year, so I hope you can use these spreadsheet to keep your shop organized! This will help you to track your inventory, shipping and profits, making your life at tax season a breeze. This spreadsheet will help you figure out your monthly profits, track orders, look over top selling items and keep on top of your shipping.

Tips on how to use the spreadsheet are also included, but if you have any questions, feel free to send me (or Etsy business admin Beth, aka bethela) a convo and we can try to help you out.

Below is a screenshot of the Excel file. Click on it to download the file to your desktop.

Oh, if you don't have Excel don't fret — this worksheet is compatible with the free program, Open Office. Google docs This is also a good option for those of you who are into the idea of working online.

No one spreadsheet is going to work for everyone. And it would be great to gather more options here for Etsians.

There are also a few really helpful spreadsheets made by Etsy sellers for sale on Etsy. Check out Serena, LLDesign and JJMFinance to start.

Coincidentally, Etsian chrisparry recently filled out the Storque pitch form and offered to share one of his spreadsheets. It helps you calculate your prices. Thanks, Chris! Any other spreadsheet savvy Etsians want to share your tools? Comment below!

For more info on pricing, see bethela's Art of Pricing series on the Storque.

The Art of Pricing: Bundle Up on Your Way to Higher Sales

2007-11-21T12:05:00Z

A product bundle is when several items are sold as one combined product. For example, we see this at McDonalds and other fast food restaurants that bundle meals, such as the “Value Meal,” where multiple items are sold for slightly less than the items individually. In this example, the psychological cost of purchasing all those items is lowered and the buyer feels like they are getting a great deal. A bundle can go by many names: gift sets, package deals, collections, a set, etc.

So why does bundling work? Many times buyers approach their shopping with a price range in mind. For example, Ms. Etsy is willing to pay up to $90 for a handbag and $50 for a super cute hat. TeenAngster, on the the other hand, will gladly spend as much as $120 for the handbag and up to $20 for the hat. Ms. Etsy is willing to pay more for the hat, but is also interested in the handbag. TeenAngster is willing to pay more for the handbag, but is also interested in the hat. Using a bundle you can create an attractive package for both Ms. Etsy and TeenAngster. In this example you could offer a $10 discount to buyers who purchase both a hat and a handbag, creating a bundle priced at $130. This will increase your sales because both TeenAngster and Ms. Etsy would both buy a handbag and a hat. It can be challenging to anticipate all buyers' needs, but creating combinations like can make more of your products sell.

Bundled pricing can also be viewed as a service to customers. Bundles can be used to simplify the purchasing decision, coordinating the purchase of related or like items. Many people don’t want to expend the effort to make these decisions and would gladly pick the item that is already coordinated. For example, here you can see a bracelet and earrings set.

Another example is when multiple products work best together. By combining the onsie, yoga pants, bib, and burp cloths, the seller helps the buyer pick items that work well together.

Or in this example, a pair of pants and a top — while they could we worn separately — has a whole different look worn together.

Now that it is around the holidays, we see many gift bundles. This is a great way to market to the harried shoppers trying to shop efficiently for special gifts. This could be something like 2 handmade bars of soap and a cream, maybe at a 10% discount to the items sold separately, maybe at a slight premium because of the wrapping and presentation.

A value bundle, such as buy two get one free, or free gift may be used to draw the buyer in when they might be on the fence to purchase the item. The example below combines the concept of simplifying the purchase decision with the coordinating pants and top, with the concept of the free gift as well.

Bundled pricing is a strategy to attract a large range of buyers: buyers looking for deals, buyers looking for convenience, or buyers looking for advice on items that compliment each other. Bundled pricing may be accompanied with a discount, but it doesn’t have to be. As a seller of handmade goods, you can save your shipping efforts by selling more items together. As a marketer of handmade goods, you can use bundling to maximize your sales from each customer you attract.

Beth is an admin at Etsy on the Business Operations Team. She is writing about pricing in a multi-part series, so ask her your questions in the comments below.

The Art of Pricing: Tiered Pricing

2007-11-14T09:31:00Z

There are several ways to attract and convert buyers in your store. One way may be through tiered pricing: when you offer multiple price points for a customer to consider. The car industry is a great example of this. There is always the base model, good but with very few bells and whistles. There is a middle level, with a few of the upgraded options and features and a premium level that's decked out with all the features and special options.

So what does the car industry have to do with your store? Not much, but we can learn from how they price. Great products at multiple price points can give a larger range of potential buyers an opportunity to buy something from your store. Creating different price points may also be good to:

Induce trial — A lower priced item may be just what a buyer needs to dip their toe in the water. If they fall in love with it, they may opt in for the higher priced item the next time around. Mary aka contrary says, "A lower priced items may get people to try your items and build trust."
Build a reputation — This is especially important if you are a new seller. Some buyers may not want to take the leap and by a $250 necklace from a brand new seller. Selling some items at lower price points may help build your reputation faster and build awareness of your store.
Target new customers — Some customers may only be interested in your more expensive items, for instance jewelry with semi-precious stones or made of silver or gold. Some may be interested only in the less expensive items and some might just fit in the middle. If all your buyers are in the high range, try some lower priced items to attract a new set of customers. Appealing to a wider variety of sellers can increase your overall sales.
Create excitement around your shop — Higher priced items may also draw some attention to your store. Daniellexo stated "a higher priced set of items can create excitement around your store. Everyone wants to know why it costs so much."

A couple of examples:

One seller who has done a great job of this is discomedusa. She has lots of great items around $25, like these Blade hoops and this Annelid necklace.

She also has items in the $100 range, like this filigree cocktail ring and this matrix ball necklace.

She also has the Diatomateous Necklace, a showpiece necklace or what I would like to call "buzz" piece at $2500.

This unique piece gives her store additional character.

Basilthecat also uses different price points in her store. Examples from each price point include an $20 Eight ball necklace, a $54 Rhinestone Cowgirl Necklace and a $140 Good luck necklace.

This is another pricing topic to think about as you strategize about your store as a whole. In previous articles we explored competitive pricing and understanding your costs which were focused on individual items. Tiered pricing takes into account the items you already have in your store and the overall positioning you may want to have. This is something worth exploring to see if it works for you.

Beth is an admin at Etsy on the Business Operations Team. She is writing about pricing in a multi-part series, so ask her your questions in the comments below. Last week's topic was how Theories in Discounting. Next week's topic is Bundled Pricing.

The Art of Pricing: Theories in Discounting

2007-11-07T03:08:00Z

We have received several inquiries about how to conduct a “sale” or how to discount. Most people believe that discounting is a pricing concept, but really it is a marketing concept. When thinking about discounting you need to think about how this discount compares to other potential marketing strategies you can implement, such as promoting your items on your blog, offering free gifts or purchasing a showcase spot. A discount is just one way to entice a customer to buy.

A discount or sales promotion is intended to be all about “action” or an immediate sale. Many use it to create the sense of a getting a deal or a “one-time-only” sense of urgency. These types of promotions should be used carefully and evaluated against the other promotion options.

A discount or sales promotion can be used to:

Induce trial – If you are introducing a new product or entering a new market (such as opening a shop on Etsy) one way to entice people to try your product is to have an introductory price or limited time discount. Many Etsy sellers report that a portion of their sales are made to repeat buyers. If you can establish the initial relationship with a buyer through a discount, it can be worth it in the long run.
Encourage additional purchases – This type of discount is when you discount an additional item, such as “Buy one get one for $2 off.”
Support volume purchases – As I discussed in the “Preparing for Wholesaling” article, discounts will encourage stores and other resellers to stock your products.
Reward your best customers – Some use “friend and family” discount codes to continue to attract top customers.

A few ways to do this:

Direct price discounting – Offer a discount to the normal selling price. Remember increased sales gained from price promotions are at the expense of a loss in profit — so use these types of promotions with care. You also must be aware of the possible negative effect of discounting on your store or reputation. You do not want to train your customers to buy on a deal. Vanessa suggests, "You could experiment with a seasonal sale, which frames your discount as a limited time offer meant to move last season's inventory."
Free Shipping – Shipping is an added cost for your Etsy customer, so discounting it may encourage that impulse buy.
Coupons – Coupons can be a very versatile way of offering a discount. You can add a coupon into the shipped package to encourage repeat buying or a coupon in promotional material. The goal of this type of promotion is to maximize the use or redemption rate. Be aware, however, that coupons may simply encourage people to buy what they would have bought anyway. Also, if you use coupons, make sure you have enough inventory in order to not disappoint customers. Usually, the best use of coupons is for new products or to encourage the sales of existing products that are slowing down.
Gift with Purchase – This is not just for the Clinique counter, my friends. Sometimes known as a “premium promotion,” it is when the customer receives something in addition to the main purchase. A classic example; “Buy this t-shirt and get a free mirror with purchase.” It is always nice to add something to your package, even if you are not promoting a gift with purchase. HeyMichelle notes, "I would add that if you are doing a free gift w/ purchase, it is nice if there is a photo of it in one of your extra photos."
Group promotion – Band together with a group of artists, like our teams to promote your items together and give a discount. One example is the Etsy Fiber Arts Street team where all members agreed to provide at least a discount of 15% from November 1st – November 15th.

Daniellexo pointed out how to send a revised invoice:
If you want to send your sellers a "discount code" here's a good way to do it. Include these instructions: 'How to use the code:

First add an item(s) from my shop to your cart and start the check out process.
Enter the code in the 'notes to seller' and the email address where the revised invoice should be sent.
Complete the order but do NOT go to Paypal to pay.
You will receive a revised invoice, and a link to complete payment, via email reflecting the discount.'

Now if you log into paypal you will see an option to request money. Enter in your buyer's email address and the new total (subtract your discount here) and then send the request!

The Community Team would like to chime in here on the rules and guidelines about promoting your discount:

Do talk it up in the forums, on your blog/website.
Do change up your avatar with your sale's graphics.
Do post a notice in your shop announcement.
Do add SALE to your listing's title and to your tags.
Under the Dos & Don'ts > Selling > What can be sold on Etsy — "Don't create listings which are solely advertisements or promotions (no item for sale)." You can add text or graphics on top of your item listing, but you must be listing an item for sale!

Used carefully, a discount can help drive sales and acquire customers that will be valuable long-term. As always, make sure to weigh all the potential benefits with the costs. Small tests may be a way to gauge how this is working for you.

Beth is an admin at Etsy on the Business Operations Team. She is writing about pricing in a multi-part series, so ask her your questions in the comments below. Last week's topic was how to Prepare your Business for Wholesaling. Next week's topic is Tiered Pricing.

The Art of Pricing: Preparing for Wholesaling

2007-10-31T08:21:00Z

Beth is an admin at Etsy on the Business Operations Team. She is writing about pricing in a multi-part series, so ask her your questions in the comments below. This week's topic is how to prepare your business for wholesaling.

Wholesaling is yet another factor to consider as you price your work. Wholesaling is when a boutique or another reseller approaches you to purchase your items in bulk, usually expecting a discount for the large order. The expected discounts are between 30% and 60%, most often settling around 50%. These discounts are large, which is why it is so important to carefully consider how wholesaling could work for you before you price your items. As we discussed in Understanding Your Costs, it is critical to calculate your costs and related time and price your work accordingly. Remember that since you would selling multiple items with wholesaling, you may not need the same profit on each item for the economics to work out well for you.

Here are some numbers, for example:

Traditional pricing:
$20 – Total direct costs
$45 – Price (this includes the amount you would like to make for your time)
$25 – Total profit per item

Wholesaling:
$45 – Price
$22.50 – Price per item at wholesale discount of 50%
$20 – Total direct costs
$2.50 – Total profit per item

In this example, the seller needs to consider if $2.50 per item is enough profit to justify the sale. It may seem low, but it may just be worth the sale. Depending on the quantity purchased, this profit can add up to a tidy sum. For instance, if you are selling 10 items, this profit is $20.50 and at 50 items $102.50. This is a simple example that illustrates the need to walk through your costs, necessary profit and the expected discounts before pricing if you want to consider wholesaling.

Wholesaling can be a great way to drive more sales, but you need to take care in pricing your work accordingly. Since each item you sell wholesale is not available to sell for the full price in your store you need to balance the increased number of sales with your ability to stock and sell in your own store.

When working with wholesale buyers, price is only once consideration. You want to outline the other terms and conditions you need to be comfortable with for the deal to work. For instance, you may find that it is not worth wholesaling unless the purchaser buys more than a certain quantity. In the above example, the seller may decide that 10 items is the minimum number to make a wholesale order work for them.

Other terms you may want to consider include payment before shipment (received and cleared) and a sliding scale for discounts. An example might be: 10-20 items receive a 40% discount, 20+ items receive at 50% discount, etc. Consider what you will need to make yourself comfortable with the deal and protect yourself. Some put these terms in their Etsy shop descriptions. However, I suggest listing on your front page that wholesale orders are welcome, like Contrary, an Etsy admin, does in her store. Then you can email or convo your terms directly to the wholesaler once you have established contact.

Another way to protect yourself is to conduct your wholesale orders on Etsy. This can be done a couple of ways:
1) After you've agreed upon a deal with a wholesaler, create one custom listing specifically for all of the items that they agreed to purchase. Make sure to title this custom Etsy listing as "RESERVED" so that some other buyer doesn't purchase it by unwittingly.
2) Use existing or create multiple listings for the items to be purchased by the wholesale buyer (this can also help increase
your sales numbers and feedback).
Both ways create an online record or "virtual paper-trail" at Etsy which is important to protect yourself. Etsy Support staff will not be able to help you if you do the transaction off Etsy and something goes wrong.

Wholesaling can be a great way to increase your sales and your reputation. Done thoughtfully, wholesaling can help your business get to “the next level” and broaden your exposure, which is always good for future sales.

Check back in next week, when Beth will be discussing Theories in Discounting. Please leave Beth your questions and comments below!

The Art of Pricing: Price, You Get What You Pay For

2007-10-24T11:02:00Z

Beth is an admin at Etsy on the Business Operations Team. She is writing about pricing in a multi-part series, so ask her your questions in the comments below. This week's topic is pricing as an indicator of value.

The price you choose says something about what you make. Just as you carefully select your materials and skillfully craft your item, what you choose to charge for your item is just as important. Particularly with a one-of-a-kind item, like many of the items on Etsy, the price is the first indicator of value to a customer.

We see this phenomenon in many industries. Take the cosmetic wrinkle cream industry, for instance. Intellectually, we know that there is not a huge difference between the $10 cream and the $90 cream, but somehow many think that it is impossible to make a quality product at such a low price and opt for the high priced cream. The companies with the higher priced products aggressively pitch the quality and uniqueness of the special ingredients — in essence justifying the premium pricing. Throw in some fancy packaging, and you know what? It works. HeyMichelle and daniellexo commented, "If you're going to buy a gift for someone, you're not going to scrimp."

"That t-shirt you made that you price at a thousand dollars, and everybody thinks it must be the greatest t-shirt in the world? Oh, yeah!" Etsy Artist-in-Resident Avery from EmpireEmpire joked. But seriously, Avery pointed out that "pricing also has to do with your self respect. You should think about what your creativity is worth. In the long run it's better to not be pricing things just so that they sell only because people think they're cheap."

So take a hard look at your items and evaluate whether you think you can position your item as a "premium" product. Do you use great materials? Is your technique unique? Do you have an interesting story? There are lots of reasons that might justify a premium price position. Some believe that if you price your product too low right off the bat, you risk damaging your product's image. This may be an extreme example: however, it illustrates the importance of price as you position your product.

"Pricing too low over time and across sellers' shops also makes the general population say to themselves, 'Oh, I've seen that thing around and it's always really inexpensive,' remarks Sarah aka Lil'Snotty of Etsy Artist-in-Residence Ruffeo Hearts Lil' Snotty.

In the event items are not selling, most artists are quick to assume the price is too high. The truth is that the price might be too low. Experiment. See if raising the price will help sales. You never know: you might be selling yourself short.

Check back in next week, when Beth will be discussing preparation for wholesaling. Please leave Beth your questions and comments below!

The Art of Pricing: Staying Competitive

2007-10-17T11:14:00Z

Beth is an admin at Etsy on the Business Operations Team. She is writing about pricing in a multi-part series, so ask her your questions in the comments below.

Many artists set a price, stick to it and hope for the best. On Etsy, many people worry about the fine line between friendly competition and un-neighborly behavior in an often cooperative, community marketplace. However, there are approaches that can help make pricing easier and less stressful. So how do you approach your pricing strategy in this complicated context, you might ask. Read on and get ready to do some strategizing!

Cost-plus pricing — In my last article, “Consider Your Costs,” I discussed “cost based” or “cost plus” pricing. This is about getting an understanding of your total costs and applying a “wage factor” (how much you want or need to make on each item). This approach is important as a baseline, but is even more powerful when used with other pricing strategies discussed below.

Competition-based pricing — Simply stated, this is figuring out what your competitors are charging and adjusting your prices up or down accordingly. This research should be done both on and off Etsy to give you a full range of prices for similar items. Once you have this range, evaluate your product against the similar products you found. It is important to think about who you are competing with. Your competitors may not be someone who is making something very similar but someone who is targeting the same customer. For example, think about your product not only as a wooden puzzle, but as a gift for a 6-year old boy. This way you can compare your pricing more broadly. Also ask yourself the following questions:

Why should a customer buy my product instead of the other products out there?
What is the perceived value and benefits of my product? How much does my customer think my product is worth?
Is my product made of better materials?
Does my product have more intricate work or design elements?
What is my reputation in comparison to the other artists making similar items?
How differentiated is my product? What makes my product unique and special?
What is going to make me successful over the long term?

So what do you do with the answers to those questions? Most of the questions above are to help you create your product positioning and give your customer a reason to buy your product. Tell your customers what is distinctive about you and your product, which is something your competitors can’t reproduce.

It will not be unusual for your competitors to respond to your pricing move. If you price at the low end of the market, some competitors may respond by lowering their prices below yours. You can do a strategic brainstorm where you anticipate reactions from your competition and prepare accordingly.

But beware! This behavior can be a trap, a vicious cycle that will squeeze all of your profit in the blink of an eye. Focus on what your customers are doing, if you are making sales, and adjust accordingly. If you are not making sales or see a drastic reduction in sales, evaluate your competition's strategy as well as sales records. Consider these factors when making an additional pricing change. Leave cut rate pricing to Walmart.

Demand pricing — This concept is determining what customers are willing to pay for your product ($200 for a tiny bottle of perfume or $4 for a cup of coffee, for example) and setting the prices based on this demand. For example, one of our admin sellers, Reconstructionist, who designs handmade undergarments, realized if someone was in the market for an $18-$20 handmade garment, they probably would not be deterred if the price point went up to $35-$40. This seller increased her prices and did not see a drop in demand. Her customer base valued the style and uniqueness of her products. "I went and did price research in boutiques as well as on Etsy. I figure it's more important to make a profit than to sell a ton and have to make a ton."

Sometimes this is described as the price “the market will bear” — which means exercising your ability to charge more for a product that is seen as valuable or unique. This can be challenging and may take some experimentation on your part. Test an increase in price on one of your products and track the progress. I have heard many Etsy seller success stories using this tactic.

Another way to test demand is to have a good range of prices in your shop. One seller who does this well is Flyballbags. Not only does she have the opportunity to gain trust with customers on less expensive items, she has lots of information about pricing her products, which will help her price her new products in the future.

Avoid asking friends or people in the forums what is the “most they are willing to pay” for your specific item. People will perceive you are negotiating with them and the answers will inevitably be biased. You might ask, for instance, how much they expect to spend on a birthday gift for their nephew. Kfarrell, an Etsy admin seller, realized that when people are shopping for gifts for friends and family "$5 earrings? Naaahhh. Oh, but $15 earrings as a gift is good." The perceived value here comes into play, along with how people perceive themselves. In other words, people want to think of themselves as hitting that generosity sweet spot, between finding a good deal and being a spendthrift.

All of these approaches should be used when making a decision regarding pricing. One example of using a combination of approaches is from entrepreneur Rena Klingenberg, who outlines her formula for jewelry pricing on her website. She explains that her pricing strategy not only compensates her fairly, but more accurately reflects what the item is worth to the buyer.

In general, most entrepreneurs — not just artists and crafters — price too low. When this happens you run the risk of difficulty or resistance to increasing your prices. If you want to build traction and a reputation, one way to get around this is to announce the pricing as “Special pricing” or “Introductory Discounts” and let the customer know what the expected regular price is immediately. This will give you flexibility to test the market price and improve your pricing later.

Regardless of your approach, being systematic will give you confidence in your pricing decisions and the information to adjust as needed.

Check back in next week, when I'll be discussing price as indicator of value.

The Art of Pricing: Understanding Your Costs

2007-10-10T10:06:00Z

Beth is an admin at Etsy on the Business Operations Team. She is writing about pricing in a multi-part series, so ask her your questions in the comments below.

Figuring out how to price your items can feel like the most challenging part of selling. Don’t worry, it's normal to feel a little overwhelmed. Fancy business schools devote full semesters to this subject. And the one thing they teach? There is no magic pricing formula. Fortunately, pricing is more art than science, and Etsy is full of great artists.

If you are running your Etsy shop as a business and not just as a hobby, the first thing to do is to cover your costs. Direct costs include:

materials used to make the item
packaging
PayPal fees
Etsy fees

Even include that yarn that you dug out of the closet where it'd been stashed for years or those buttons your next door neighbor gave you; these are materials you could be using for something else, like design fees, the internet in your home office or rent utilities.

Indirect costs may include machinery: for instance, a large loom, or payment for access to a darkroom or a metal shop. These costs should be factored in as well.

Next, consider your time. Think about the time it takes to create the item and list it. On the creation side, don’t forget the time to design the item as well as the time to physically make it. Include time that might otherwise be considered “down time,” like working on the item while at your table at a craft fair, knitting on the bus on the way to work, or spinning during your favorite television show. In addition, remember it also takes time to take a great photo, to list your item, as well as to carefully pack and ship the item.

(Picture by gisarah used by permission)

On Etsy, sellers don't fold the cost of shipping into the price of the item; it's a separate but real cost you need to consider. When you list an item on Etsy, you are responsible for calculating accurate shipping amounts. You name the cost of shipping for your customer to pay. In determining the shipping prices, don't forget to think about insurance, tracking, or international shipping costs (for articles on shipping and packaging, click here).

Consider how much you want or need to make for your time. This is how much of a wage you're paying yourself. This is particularly important if are looking to quit your day job. You need to make a profit to make a living. You deserve to be paid for your efforts, your time and your creative talents.

Danielle, an Etsy Labs admin, had this to say from her education at art school and her experience being a fulltime Etsy seller (preciouspups):

"Here's one way a professor of mine taught us pricing. Figure out how many pieces you make a day. Figure out what salary you need to be paid/would like to be paid. Figure out how many pieces you can make in a year and then divide your desired salary by this and see what you come out with. Most people will find they are selling themselves way short."

Once you know your total costs and total time to make the item you can start to think about price. Many of you sellers have your own calculations, no doubt. Share them below in the comments. We want to hear what you think! Check back for the next segment on Competitive Pricing.