Seller Handbook

Advice and inspiration for successfully running your Etsy shop

The Art of Pricing: Tiered Pricing

An Etsy business operations experts explains how tiered pricing can attract and convert buyers in your store. 

By Beth Ferreira Nov 14, 2007
Photo by Dashing Delights

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 then 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 the Blade hoops and Annelid necklace pictured below.

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

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 a $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 both 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. Explore this pricing strategy to see if it works for you.

Author

Beth Ferreira

Beth is a former Etsy Admin.

Comments

Continue reading in Pricing, taxes and finance