Pricing [long]

[Guest guest]

>

On Apr 17, 2006, at 4:50 PM, Kathy wrote:

> >i am just sick of seeing people just out to make a buck,

> >regardless of how they treat others.

> >

> >[Dave:] Right on, Justine! I think we need a new paradigm. In

> the past,

> >it’s been: what will the market bear? I think it should be:

> what’s the

> >least I can charge and still thrive?

> >

> [Kat:] I couldn't agree more...I have been trying for over a year

> to sell my aromatherapy products. I just haven't broken through

> the glass ceiling of doing a $100 show. I would have to sell

> almost everything to make that much. I sell the soap for $3 a bar

> and room sprays for $5 for 2 ounces. Everyone tells me to raise

> the prices but I don't want to feel like I'm ripping the folks off.

>

 

Hello,

 

At last, a topic on which I may be able to be of service to this

list. And if what I have to say doesn't fit for you, that's fine,

too. This turned out to be lo-o-o-ng, so I' going to paste my

conclusion here at the top so you can decide if you want to read

further:

 

Higher prices are not necessarily the equivalent of gouging or

" talking people for all you can get. " Higher prices can be seen as a

duty you owe to your best customers so that you can continue to

deliver fabulous products.

 

In another life I was a fiber artist. To be specific, I designed,

fabricated, and sold one-of-a-kind knit and highly embellished

garments, mostly for women. You can see a particularly fun example of

my work here -- http://www.mollygordon.com/pa/vwbug.html -- a " vest "

I made for my 1967 VW Beetle. I'm mentioning this so that you'll

understand where my adventures in pricing began.

 

I started selling my work at a local farmer's market. I could sell

the occasional hat there, but my heart was in exceptional pieces, and

people looking for that kind of work don't expect to find it at a

farmer's market. So, even when an appropriate customer came by, my

work was " invisible " to her.

 

My work was then accepted for a Studio Tour, a tour-plus-sale for

artists in my community. This tour attracted hundreds and hundreds of

buyers, and they expected to see fine work and pay for it. When my

pieces didn't sell the first day, I scurried around lowering the

prices. I made myself (and the other folks in the same studio) nuts

with all the price adjustments I made that weekend. Lesson One: If

the way you show your work doesn't instantly tell the customer what

about it they love, they'll never get close enough to even read the

price.

 

I went on to show at a local art gallery. I put a price of $135 on an

exquisite hand knit. The materials probably cost more than half of

that; they included at least 45 textures and tones ranging from

midnight blue to violet to silver-threaded black. It really was

amazing, if I do say so myself. The shawl sat there all through the

holiday (peak) buying season.

 

In early spring I pulled the shawl from the gallery and took it up to

a shop in Port Townsend, an old sea port that attracts lots of summer

visitors. The shop took the shawl and another piece, a very colorful

sweater, and I priced the pieces at $400 and $600, respectively. They

sold within two weeks TO THE SAME PERSON. Lesson: When the right

person sees your work in the right context, price is not the primary

element of their decision to buy.

 

I'm beginning to realize that I could turn this into the Great

American Novel, so I'm going to cut to the chase and tell you what I

have observed about price:

 

1. If we do not charge enough for our labor, we eventually get burned

out and/or resentful.

 

2. When we do not charge the price that our hearts fell the work is

worth, something in us feels " less than. " It's an energy leak, and it

can feel really crummy when you are leaking energy and trying to be a

good person by not " taking advantage " of your customers.

 

3. When we take the time and care to be really skillful and well

informed about our craft (and I know from what I read that many of

you do this), we are responsible not just for compensating ourselves

for direct labor but for earning enough money that we can continue to

learn, grown, and refine our expertise. It costs money to buy books

and magazines, to go to workshops. It takes time to research your raw

materials -- my God -- I have had only the slightest glimpse of what

is involved in sourcing essential oils, and if you do not consider

that time in your pricing, you run the risk of running yourself

ragged. Price your products so that your business " pays " for all

those hours learning and sourcing.

 

4. If we do not charge enough for our products, it can be easy for

customers to miss the true value. Price gets people's attention. You

may think that is cheesy. I don't have an opinion about that. I just

know that it's often the case.

 

5. What you believe about what you can charge (and get) is the

biggest single factor in whether or not customers will be happy to

pay your prices.

 

Let me say a bit about Number 5, because it is, in my experience,

absolutely true and yet very hard for artisans to understand. Here's

why it is true:

 

-- If a customer does not understand or care about your product,

neither a high price nor a low price will convince them to buy it.

 

-- If a customer does value and appreciate your product, they will

not be offended by a price that exceeds their budget. Disappointed,

yes, but offended? No. The person who is offended doesn't truly

understand what you are selling. Educate them (if they want to be

educated) or simply bless them and let them go.

 

-- There are two kinds of products: commodities and specialties. A

commodity is a product that gets the job done. Bulk laundry

detergent. Generic oatmeal. When we shop for commodities, price

matters. Why would I pay $3 a pound for essentially the same laundry

detergent I can get for $.50 a pound?

 

A specialty, is a product that offers a value above and beyond the

basic utility of the product. My husband is the more frugal one in

the family, and he does the grocery shopping so that we don't go

broke from my fascination with candles or exotic spices or whatever.

He is the one who first bought organic produce, and when we tasted

the difference, it became our first choice. It's often quite a bit

more expensive, but the value added by virtue of it being organic --

a value we can actually taste and feel in our bodies -- makes the

higher price well worth paying.

 

Back to laundry detergent. This is not an item I would usually

splurge on, however I discovered a natural, lavender scented,

biodegradable detergent that is just so delicious. It leaves the

faintest, clearest scent of lavender on the laundry, I just love it.

I usually combine it with another natural detergent that is somewhat

less expensive so that the overall cost is lower than if I only used

the lavender stuff. Do I resent paying more for the yummy stuff? NO!

I am proud to contribute to the success of a company that is creating

such a lovely product. I want them to succeed.

 

YOU GUYS ARE SELLING SPECIALTIES, at least those of you who are

crafting aromatherapy products.

 

-- Your customers want you to succeed and to thrive. Really. If

someone comes by your booth at a show and turns up their noses at

your prices, it doesn't mean you (or they) have done anything wrong.

It simply means they are not your customer. (My husband is not likely

to have chosen the lavender soap, for example. It isn't worth it to

him. Why should it be? It just isn't. But it is well worth it to me.)

 

I have seen so many artists and artisans break their hearts and

finances over pricing. I'd love it if I can save just one of you from

living smaller than you need to. Why do I care? Because when you

truly thrive, when you earn more than enough from your work, your

work can only get better and better and the energy you put into it

can only become clearer and more joyful. It's not about fleecing

people for the highest possible price, it's about paying attention to

how much energy (in every sense of the word) it takes to envision,

develop, manufacture, and sell products you LOVE and taking 100%

responsibility for replenishing and even increasing that energy

through your relationships with your customers.

 

Here are a few more notes on specialty products.

 

1 - They are marketing driven. Without marketing, how can we expect a

customer to recognize the value we offer? It's not marketing to

persuade, it's marketing to enlighten.

 

2 - Specialty product companies are built around their customers.

They have an exceptional commitment to providing value to the people

who want that value. You might say that they preach to the choir, and

the choir loves it. And happy choirs attract new singers.

3 - Specialty product companies set prices to reflect the VALUE TO

THE CUSTOMER, not the manufacturing cost. I assume that you don't

equate your aromatherapy products with mass-produced products. Why

would you price them like mass produced products? In addition to the

cost of manufacture (including a healthy wage for you), your earnings

should enable you to package your work beautifully, present it with

respect and joy, and give you plenty of time and space for

creativity, experimentation, and renewal. (That's called a vacation,

by the way, a word that we who are self-employed sometimes forget

entirely.)

 

4 - Superb product and service performance is a constant pursuit. If

your sales slip or you experience price resistance, it is a sign that

your customers need more education as to the value of your products

and/or that it is time for you to innovate or improve service.

 

5 - Specialty product companies must consistently look for how their

products can solve customer problems, how they can provide greater

service. How well I remember feeling resentful and victimized by

customer service concerns when I had my clothing business. How could

I possibly afford to give that kind of support? The answer was and

is, by charging enough that I can.

 

 

I know that there is more to setting (and getting) prices than this,

but I just had to jump in to say that higher prices are not

necessarily the equivalent of gouging or " talking people for all you

can get. " Higher prices can be seen as a duty you owe to your best

customers so that you can continue to deliver fabulous products.

 

Molly

 

[Whew. I guess I feel strongly about this.]

 

-----

Molly Gordon, MCC, 360-697-7022 FAX: 206-201-5020

Shaboom Inc., Life could be a dream...

 

Tell the world about your work. It needs to know.

Authentic Promotion is a 12-week program that works with your mind,

body, and soul to identify your authentic business and tell the world

about it without hype or hassle. Everybody wins.

http://www.authenticpromotion.com/

 

 

 

>

 

 

 

 

[Guest guest]

Molly,

 

Thanks so much for your post. I appreciate the time you took to write. I

look forward to taking more time to browse your site.

 

To the person (people) hearing from customers that they need to charge

more...what further encouragement could you ask for? I've found that pricing

my product has a great deal to do with my self-esteem. When I was trying to

sell soap for $1 an ounce, I had few takers. When I raised my price to $6

for a 3.7 oz. bar, I sold much, much more...and often multiples to the same

person. <shrug> Same for massage oil. Couldn't sell it at $10 for $8 oz. yet

now that it's $18 for 8 oz., it sells just fine. And I don't even have a

fully functioning website, nor do I do much promotion. Just my

experience.

 

HTH,

Lisa

 

 

 

[Guest guest]

All I have to say is Amen Molly, Amen! Tam

 

" Molly Gordon, MCC " <lists wrote: Higher prices are not

necessarily the equivalent of gouging or

" talking people for all you can get. " Higher prices can be seen as a

duty you owe to your best customers so that you can continue to

deliver fabulous products.

 

 

 

 

[Guest guest]

Lisa,

 

You are very welcome. I have gotten so much from this list, it was

wonderful to have a way to give back.

 

Molly

 

On Apr 18, 2006, at 7:25 AM, Lisa Nelson, Head Honcho of An Indigo

Rose wrote:

 

> Molly,

>

> Thanks so much for your post. I appreciate the time you took to

> write. I

> look forward to taking more time to browse your site.

>

> To the person (people) hearing from customers that they need to charge

> more...what further encouragement could you ask for? I've found

> that pricing

> my product has a great deal to do with my self-esteem. When I was

> trying to

> sell soap for $1 an ounce, I had few takers. When I raised my price

> to $6

> for a 3.7 oz. bar, I sold much, much more...and often multiples to

> the same

> person. <shrug> Same for massage oil. Couldn't sell it at $10 for

> $8 oz. yet

> now that it's $18 for 8 oz., it sells just fine. And I don't even

> have a

> fully functioning website, nor do I do much promotion. Just my

> experience.

>

> HTH,

> Lisa

[Guest guest]

When I was trying to

sell soap for $1 an ounce, I had few takers. When I raised my price to $6

for a 3.7 oz. bar, I sold much, much more...and often multiples to the same

person. <shrug>

 

[Dave:] Yup, go figure. When I was making my living as an artist, I

couldn’t sell much at $500. But when I tripled my prices, I started

selling.

 

_____

[Guest guest]

> I have seen so many artists and artisans break their hearts and

> finances over pricing. I'd love it if I can save just one of you from

> living smaller than you need to. Why do I care? Because when you

> truly thrive, when you earn more than enough from your work, your

> work can only get better and better and the energy you put into it

> can only become clearer and more joyful.

[Dave:] A wonderful post. I'll be studying it.

 

--

 

 

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