themerriweather council blog - turning crafty tendencies into profits

August 19, 2019

How Expressing Your Product’s True Value Gives You The Ability to Charge Your Worth

You cannot sell me a cheap haircut, concert ticket or veterinary service:

There is a market for every product at every price point and price is NOT the determining factor in a lot of the non-essential purchases we make.

A MONOLOGUE

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In the past twenty four months, I’ve spent THOUSANDS of collective dollars on things I COULD HAVE spent hundreds on.

So why did I spend more than I had to?

It wasn’t for lack of availability or ignorance. I knew I could have easily seen the exact same BSB concert for $62 instead of $350. I know I could have gotten a haircut for $25 instead of $75 and I know I could have brought my dog to a less expensive, non-specialist vet.

So why didn’t I?

I value the experience

Well, let’s start at the top. I value the experience I have. When I spend money on non-essentials, I want to ENJOY myself. This isn’t a stroll down the toilet paper aisle at Target. I actually CARE that I have a good, fun, thorough, positive experience when I take the dog to the vet, go to a concert, or get a haircut.

I want assurance

I am happy to pay for assurance. I’m happy to pay extra for my concert ticket to get a better view. I’m happy to pay for the specialist vet who has an after-hours on-call doctor 24/7 available to clients. I am happy to pay for the experienced stylist to cut ALL the hairs on my head. (I mean, it’s MY HEAD!!!)

So just because I COULD pay less, doesn’t mean I want to.

Saving money doesn’t do me any good if I have a bad experience with paying less, or feel stressed out because something is missing, or don’t get to make eye contact with my favorite Backstreet Boy. (swoon)

We all have different values and tolerances

You might be reading this thinking, well I don’t give a hoo-ha about the Backstreet Boys and that IS stupid to spend that much on them. That’s because we have different values and different tolerances. Maybe you are a more resilient pet parent than I was and you can get by without that after hours line. Maybe you don’t care quite so much about your haircut… but I know there are things you do value and are willing to spend on.

I saw the value in these things and paid for them. The Backstreet Boys have done an excellent job making everything they do an easy yes for me. The vet I took Valentine to provided us with so much reliability, comfort, assurance and care that it felt like the right price! And the lady who cuts my hair is not only excellent with scissors, she’s super nice and fun to talk to and she has a flexible schedule. These entities have built up brands and businesses that support the prices they charge. They won me over and I am their ideal consumer now: I don’t balk at the price, I value the work, I never shut up about how great they are and I return time and time again… and the price is not the determining factor.

You cannot sell me a cheap haircut, concert ticket or veterinary service anymore. You can have customers like that, too. But you’re going to have to set the price and build up the infrastructure around it. If this sounds like something you want to do but have no clue where to start. I suggest starting here with this FREE pricing workshop Janet from Paper and Spark and I collaborated on to help you.

Pricing Workshop

We are covering some very hot topics that might interest you:

Why your pricing strategy is so important to the success of your shop
How your ability to pay yourself & re-invest in your biz hinges on your prices
The top 3 signs your prices need fixing ASAP
How the right prices allow you to work smarter, not harder
ANNND: The 3 key components you must have in your new successful pricing strategy

Create more customers that don’t bat an eyelash at your prices and will pay what you charge, over and over.

Come and see how.

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August 5, 2019

Thoughts on Value and Pricing in Handmade

thoughts on pricing + value in handmade | the merriweather council blog

I had a draft of this post in WordPress from November, and I decided it’s actually still really relevant because people have strong opinions about pricing handmade.

in 2015, I ran a special pricing offer on my embroidered initial necklaces as it was my 27th birthday, I had these pieces priced at $27. I NEVER run sales, so this was sort of a big deal for a few reasons.

Normally, the pieces are $38 and up. So this was a pretty steep discount. Some folks had me feeling bad about this, like was doing myself a disservice by lowering the price. I couldn’t disagree more.

Let me explain.

This post isn’t about the “treachery” of occasional sales at all. And that isn’t even really a concern for me. Occasional sales are useful, effective and fun. More importantly, they have their place in your bigger profit picture.

What originally prompted me to draft this post, was a thread I read in a Facebook group I am in. It was started about a week prior to Black Friday and the poster wanted to know who would be running a sale (the group is full of handmade artisans.)

Most folks replied and said things like “No, I can’t compete with Walmart pricing” or “I never have luck with sales” or “I don’t run sales because then I’ll lose money” or “People aren’t shopping online until Monday” …

My reactions were as follows:

Okay, fair enough – people generally do shop at malls or in stores on Black Friday.

I can see a person having a hard time running a sale, there are lots of ways to struggle with that.

For the record: Walmart is not a competitor of handmade goods. Your ideal customer isn’t going to compare your prices on handmade jewelry to the price of a necklace at Walmart and think “I’ll just buy the piece from Walmart.” If a person does that, they aren’t your person. There is no competition here.

Finally, then there were a few surprising comments:

“It’s unfair to the people who paid full price the rest of the year.”

My eyes about popped out of my head.

It’s unfair? Things go on sale all the time – I think most consumers realize this is a normal marketing practice for retail merchandise. Is it annoying to buy something and then three days later it’s on sale? Sure. But in the case of Black Friday, I think most consumers are aware there is a good possibility that the thing they buy on Tuesday might be cheaper on Friday, so really, that’s sort of a decision on the consumer’s end.

But it’s less about price and more about value and those aren’t the same.

From the consumer’s POV

It’s of value to me to buy the gift I need for my friend on the Tuesday before Black Friday so that I don’t have to go out shopping with all the madness on Black Friday. It’s a trade off. I’m going to pay a bit more, but I won’t have to be in the store on Black Friday nor will I have to elbow someone out of my way to get the last one.

If the store I’m shopping is online, maybe the value for me is that I’ll have it before I need it – let’s say I have a party to go to on the Tuesday before Black Friday, so I order the gift a week or two before that date to be sure I have it in time. Yes, I paid a bit more than the item might be on Black Friday, but I’ve got what I need, when I need it. That is valuable to me. I don’t consider this to be in any way “unfair” to me as a consumer. I see value in paying full price for any number of reasons – as I’ve stated above.

thoughts on value + pricing and why it’s okay for handmakers to run sales

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From the seller’s POV

When I price reduce an item, it’s because I want to sell it quickly or clear space in my studio or even my head. If I have things for more than a few months I begin to get antsy and want to clear them out. My prices are such that when I do price reduce them, I still make a profit. (This is important because obviously I don’t want to be essentially “paying” someone to buy something from me, because that’s very bad business.) The value to me as a seller is that I’ll make my money back and profit (less profit, but still, profit) and I’ll free up physical and mental space in my work-life. I cannot tell you how much I value that.

Another way to see value in reduced pricing as a seller is that I’ve now brought in funds to move forward. Money always comes and goes, that’s how it works. You need to spend some to make some, always! The money I make off sale items is more valuable to me than the items themselves at that point of sale. Now I can invest in a new project or tool. Follow me?

In the case of my necklaces being price reduced right now, I see immense value in selling a lot of these at a reduced price RIGHT NOW. I want to sell these NOW. Not in six months, not over time… NOW. It’s very valuable to me to clear out some supplies, make some money and move forward. I explained my reasons for retiring these pieces in this post a bit more fully if you are interested. I’m going to gain so much – in many forms, not just in the form of cash – from not making these pieces any more. So there is great value for me in selling them at a reduced price for a short period of time.

It’s not all about money. I’m going to gain space, and time to create new work. If you are an artist who sees no value in that, I’m sorry but I don’t understand.

Back to the consumer for a minute…

Does the consumer see a price reduction as a reduction of quality?

I don’t think so. The product is exactly the same as it was last week when it was full price. And people know that. This is the difference between pricing correctly to begin with and underpricing thinking that’s the best way to get things sold.

In handmade, sale pricing isn’t the problem, underpricing is.

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Under pricing communicates “cheap” or lesser quality. Sale pricing doesn’t.

Sellers shouldn’t be afraid of the occasional sale. (I don’t think you should run a sale every day of the year, but you can run a sale without fear of cheapening your entire brand, basically.) Sale pricing is temporary, incentive driven marketing: buy it now and save money — again, that’s VALUE to the consumer.

And you already know this but there is plenty of value as a consumer in paying MORE for something as well.

You’ll pay more for a wedding dress than you would for a bridesmaid dress. You’ll pay more for a souvenir at Disney World than you would pay to buy the same thing elsewhere. You know that. We associate objects with moments and memories, and we pay more for those because we value our experiences. How much did you pay for your wedding album? Or your baby’s first birthday outfit? Or your wedding rings? People are happy to pay more for things that represent the things they value most. Additionally, consider those little cheaper (or free!) things in your life that have a lot of value to you: chopsticks from the restaurant you went to on your first date with your husband, or the pair of socks your baby wore home from the hospital. Price and value are not one in the same.

Value and price are not one in the same

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When pricing your work, you should not simply run a formula and call it a day on whatever number pops out of the calculator. I like to think pricing as a whole picture sort of thing.

Is there room to grow in this price?

There should be, in most cases. If you are just starting out, leave some room to increase the price without it being totally insanely OVERpriced for what it is. If you get a major feature, you should increase the price. If your orders begin to come in at a pace you cannot keep up with, you should raise the price. If you do something to make your brand stronger – invest in graphics or a new site or better photographs, you should raise the price. Leave room for that.

Is there something additionally special about this item?

Is it cusomizable? It should cost more than if it weren’t. Is it made of 100% organic materials and packaged in eco friendly cardboard mailers? It should cost more than if it weren’t. Why? because people value those things as well. (Does your ideal customer value those things?)

Are you the only one making it?

Are you on a whole new level? Is yours the absolute best option available? That should be a factor.

Other considerations:

Is it limited quantity or exclusive in some way? Does it ship super fast? Has a celebrity worn it on TV? Did Justin Timberlake sneeze on it?

When pricing your work, think about the value this product has, and communicate that through your branding, copy and presentation.

Likewise, consider what you value for yourself and your lifestyle as well. Can you run a sale on this item and still make money? Are you happy to fill orders at this price, or miserable?

August 2019: This post was originally published April 9, 2015, but I am reshaping it because I feel it is relevant now, again, more than ever!

July 19, 2019

Etsy’s Free Shipping Update

In light of Etsy’s recent announcement regarding free shipping officially being a factor recognized in search ranking, I wanted to share some thoughts. (Summary: Offering free shipping is better than not offering it as far as search goes now.) You can read the full announcement here.

This has been a hot button issue for some time and I discussed it on the podcast in season four. *Please note that with this change, some of the info in that episode may now be outdated, outside of my personal opinion.

As a reminder, shipping price has long been a factor in search. Quick summary: Etsy was encouraging free shipping but, it was REASONABLE shipping that you wanted to have at the minimum. If everyone in your niche / search group was charging $4 shipping and you were charging $10, that was not as favorable because you looked like an outlier. So having a reasonable shipping rate was always A: good business and B: something Etsy regarded well.

That being said, I am surprised by the eruption of emotion and discussion about this announcement. Etsy has been on their free shipping push for some time and it is just one of many factors that impact search results… sellers regularly disregard the other pieces of the pie, but I’ll address this more later on in this post.

My Opinion on the Response to Etsy’s Free Shipping Update

Let’s begin by addressing the reasons why this is eliciting such a big response (my opinion, of course):

Search

For eons, like, literally since dinosaurs roamed the earth, Etsy sellers have married themselves to the idea that search is the be all, end all success metric. The thought process being: if I show well in search, I’ll make more sales. But as many of you hopefully know by now, it’s not that simple. Search is NOT the be all, end all. But because many people so believe that it is, ANY time something about search “changes” or is modified in any way, people panic.

The truth is that search – and being discovered in search – is ONE way of being found. ONE WAY. That’s all it is. It is a single way in which someone might find your shop. Search is ONE opportunity of Etsy.

There are plenty of other ways, too. People can find your listings through related items, features, favorites, and shop updates among others. Those are just Etsy specific ways. There are plenty of non Etsy specific ways too but let’s leave it there since this is about Etsy. (But most of you send some traffic to your Etsy shop and all the ways in which you do that are also ways for people to find you.)

Being Told What To Do

Many sellers feel that Etsy is telling them what to do. I get this one out of the box much more easily. In this instance people feel Etsy is “big brother”ing the operations of sellers. They aren’t because nothing is being decided for you but they have a strong influence that cannot be overlooked so it feels a bit like they are forcing your hand.

I think that’s okay. But as long as we know it’s just a feeling and not a hard fast fact that you HAVE to do anything, I think we’re good. Is it my number one favorite thing they’ve ever implemented? No. Do I think it’s a good opportunity for some sellers? Hell yes. Bottom line, this is NOT a “mandate” it is an opportunity.

It’s Not Actually Free

Even in their announcement, Etsy tells sellers that they should not foot the bill for this and to work the cost of shipping into your items. Some sellers find this to be a poor business practice that puts their transparency with buyers at risk. For me, I think most consumers are savvy enough to know that if shipping is “free” they are still paying for it somewhere along the way. It’s less of a breach of trust and more of a marketing strategy.

Etsy says that their research tells them people are more likely to purchase items that ship free. I think we can all agree that no one has ever complained about free shipping, the deterrent is not the shipping cost so much as the sneak attack.

They even cited (almost immediately in their announcement) the fact that many people will abandon carts because of surprises at check out. So it stands to reason that it’s not so much that people only want free shipping, it’s that they just want to know the cost, in full, upfront. Could Etsy find a way to show this total cost to buyers upfront? Likely, yes. Is it as cute and easy as “free shipping”? Likely, no.

Comparing to Amazon Prime

You’ve heard it said, I’m positive, that “people want Amazon Prime” experiences on Etsy etc etc. Let’s remember that Amazon Prime is a PAID subscription. Consumers PAY for the many benefits of Amazon prime, one of the most beloved benefits being that they know they will not pay ADDITIONAL shipping costs. It’s not FREE shipping. It’s shipping that’s included with your membership, you are not paying ADDITIONAL shipping fees on Prime. Another tick in the box to support the idea that people just want to KNOW upfront what they are or aren’t going to be paying.

Okay now let’s dive into the multiple other layers to this.

Including Shipping in the Cost of an Item

Including shipping in the cost of an item – what problems could arise?
Many sellers feel that in addition to being a bit “shady”, the act of including shipping costs in the item price means that if a customer purchases multiple items, they are paying more for shipping overall than necessary.

To be COMPLETELY honest, I’m okay with that. Here’s why:

Not so much that I’m okay with overcharging for shipping, but I am okay with sellers increasing their prices a little bit to accommodate free shipping because even if you are occasionally collecting more money than is needed for postage on a single order, you are ultimately offsetting some other cost.

Many sellers do not account for all of their costs properly or are under charging to begin with. So in some cases maybe you are offsetting the cost of wear and tear on your camera or phone, or in the case of doing craft fairs: the cost of wear and tear on your tent. Which leads me to my next point: I think your prices should be consistent across all selling venues and if that means you are “charging shipping” to craft fair customers, flip the script: you are off setting other costs.

Shipping to the U.S. from Abroad

Etsy says that this change impacts sellers who ship TO the USA. So if your shop is in France but you offer shipping to America, this impacts you. To be honest, I’m unsure how international sellers can best navigate this. I need more time to percolate on it. It does seem that Etsy has implied there is a tool or some other forthcoming feature that will better address this not-so-unique situation.

Possible Other Consequences of Free Shipping

Less Eco-Friendly Packaging

Again, since Etsy’s influence cannot be overstated, we should consider that many sellers will now be inclined to offer free shipping and that will precipitate them finding cheaper packaging materials. This will inevitably mean more plastic consumption and importing materials from abroad. Global warming issues to the max. It’s hard to imagine sellers offering free shipping, not raising their prices to account for it and also seeking out eco-friendly packaging options that usually cost more all at the same time. So while it’s not a front runner concern, it did cross my mind.

Using Free Shipping as a Promotion

Free shipping has long been an excellent promotion for occasional use. Now that it will become so standard, it’s likely more discounting will occur in the absence of this very-effective promotional option. (If you offer free shipping all the time, what’s your next best occasional promo? Probably a discount of some kind.) It’s also likely that sellers who have their own sites will find that the free shipping they offered there is no longer incentive enough and have to adjust or lose out on having an incentive for people to buy on their site.

What Happens with Returns/ Exchanges?

What happens in the case of seller offer free shipping, buyer wants or needs to exchange the item, and has to pay to ship it back to the seller… and then, depending on the situation the seller has to ship it back to them? Who is responsible for the shipping costs? Perhaps it will depend on the situation – was the seller at fault? Did the buyer purchase the wrong thing? Those will be important questions as they always are in the case of returns. But when you advertise free shipping, where does it end? I would encourage sellers to think on this and proactively express your expectations and process for this situation in their policies. (I was unable to find any information from Etsy regarding this being a sanctioned practice or not.)

Are Etsy buyers – or people who are making a purchase on Etsy – really the traditional internet buyer?

If the marketplace offers unique goods, that cannot be found elsewhere, isn’t it likely people would be less inclined to trifle over shipping costs? I think so. But I do understand their desire to make it so people are more likely to buy. Period.

I think many of the people who love “free shipping” elsewhere are people who are also perfectly okay with paying reasonable shipping charges on Etsy.

Some key questions that may arise have been answered by Etsy here.

A Question I Have:

If the research is so clear that free shipping is what people want and even maybe EXPECT – why is there a threshold of $35? Is this to include more sellers in the mix? To be more widely appealing? I hope so because otherwise, it doesn’t really settle out too well.

Things to Keep in Mind

Search is Made Up of a Combination of Factors

Just because an item ships for free does not mean it is going to shoot to the first page of search results every time, no matter what. The item itself still has to be relevant to the shopper’s query for what it IS.

An item on page 10/250 of a search is likely JUST as relevant as the items on page one. There is only so much space per page, and the listings have to be organized somehow. Personally I think anyone showing up between pages 1-20 of a 250 page search are doing incredibly well relevancy wise.

Search is ONE Way to Appeal to Etsy’s System

The smartest sellers will appeal to ALL the opportunities of Etsy, not just search.

For those of you in the Etsy Training Course, the course will be updated shortly to reflect this change and advise on it. For those of you who aren’t, consider joining us to learn about ALL the opportunities of Etsy!

If you have thoughts on this, I would love to hear them!