Workshop – Thriver Circle from Jessica Van Den on Vimeo.
The password is: ThriveAlways
This workshop is all about pricing.
I suggest a 2-step process to pricing. First, pricing with the ‘Head’ – which means crunching the numbers to see what you need to be charging in order to cover all your costs and make at least some profit. Then, pricing with the ‘Heart’ – using research, emotion and brand positioning to arrive at a final number.
I know that pricing is one of the hardest parts of running a handmade business – and it’s also something we need to revisit on a regular basis as our businesses and our skill level grows.
Links:
Workshop Slides: Pricing with the Head + Heart
Workshop Audio: Listen/Download
Task: Follow this process with at least 3 of your pieces, and share your results below. Do the prices you come up with vary widely from what you were already charging?
(This workshop was first published – Apr 2015)
Pricing what a gnarly subject. Jess this could not have come at a better time for me. I am currently doing a local market and feel the pinch to be super cheap because that is what people look for in a market apparently. I was approached by a shop there who showed interest in some of my work. This time I am not going to work for nothing. I AM going to do the Maths and charge accordingly and if that is not OK for them I won’t stock their shop.
I have been guilty of selling super cheap to another shop because I love the shop and wanted to be part of it but my WS price was completely under.
Pricing always makes me feel really uncomfortable as it brings up so many emtions around value – that percieved by others and your own , a very complex web we weave.
Whoever thinks that turning a profit from doing something close to your heart is a walk in the park is rather misguided. It’s a constant dance, a push me pull you and weighing up……. at the beginning anyway. But still so worth it 🙂
Robyn – it is hard – exactly because once you’ve done the maths, it totally becomes a value judgement. And we, as a rule, tend to under-value ourselves and our work (because to us, it’s easy, or simple to do!). I love your analogy of a dance – and I think it’s one you get better at over time, but never finish.
This was an excellent workshop! Really seriously excellent. I’ve done a lot of reading about how to set your costs and none of them have ever mentioned “time not making”. It occurred to me a while ago that my time photographing and listing and marketing was not covered in my Cost Price, so for the last month, I have been using an App on my phone (it’s called Timesheet) to keep track of every little bit of it. If I hop on the computer to list something, I start the app. If I’m taking photos, I start the app. If I’m setting up at a local market, I start the app. At the end of 3 months, I’m going to average out how much time is spent on “not making” per item that I have sold, and make darn sure that it is reflected in my pricing. And thanks also for clearing up that profit is not your wage. I have been guilty of that in the past. I’m going to make sure that I keep them separate from now on.
This workshop alone is well worth the price of my membership.
Thank you, Natalie! And using a timekeeping app like that is a GREAT idea!
I really enjoyed this video I struggled so much just starting out with pricing and I still do because some of my original art is really time and other are larger I feel bad charging a good amount for time so sometimes I undercut on the smaller items but now I’ll work on setting up my formulas and working from my heart. I actually just did a market where I had just raised my prices and my pieces still sold which I was nervous about and I made more with fewer items which was a good feeling.
I think I am still a little confused on the wage vs profit portion. So if I sell an item that amount I get from the sale some of that should be “tagged” as wage and the rest profit?
Thanks
Lovely Jess, thank you so much for this awesome video. I had a lot of AHA! moments.
One thing I’m stuck with when it comes to pricing, is calculating based on my profession and how much I think I’m worth charging hourly.
I’ve been a graphic designer for the past 6 years and while I’m currently working as a part time freelancer, I am working on creating my online stationery and paper goods business.
I normally charge my clients $80/h these days as I’m now considered an intermediate graphic designer. But, if I were to consider that cost when it comes to creating my products, it just gets ridiculously high and that’s when my heart comes in and tells me this formula doesn’t work in my case.
Even if I drop down my hourly rate to say $20 which is what a graphic designer just out of uni would normally charge, and say for example a print that I designed took me 3 hours to make, that’s $60, plus say $17 for cost of materials for an A3 gold foiled print, that’s $77, then I’m suppose to multiply it by 2, that’s $154 for an A3 gold foiled print! That seems very high in my opinion, even if my ideal customer is in the higher end of the spectrum.
So my question is, in my case, should I be calculating more in terms of how much time I would be spending getting each print printed and packaged before sending off to customer versus how many hours it originally took me to design the piece? Cause if I did it this way instead, say it takes me 30 mins to print, package and send, that’s $10 for my time, plus $17 cost of materials, multiply by 2 = $54 which to me seems a lot more reasonable for an A3 print.
How does this formula work in terms of calculating the hourly rate, when you’re someone like me who designs something that takes a few hours at first to make, but then to re-print and package etc, it takes fraction of the time thereafter?
Your advice would be greatly appreciated!
Thanks 🙂
Simeen
Hi Simeen, that is an excellent question. I think you definitely don’t want to charge for prints based on the initial design time, because, as you said, that would make them way too expensive. I actually am in a similar boat (as is everyone who designs reproducible products) because I don’t get ‘paid’ per se for the work I do to design and create a new product. I just invest that time, and then list the product in my store – and, I NEVER sell the prototype, so I don’t actually get that time back directly financially. The cost I charge is based on the time it takes me to make the product I sell.
So, for you, that time is actually really short, because you’re just printing and packaging. So, that would be my recommendation. See your design time as an investment in the growth of your business.
Thank you for your reply and explanation. Makes sense now 🙂