You only base your price off of similar items. So, there are other small businesses selling a similar item to yours, so you think you’ll beat the competition by pricing your item lower than theirs. Wrong! This isn’t always the case, and you aren’t considering all of your own costs before determining your item’s price. What’s more, if your item is priced much lower than your competitor’s, you could be sending the message that your item is of lower quality. When listing your item, make sure to include an item description which explains to a potential customer why they are paying more than or as much as similar items from other companies. Why is your piece unique? Do you use high-quality materials? In fact, if you’re using premium materials and your competitor isn’t, then you should definitely be pricing your items higher than your competitor.
You never raise or lower your prices. You should always remember to listen to your customer. Are they not buying your product? If it’s not the product itself, then maybe you’re receiving the message that your product is too expensive for your target audience and you need to experiment with lowering your prices. This could mean changing your materials to ensure that you can still make a profit while being able to lower your prices or you can offer a temporary “special sale” on specific items. If those items sell well, then you know you need to offer lower prices to sell your product. In contrast, you might be selling lots of product, but you haven’t raised your prices. Look at your competitors — have they raised their prices over time? If the demand is there, then try raising your prices to match the quality and popularity of your product.
You don’t value your time or skills. Oftentimes, a maker doesn’t value his or her time and skills enough to factor in enough of a labor cost in the total product price. Don’t forget to consider your level of expertise and training in your field. Also, you should be providing yourself with a livable wage, so that means factoring in a profit for yourself and not just the cost of your goods + overhead costs. You must remember that you are, in fact, an artist and your skills are worth paying for. Sometimes, pricing based on labor can be difficult because some projects take a very long time to complete. Consider options for cutting your production time and to produce product more efficiently. Or, really consider how much your time is worth. Even if you think your product has a steep price tag because of labor, remember that the labor is one of the major values in your product! Don’t assume what other people are willing to pay until you give it a try and give yourself the compensation you deserve.