Pricing Handmade: How to Overcome Your Fears
You can watch the video, or read the post below.
This is a follow up from the “Why you need to raise your prices” video I did not long ago. When I released it, I started getting lots of emails and comments from you. Mostly great news: “you’ve convinced me, I need to raise my prices BUT…”
“BUT” means I didn’t really convince you. It’s like trying to convince your friend to come with you to the gym and she’s like “you’re right Deb, you’ve convinced me. I think I need to come to the gym with you but I can’t at the moment because XYZ”. This BUT part troubled me. So many of you said things like this and I was reading those comments and emails again and thinking: “What is REALLY holding them back? What do we need to address here?”
FEARS. That’s what it boiled down to: a bunch of (understandable sure but also nonsensical) fears. That’s why I want to address those today so that you can overcome them and feel more comfortable and confident about charging what your products are worth. I’ve grouped those fears into buckets (bucket of fears doesn’t sound very inviting, right?).
I will make fewer sales
Do you relate to any of those fears?
- Raising prices and hearing crickets.
- Losing sales.
- Losing repeat or old customers.
Those are variations of the same fear: I am afraid if I raise my prices I will make fewer sales than I am now (and if you’re already not making sales, that fear is even stronger: I am not selling at $20 how do you want me to sell at $60 Deb?)
Totally understandable fear, but you HAVE TO reframe it. Let’s look at 3 possible scenarios here:
- It is possible that by increasing your price you will actually make more sales because of what’s known as perceived value when something priced higher will be perceived as of more quality and value.
- It is also possible, yes, that you will make fewer sales. Even if you were to make fewer sales, each sale is worth more, so you are still making money (probably more than now) AND you also have more time to spend on growing your business because you spend less time creating orders and running that hamster wheel.
- You make no sales anymore. Maybe your old customers think the price is too high now. But then what? You have to realize that you simply can’t afford those customers. Because 6 months or a year from now, if you are making sales without making a decent profit, you will burn out and your business finances are simply not going to stack up and you are definitely going to run into a wall. So get rid of those customers now – they are not serving your business, in fact, they are draining it. Whoever is still able to pay the new price will, and you can move onto finding the RIGHT customers for your shop.
“Can I please make a living by giving away my products?”
Do you have any of those fears?
- I don’t want my customers to feel like they are paying too much for what they’re getting.
- I don’t want to ask for too much money from people, it feels uncomfortable.
These 2 fears are both a variation of “I am a good human and I want everyone to be happy so can I please make a living by giving away my products?”
I am very sorry, you can’t. If you recognize yourself in any of these two statements, then you need to ask yourself those questions:
Are you getting supplies and materials and more generally your costs as low as possible? Is your work, objectively, of great quality? If YOU saw this in a cute little retail shop in the center of town, would you think “what the hell is this?” or “aw look how nice that is?” Would you look at it and think “this kinda looks like what my son made me for Mother’s day at kindergarten?” or “such a piece of beautiful craftsmanship”?
If you think “meh, not that great” – then take the time to learn new techniques and skills within your craft to improve the end-product. There’s no shame in that – actually the opposite, it’s important to keep learning and improving your products. But most likely you’d think it BELONGS in that shop – because it does. I know that all of you are talented makers and designers and that your work is worth what you’re not charging for it (YET).
We’ve uncovered that it’s not about ripping people off, it’s about confidence / and we are about to touch on this. Then what you’re really saying is: I am not worth it. And yes you are. Yes, it is scary to put yourself out there and to put a price tag on something that brings you joy. It’s like asking people to pay you for something you actually like doing. WHAT? That’s not how life works. It can be, and if you’re letting this confidence issue get in your own way you are your most dangerous obstacle. You have to let go, you have to see this thing as something fun and turn all that nervousness into excitement. YOU. ARE. WORTH. IT.
I’m not famous/ready yet
Do any of these fears ring a bell?
- I am not known/famous.
- I am just getting started and want to get a few sales under my belt.
- I’ll raise my prices when I start seeing more sales rolling through.
At first glance, kinda makes sense, but it really doesn’t. Let’s take CHANEL or any luxury brand as an example. Do you think they price their designs at $20, hit mass market and go “hey, wow this is selling nicely! Let’s make it $2000 now, shall we?” NO. They go in positioning themselves as luxurious, high-end brands. If you need to price higher than you are now to make a profit and make money, then start charging more now. Start building that brand image now. It’s much easier this way than the other way around (back to the fear of losing customers who are used to paying less). Pricing your products lower then they should be doesn’t help you as it doesn’t leave you earning money and when you finally raise your prices, you’ll have to look for different type of customers anyway.
I wouldn’t pay that price myself
Do you fear any of these?
- People won’t pay the price that handmade products should really be priced at.
- I wouldn’t pay that price myself.
- I’ve asked people around me and they all seemed to say they wouldn’t pay a higher price.
- Absolutely no way people would purchase at that higher price, all my competitors charge much much less on Etsy.
Something very important to remember here: you are not necessarily your ideal customers. Your friends and family, although they may be an amazing support system – most likely aren’t either. And YES, the right people WILL pay the RIGHT price for a genuine handcrafted product.
The underlying problem here is this: You are selling and marketing to the wrong people. If I take a $2000 Chanel dress and try selling it in the clothes department of Kmart – how do you think that’s going to go? People are going to be browsing: $10 dress, $20 shirt, oh cute $5 singlet, and WAIT WHAT a $2000 dress? No one will buy that dress. It doesn’t mean it’s not worth the price, it means there’s no “match” between Kmart target market and Chanel target market. The same dress sells very well in a boutique on Les Champs Elysees in Paris. That’s why if your price needs to be $300 and everyone around you on Etsy is selling at $15 (probably because they themselves are undercharging) then you might need to consider selling elsewhere, like on your website. Or to retail stores, or etc.
I hope I’ve helped you clear some fears and raise your prices. Let me know what fears are holding you back below.
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