As a fellow WAHM, customer, and supporter of so many wonderful small businesses it saddens me when I see hard working small business owners undervaluing their work and charging pittance for items they have slaved lovingly away on, often in the wee hours of the night for hours on end. So many times I've been shocked at the measly prices handmade businesses are charging for products which quite obviously have had a lot of time, love and detail put into them. I have been so blunt as to tell a couple of these LOVELY ladies in the past that they really should think about charging more because I actually felt guilty for paying so few dollars for them, and I've been asked "Oh do you really think they are worth more?"... short answer, YES!
Take a step back for a minute and have a look at your business from a fresh perspective... I've outlined what I believe the 3 biggest problems are, "Undervaluing, Underselling,and Underestimating"
Undervaluing......
Firstly, undervaluing. Pricing your products is hard... I know. You have this idea in your head of what you'd like to charge and I bet 9 times out of 10 your asking price falls well short of this figure because you are scared that you're asking too much. Well it's time you start adopting a different way of thinking about pricing, and start to properly value your products and time!
Are you comparing your products to mass produced items in shops? Stop now. Just because you know you can pick up a simple summer dress in Big W for $20 doesn't mean that's what your product is worth. It's a mass produced item, those big companies would pay a tenth of what you do for fabrics, materials or put anywhere near as much time into the production of them.
You need to take into consideration what you are offering which is not only the end result, but a pattern perfected by you perhaps? a crafted product you've poured your heart and soul into to bring joy to someone else? your experience? your unique combinations of fabrics, materials, components? and last but not least, a product your customers cannot walk into Myer, Target, Big W etc.. and buy. That is without taking into account your administration time, yes the time we spend running our businesses, replying to emails, enquiries, this time we spend away from our families.... doesn't it all have to be worth it? Yes, we love what we do and the satisfaction of a happy customer is just as important as monetary rewards, but if you are undervaluing your work you are saying your work is only worth "this" much, when really, isn't it worth a lot more than that?
On a personal note, I am guilty of undervaluing one of my clutches... it is one of my most popular, and most expensive, but it costs me significantly more than any others to make and I'm not making the profit on them I should be. When pricing them I really thought they should be more, but was too scared to charge the price I really should have for fear of scaring customers off. Hindsight is a wonderful thing, but unfortunately once you put a price on something, it is perceived to be worth that amount and is hard to change it from there.
Underselling...
Secondly, underselling your competition and colleagues. If you do not correctly price your products, not only are you doing yourself a disservice, but you are doing your colleagues and competition a disservice as you are undervaluing comparable products across the market. Think about it this way, if your direct competition that also makes "xyz" in a similar quality and style undervalues their work, doesn't that put pressure on you to "meet the market" and their price? Do your customers not think "Oh it's lovely, but "xyz" sells the same sort of thing cheaper?" The businesses that fall victim to this sort of customer perception are usually the ones that have done the right thing by correctly valuing their products.
Underestimating...
Finally, underestimating your customers and how they value you and your products. As customers, we know that we can go to Target and pick up a pretty toddlers dress for $20, but we know by buying handmade we are getting something different, something that is not mass produced, something that our friends and quite often complete strangers will stop us in the street to compliment us on and ask us where we got it! Your customers cannot get lovingly handmade, unique items in the big shops. As an example, I saw a cute "Sooki Baby" jacket for Emily in Myer which was $50 and even though I adored it, instead I paid $65 for a gorgeous jacket from a small business Whimzi because it was different, couldn't be found in the shops and I just know when Emily gets to wear it she's going to look amazing and people will comment on it, they already have and it's just sitting on my kitchen table!
I've seen businesses on facebook ask their customers how much they would pay for this or that, and the honest ones will tell them truthfully, but lets face it, a lot will tell you less because they want to get it at a cheaper price. Will you miss out on a couple of sales if you properly value your work instead of making it an absolute steal? Most probably. But wouldn't you rather make one or 2 less products a week and earn the same amount you would have selling more at a lesser price? Ask your friends and family what they think something is worth, this is what I do now. The last time I made a new clutch I sent a pic to my sister Alicia and said "How much would you pay for this?" She asked me how much is cost me to make and I said to her that it doesn't matter what it cost me to make, what would YOU pay for it. She replied with a figure that was more than the figure I had in my head, so I found a happy medium and that is how I worked out the price for my new style.
Anyway I'm rambling now, just for something different... all I'm trying to do by bringing this up is hopefully make you take a step back for a minute and look at your pricing objectively. Next time you proudly put a picture of a new product up for your customer to see, make sure the price you have with it is a reflection of the hard work, time, and quality materials that went into it. There is a blog post over at "Ohmyhandmade" which can be found HERE, that has more great advice on this topic and inspired me to put my own opinion on it into words to share with the lovely businesses I chat to daily, many of which I know are undervaluing their beautiful work!
