Pricing Artisan Jewelry: Part 2
inMarch 14, 2008 - 10:53am
As we stated in Pricing Artisan Jewelry: Part 1, “we have put together a short list of do’s and don’ts for you to consider when pricing your items to sell in your online shop.” In Part 2 we focus on knowing the competition and pricing strategies.
Do know the competition. When first staring out you will want to check out the work of other jewelry artisans to see what they are selling, and at what price. This will give you a better understanding of the supply and demand for jewelry artisan items similar to yours, and will allow you to gauge where you stack up against the competition in terms of quality and artisanship. The information you gather enables you to determine where your items fit in the jewelry artisan community, and it provide the basis – the figures – for developing a pricing structure relevant to your product line.
Do consider using price points. Offer items at various price points to reach more customers and increase sales. Artisans who position themselves to satisfy a variety of customer tastes and budgets by offering items at different price points – high end, low end and mid-range, reach more customers and thus, increase the likelihood of making more sales. Keep in mind the customer must be able to perceive a value difference between each price range.
Don’t sell cheap, sell smart. Some artisans prefer to price their items as cheaply as possible – opting for high volume sales and low profit margins. This is usually not the best pricing strategy jewelry artisans. Volume sales require a significant amount of on hand inventory, which is extremely difficult to maintain in the long term when you are the only source of production. In an effort to keep pace and maintain adequate inventory levels the quality of your work may suffer, your business may suffer, and leave you zapped of your creative energy – something you cannot afford.
Selling cheap may also work against you in the eyes of the buyer, because some customers perceive value by the price they pay. They may not even take the time to look at your work, even if the materials are of good quality; they will reason, for ‘that’ price it must be in some way inferior. Most customers shopping for jewelry on the Internet want something ‘special’, not something they can pick up at the local department or dollar store.
Don’t ‘target’ the competition. Even if you have the ability to work for less, undercutting your competitors by selling comparable items for significantly lower prices, may invite retaliation. ‘Let the price wars begin’ – they slash their prices, you slash yours, and on and on. This benefits no one in the long run, and creates a less than friendly atmosphere in your chosen selling community. Lower than average prices may also cheapen the look of the community, attracting fewer mid-range and high-end buyers, and less profits for everyone.
Do build flexibility into your pricing structure. The time to think about discounts is when you initially price your items. By factoring in a percentage to be used specifically for discounts, you are putting yourself in a position to accept wholesale orders, or to offer special pricing to a valued customer, without adversely affecting your bottom line. For example, if a repeat customer requests a single item discount or another type of favorable allowance, you will be in a position to grant such a courtesy without cutting into your profits. These arrangements can help to cement the buyer/seller relationship, and encourage future sales.