Monday, January 14, 2008

Perception is Everything

Etsy is a wonderful community of talented people creating and selling handcrafted (and some vintage) goodies.

As much as I love the variety, one thing that drives me bananas is the tendency for artists/crafters to under price themselves. Handmade products have MORE value to me than something cranked out in a nameless/faceless factory. And I believe that if we, as artists, do not value our own work, then how can we expect buyers to appreciate it and pay for it?

Take for example this lovely ring made by Beads in the Belfry (love that name!). It is made with sterling silver wire and a flower of Shianna Hill Tribe silver (not cheap), and a green Aventurine stone. These are all very good quality materials and, with the price of silver bounding towards $17 an ounce, they aren't cheap.

Nina is currently charging $19 for her ring. I have suggested to her that she raise her price. One reason is the materials - while it may not be a LOT of wire being used (and she may have bought her wire when the market was closer to $14 an ounce) she needs to remember that when someone buys all her rings - she will need to buy more silver at the current market value - which will inevitably be higher than when she first purchased.

Not only that, but while the "materials" include the silver and the stone, there are other costs that aren't so tangible. Business expenses need to be factored in as well - business cards, receipt books, tools purchased to create, time spent educating one's self, internet charges, advertising (time and money) Etsy and Paypal fees, and on and on and on. These things add up.

My second reason for suggestion she raise the price is perceived value. If I see something, let's say a pillow, that I like and someone is charging $20, I consider it a 'good' price but I will keep looking. In fact this actually happened to me at Christmas. I kept looking and found a $40 pillow and bought that instead. Why? Perceived value.

I'm sure the $20 pillows I found were just fine, but to me as a buyer, a person only charging $20 is either just starting out or not serious about their business.

For this ring, $19 is not enough for a highly perceived value. It should be at least $30 for a buyer to perceive it as valuable. Nothing about it has changed except perception.

I am not saying that people won't overcharge or price inappropriately for the materials / time. I have seen rip off prices too. But the biggest issue I see on Etsy is underpricing.

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