Pricing mistakes

Recently I've been caught out and called an idiot by the pricing of some of my products. I fell into an old trap, one that many of us make. I priced my products way too low. A lot of us do it, too many in fact. We don't take into consideration that our time and our knowledge is worth something and some of that acquired knowledge cost us a lot of money to begin with.

We may make our products, figure out how much it cost us to make it and then MAYBE we'll add a little on top of that to make a profit. Is that enough? No. How much time did it take you to MAKE it? An hour? Twenty minutes? What is your time worth? Are you working for free? As a good friend of mine said, are you in business or are you just playing around with an expensive hobby?

Hobbies are fun. They might make you a little money in the short term, but if you don't calculate in the price of your time, the cost of labels, the cost of the containers, the price of packaging even the time and gas it takes to get you to the post office, then you are driving yourself out of business.

Just recently I ran into a beader. She makes some lovely jewelry and I bought some. Would have been a fool not too, her earrings were four dollars and her necklace was $15.00. She had a complete gift set with beads, findings, wire and instructions that she had written out and printed out in a pretty plastic box... cost? $6.50. I told her she was an idiot (yes my famous diplomacy coming to the fore again). Her reply sent a shudder down my spine, it's the same one I've used and the same one I've heard from a lot of people "well... I bought this stuff a long time ago and as long as I get enough money to buy more, I'm happy."

She explained that she started this in the hospital when she didn't have anything better to do, hadn't planned on selling the stuff as a living. She was proud to have come up from a dollar a pair of earrings to four. I explained that she was going to find herself unable to continue for much longer. She makes nice jewelry, people are willing to pay for her stuff and she needs to raise her prices. She's worried that because she finds it easy to make them, that anyone can make it and therefore she's worried about losing the current business she has.

Sound familiar? I know it does to me. I can and do make jewelry. However I'm more than happy to spend money on someone else's creations if I like them. Besides, she makes prettier things than I do.

I get caught int the trap myself.

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