Monday, November 2, 2009

Finding your worth

I've had to raise my wunderlust prices again! I'm also slowly realizing that it's impossible for me to continue offering my products at wholesale, unless I hike my prices even higher or cut my production time in half.

Working on Nice Package for the past month has been an eyeopener for me - Ez and I have quickly adapted to what we refer to as "check the document", recently nicknamed "spready". One thing that I can thank corporate America for is my love/hate relationship with spreadsheets (Excel or in our case google docs spreadsheet). Spready is a spreadsheet that I created, it tracks all of our ideas (good and bad) and lets us know whether we can go ahead and produce the item at a decent return. It tracks things like our total cost of investment (supplies + labor) and by figuring out the cost of producing one unit we're able to play with different pricing situations to figure out the balance between making money and what we think our market can bear. Don't forget to consider Paypal, Etsy fees and other marketing fees when figuring out your markup %. I think lots of creatives out there (us included) are so busy dreaming up the next big thing or have this how-can-we-make-this-even-cuter-so-our-customers-go-ape-shit mentality, but then fall short in analyzing the actual time that goes into cute-output. Spready is sort of that annoying finance guy in your office that says "NO, absolutely not!". BS (Before Spready) we've honestly had to abort production on several kick-ass ideas that were almost completed after realizing that we'd have to charge an obscene amount of money in order to cover our supplies cost and that's not even including labor.

I'm proud to say that nothing gets produced under our brand unless it's gone through mr. spreads. We certainly learned this the hard way (AND still leaning!). I hope more and more artists/creatives start taking the time to analyze their production process and pricing scheme. Nothing makes me sadder than seeing under-priced items on Etsy and other online markets, not only is it detrimental to the artist/designer but also undervalues the perception of indie products as a whole.

I found this great primer Pricing your Handmade Goods - hope you find it useful as well!

Related Lifeflix posts:
How to: Price your Craft
How to: Retail Pricing


daisy janie said...

Great post! I've got spreadsheets out the wazoo, and it's always been immensely helpful. It dampens my spirits sometimes to realize some ideas just can't happen, but better that than the harsh reality of losing money and my sanity!! Margins baby!!!

tricia mckellar said...

Good for you Marichelle! :)

My said...

The eni oken calculator has been a great tool Its suppposed to be for jewelry but it works well for other products as well. You get to see variables on pricing. It was on of the best $5 I spent when getting starting.

When the economy changed I know that it was difficult for a lot women to continue to offer wholesale just because of the pricing markup that had to happen. Many people have either stopped offering wholesale and focused more on direct consumer relationships and marketing. Or they have chose to offer less than 50% markup and instead do something like 30% for wholesale accounts.

Good luck with whatever you decide.

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Clementine said...

Oh, Marichelle, I feel like you were looking *directly at me* when you wrote this post! ;)

Please, please, I need a Marichelle Spready Bootcamp or something. I need a spreadsheet trainer to kick my ass. Argh!

Amanda Nicole said...

Yes, you've definitely got to charge what you're worth. As a freelancer, I know all about having to make those ends meet!

clare Carter said...

Great post.I find it so hard to price my work.If I priced the actual time spent working on something it would be very expensive.I have been told by some that my prices are too high and others that they are too low.The hardest thing I find is people comparing my handcrafted one off pieces to stuff made in china.Its infuriating and when you then have people selling handmade things really cheaply it belittles those needing to earn a living from their craft.I think if I had a 'spready' I would sob because it would scream NO at me!!