March 24, 2011

WHY UNDERSELLING SUCKS

http://www.ohmyhandmade.com/2011/contributors/underselling-why-discomfort-is-a-terrible-pricing-strategy/

This is a great article on why underselling is detrimental to you, your business and your peers (Part of this week's Etsy Success reading list).

This is something that I am constantly thinking about. I have already been told that I am underpricing my jewelry because it is so detailed and time intensive to make. I brushed off the observations... until I was approached about wholesaling (for which the formula usually works out to about 50% of your retail price).

Once this happened I realized that many of my items are sorely underpriced. And its' a lesson learned the hard way because now I may have to turn down some wholesale enquiries and stave off pursuing wholesale until I have used a good formula for pricing my jewelry & re-price my jewelry )which will have to be done gradually) if I intend to meet the goals for my business that I have set.

The formula for pricing is supposed to look like: Retail Price = (cost of supplies/materials/findings + appropriate hourly wage) x 2 or 2.5.

My formula right now is based on comparison, a modest hrly wage and a modest price for materials. Which is working out to enough to buy more materials to make more jewelry... NO BUENO!

This woman has bills to pay. And while I am only 8 months into the game and constantly improving my techniques, I also know that my jewelry is unique and totally worth the price that I should be selling it at.

But above all that the phenom of underselling oneself in business, particularly as a female, reflects alot on one's personal life and self concept. And underselling myself in business has caused me to reflect on underselling my self in life, relationships and other parts of my life.

Food for thought from the article:


"It’s true that paying special attention to underselling will mean that you will raise your rates to levels that are uncomfortable to you.
It’s also true that, until you become more comfortable with your life as an entrepreneur and money in general, you will be uncomfortable with your rates no matter how low they are. Selling what you love is hard.
Discomfort is not a good pricing strategy.
Kindness is.
Be kind to yourself, your growing business, your customers, and your colleagues by learning to respect your product & it’s price."

No comments:

Post a Comment

LinkWithin

Related Posts Plugin for WordPress, Blogger...

ShareThis