Dear Miss Mignonette - The Price is Right

Miss Mignonette - A Savvy Coquette

Dear Miss Mignonette:

I've been on Etsy for 6 months now, and I've barely had any sales. I think that my work is really cute and well-made, and I don't understand why all of my sales have been to family members and friends. I've looked at other Etsy sellers who have tons of sales, and my work is much cheaper.  What gives?

Dear Miss Mignonette:

Last week I had a booth at my first craft fair. It was really frustrating - I sat all day and hardly had any sales! I did have tons of people coming over to my booth and talking to me, but hardly anyone bought!  I took a break and walked around and my prices were much lower than other sellers, and they had people lining up to buy!  What am I doing wrong?

It happens every time - I go to a craft fair and an amazing booth catches my eye.  Here is an artist who has it all: an incredible product, a catchy name, and a booth display that will knock your socks off. I want one of everything - and the super-low prices mean that I can afford it. Yet the prices also put me off, and more often than not I leave empty-handed. You've probably done this too, or had it happen to you.

 I know it sounds counterintuitive, but trust me: your felt mustache on a stick/ narwhal wallet/ Gocco print doesn't cost enough. It is so cheap that consumers are suspicious of it on a subconscious level.

As a former buyer and a craft fair veteran, I've met my share of crafters who are clueless about the worth of their work, or just don't understand its value. A few months ago a lovely, super-talented crafter crossed my path and had the unfortunate luck to tell me that she was charging around $3 an hour for work that, if it were sold at a specialty store, would retail for $200, and even worse, her sales were stagnant. I gave her such an earful that she was too terrified not to take my advice, and now her business is booming.  I won't chalk it all up to re-pricing her work, but once she made it clear that she was taking her business seriously on all levels, the buying public had no choice but to take notice and give her the recognition she deserves.

In retail there is a little something called 'perceived value'; we know that when we walk into a truly amazing store, we are paying for ambiance and  overhead, and that's before we even get to the product,  while stepping into a no-frills discount store means that we don't expect much, therefore we don't expect the products to cost much, or last long, even though they might be high-quality. The same goes for your work.

Let's compare two tee shirts - one from Target, the other from a boutique for a considerably higher price. Both are cute and simple, but  you wouldn't think twice about wearing the less expensive one until you trashed it, while the pricey one would be hand-washed and treasured, right? Think of your work the same way.  The cheaper you treat it, the cheaper it will be treated by the customer.

Let me explain, because I can feel the objections forming:  "I want to sell!  I don't care how much it sells for, I just want it out of my house!  I just want people to have it!  I'm not in it for the money! " Be honest with yourself:  You wouldn't be selling your work if you didn't want to make some money from it. Otherwise, you would give it away and you wouldn't even be reading this. Embrace the fact that you want good money for your art, and you'll be okay with pricing correctly.

The Nitty-Gritty of Pricing

Let's say that you make wire-wrapped jewelry with semi-precious stones, in the shape of signs of the zodiac , and you're getting your materials from a local supplier instead of ordering them online, and you are spending at least three hours per necklace, and by the end of the day your feet hurt from walking all over town to get your materials and you are up to your eyeballs in Virgoes and Capricorns, all in the name of art. That's great.  The bummer is that now you are going to log on to Etsy and try to sell  all of your sterling silver, carpal tunnel-causing, amazingly creative and well-made work for $25. 

How long did it take you to find the materials to make it, and how much did they cost? And then once you found them, how many hours did it take you to actually make the item? And now you're photographing it, writing clever descriptions, listing it on Etsy, and then if it doesn't sell immediately you're going to take it to sell at a craft fair and merchandise it and then sit all day and try to sell it to customers? For $25?

Yikes!

A Numbers Game

If pricing is driving you up a wall, a little time spent with an Excel sheet (or just some lined paper divided into columns) will work wonders in helping you get a clear picture of what your work should cost.

For each new item, open a new sheet in Excel (or find clean lined paper) and create a column marked "cost" , listing all the materials in the item, next to their costs.

1) Materials

Take into account the materials that you had to purchase to make just that item (silver wire, clasp, beads, etc).

Wire-Wrapped Jewelry

COST

Silver Wire     $10

Beads             $4

Silver Clasp   $3

Materials  =    $17

2) Skilled Labor, i.e. how much time did it take to make?

This is a two-part question.

A) Assuming that you work steadily from start to finish of a piece, with no breaks to check your email, walk the dog, log onto perez hilton, or suddenly bake a loaf of bread, how many hours did it take you? 

B) What is the minimum that you are willing to pay yourself?

Picture this: Imagine that you are offered a job selling ice cream.  You have to stand for at least 6 hours a day, ring people up, wear gross latex gloves, and not eat all of your product, and at the end of each day you've only earned $30 before taxes.  You'd quit that job pretty quickly, right? of course!

So make sure that, when you price your items, you aren't paying yourself even less than you could earn by slinging ice cream.

If you are having what i like to call 'crafter's guilt' about paying yourself a fair wage, i find that consulting your state's guidelines for minimum wage are a good guideline.  In California it's $8, but crafting is skilled labor, so if you want to raise your wage,  I say go for it!

Now multiply your answer from A by your answer from B. Awesome!

Time spent = 3 hours

CA Minimum wage = $8

Labor costs = 3x8=$24

3) Now let's think about added costs. 

Are you shipping that item, and do you offer free shipping in your Etsy store?

How long does it take you to list the item?

These little costs add up, but they should be taken into account. For the sake of not twisting your brain into a pretzel, let's say that you do offer free shipping, and that it takes you 30 minutes to photograph, upload, write about, and list an item. If shipping is actually $4.5, you need to account for that in the price of the item, and that 30 minutes that it took to list the item needs to be calculated with the formula that you used in step 2. 

Shipping = $4.5

Listing =  1/2 hr x $9 = $4.5

Added costs= $9

So let's see: For one necklace, materials ($17) + Labor ($24) + Added costs ($9.5) means that your necklace actually costs $50 to make!

Now that you've got a good idea of how much you actually spent to make that necklace, figure out what sort of profit margin you'd like to make (20%, at least, so if your item costs $50 to make, multiply it by 1.2, i.e. $60, or, it you're feeling really punchy, multiply it by 1.5 and charge $75). 

Now you've got an item that is worth putting your name on.

And if all this math is giving you hives, put down the calculator and do the most important (and fun!) step - Research (i.e shopping).

This is something that you should always do when starting a business, but it doesn't mean that you should ever fall out of the habit of checking up on your competition's pricing either. This means not just on Etsy but also in the non-virtual world. See how much similar items cost in boutiques, and department stores that seem like places where your target customer shops, and take detailed notes.

Once you've got all these systems in place, your work will be ready to present to the world. 

What has been your biggest challenge, or solution, when pricing your work?

What guidelines do you use when pricing a new item?

Add your response in the comments below!

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If you're an Etsy seller in the San Francisco Bay Area, contact Jen from Mama's Magic Studio about joining SFEtsy!

Dear Miss Mignonette - Getting Things DONE

Miss Mignonette - A Savvy Coquette

Note from Jen, SF Etsy Team Captain: I am absolutely delighted to introduce today's post, the first Dear Miss Mignonette column! Dear Miss Mignonette is an advice column, written by SF Etsy's own Kpoene' Kofi-Bruce, owner of Miss Mignonette and Mignonette Craftsulting. (By the way, did you see yesterday's post about this fantastic business and the amazingly generous offer she's made to SF Etsy members? No? Then go read it now then come right back!)

Dear Miss Mignonette will be a Wednesday column, offering insightful answers to solve the problems faced by crafters, artists, and other creative folks. You can ask Miss Mignonette a question for a future column via email.

And, without further ado, here's this week's dilemma!

Dear Miss Mignonette: I have been running my knitting business for three years and have finally gotten successful enough to quit my job and just focus on the business. This is a dream come true - the only problem is that now I can't actually get myself to make anything. I'm in a rut!


One of the biggest things I struggle with as a self-employed crafter is forcing myself to actually make things. With one thing and another, this month has already proven especially challenging (this post, for instance, is four days late), because it seems like the nice weather, the sudden need to start elaborate baking projects and work through my mending basket, and the seductive powers of Hulu have all conspired, along with my oh-so willing to be distracted brain, to keep me from finishing even the simplest of tasks related to my actual business.

This seeming inability to get anything done, combined with the fact that I am missing deadlines, all adds up to one big, bad feeling: I'm a failure, I'm a terrible crafty business owner, and I should just go get a job at a coffee shop because I'm obviously never going to succeed.

PHEW.

That was pretty painful, wasn't it? But for those of us who aren't masters of organization (and I'm the first to admit that I'm not one of 'em), it is easy to spiral out of control like this every time we fail to meet a self-imposed deadline or spend too much time playing around on the Internet.
Naturally, we want our businesses to be sources of creative pleasure that are just parts of the wonderful lives we hope to have - As makers, however, the very thing that brings in the bucks is often the last thing we feel like doing when faced with a sunny day or a particularly messy kitchen (have you ever noticed how, when you have a really big order to fill, your household chore list suddenly becomes strangely compelling?).

Here are a couple of tips that I have gotten from fellow business-owners, my therapist, my wife, and from my years owning a business.

1) Don't let your task list get the better of you.

You know that you have an end result you would like to achieve, say getting 300 necklaces assembled for bazaar bizarre, or knitting 50 hats to send to a store.
To top it all off, Thanksgiving is a couple of weeks away and you are hosting, AND you've volunteered to make the costumes for your kid's star turn as a jar of frankincense in the school Christmas pageant. Yikes!
The idea of hunkering down and actually tending to all this stuff seems so huge that all you want to do is curl up in a ball and watch reruns of House until it's time to make dinner.
Sound familiar? We've all faced times in our life where everything seems so big, and equally important, that it feels impossible to tackle them and we either end up running away or getting everything done and having a mini nervous breakdown. It doesn't have to be this way.

2) The next step is to take a step back and look at what your goals are. Make a list with separate columns for each project, giving yourself enough space to write under each project. Now look at your tasks. Prioritize them based on when they are due, order of difficulty, etc. You may discover that some deadlines you thought were looming become less scary when broken down to their component parts.

Now parcel out the steps needed to get from point a to z of each project. Every time you finish something, cross it off the list. Soon making a list and crossing it off will become rather addictive!

3) Now that you've got the task list, get on it.
Something else that is difficult for us as business owners is keeping ourselves on task. Nobody likes to be micromanaged, least of all by themselves, so treat yourself like a valued employee and establish a rewards system! This might sound silly, but you may even find that one task becomes a reward for another (i.e. the fun of turning your budding thespian into a biblical spice jar, or perfecting your pumpkin pie recipe, can be a reward - and a necessary break - from a task that feels less fun.

Establish a daily schedule so that you have time carved out to work, and balance it with time carved out to play (and also time to clean the house).
Remember those 50 hats you need to deliver? How much time will it take you to finish the hats? Parcel out a chunk of time every day that is only, ONLY for making those hats. Let nothing else interfere with that time. Play around until you find a routine that feels right to you, but by all means make an effort to stick to it. One good way to relieve any potential monotony is to switch up different business tasks from day to day, for instance - Monday is the day you update your blog, Tuesday is the day you add new items to your Etsy page, Wednesday is the day you work on marketing, etc. (this is also a good way to tie in the goals list that you made earlier and start establishing a really good schedule for yourself, complete with weekly tasks).

4) Establish a workspace.
For those of us who don't have studios it can be hard to stay on task when there is an entire house we can distract ourselves with.
This is dangerous because not having an established workspace can subconsciously prevent us from taking our work seriously. Think about an office that you worked in (or still work from) - do you use your desk in that office for anything besides work (and Facebook, of course)? Probably not. Having an orderly, well-organized workspace with all of our necessary tools signals to our brains that our crafting is deserving of serious effort and a clear head.
Take your craft seriously enough to carve out a space in your home that says "this area is for my business ONLY", and soon you'll find that you do your best work in that space.

And don’t beat yourself up if you don't find yourself falling into line immediately, or find yourself letting things fall by the wayside. The more you dwell on the things you didn't accomplish, the crappier you'll feel.

This is where the most important exercise comes in:
Do take time whenever possible to write down a list of all the things that you did get accomplished that day, for instance, though I didn't finish making a dress that has been nearly done for weeks because I was watching Gosford Park for the 20th time instead, I did get a great idea for a detail I want to add to the dress from the movie - see? Research!
I also took the time to see three different friends that I don't get to spend enough time with, and that yummy positive energy will carry over until tomorrow, when I get to sit down and work on my business some more. On my own schedule.

What tips have you found help keep you and your business on track? What obstacles have you faced in staying on task and focusing on your business? Share them in the comments!

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If you're an Etsy seller in the San Francisco Bay Area, contact Jen from Mama's Magic Studio about joining SFEtsy!