Monday, November 30, 2009
If you have a product priced at $5 with a profit margin of $2 and you sell 10 of them your profit is only $20. If you increase the price to 10 your profit margin is now $7 and if you only sell 5 your profit is now $35.
Now this is only talking in terms of numbers, there is a psychological effect involved in prices. Higher prices imply higher quality, by underpricing your work you can give the impression that it's cheaply made which can hurt your business. If you want a pair of shoes that won't fall apart in 3 months do you buy a $15 pair or a $60 pair?
Previous Posts on Pricing:
Breaking Down Your Costs
Tuesday, November 24, 2009
- Etsy Seller How-To: Get Involved With Black Friday and Cyber Monday Promotions
- Handmade News: The Black Friday/Cyber Monday Weekend Sale ArtFire, The MyEtsy Facebook Application, And Coupon Codes at Zibbet
- Sellers Assisting Sellers Blog: How to use a light box and photo editing software to make beautiful photographs
Friday, November 20, 2009
Thursday, November 19, 2009
I don't say this to make anyone feel sorry for me. I'm well past feeling sorry for myself, just looking back and seeing how it affected my life. Our experiences shape our lives and sometimes we don't realize how until years later when you see something that brings it into focus.
This was all brought up by this blog post by John Scalzi: Being Poor
Saturday, November 14, 2009
One little note: When adding the tab to your profile or fan page you may not see it in the drop down box but if you type in MyEtsy in the little search at the bottom it will bring it up.
I'm having bad luck lately with accidentally posting. I thought I posted the Weekly Inspiration yesterday and actually put it on my other blog by mistake (they are both linked to Flickr). So here it is a little bit late.
chocolate pearl, citrine, quartz and copper necklace, originally uploaded by citydetails.
Submit your photos for consideration as a Weekly Inspiration by adding them to the Flickr Group.
Monday, November 9, 2009
How much are you really making from your work? Sometimes we don't honestly exaluate our costs by leaving off some of the costs.
A common pricing system that I see is Materials + Time = Wholesale x2 = Retail but I think this formula is flawed because it doesn't take into account other costs such as shipping materials, other costs, and fees.
I use a formula of Materials + Time + 15% = Base Wholesale x2 = Base Retail however because of shipping and fees from etsy and paypal it becomes more complicated after this. I add the total cost of shipping which is postage and shipping materials. Base Retail + Shipping Costs = Total Cost This number is what I WANT to receive after fees.
Note: I actually have a sliding scale for wholesale depending on order size but 200% is what I use for calculating the retail price.
Now Etsy and Paypal do fees different, Etsy doesn't charge fees on shipping while Paypal does but for simplicity I'm just going to assume they both charge on the total amount.
Etsy fees: $0.20 + 3.5%If you are interested in the math here it is (skip to the bottom if you're not)
Paypal fees: $0.30 + 2.9%
Total Cost = CSo if the amount I need to make is $28 I need to charge ($28+$0.50)/.936=30.45
Total price I need to charge = P
Total Price - Shipping Costs = Online Retail
I've put this information into a spreadsheet on Google Docs with an imaginary item entered into it. You can download it in Excel or Open Office format and edit it with your own numbers.