wholesale pricing

[missmarisa]

I am terrible at pricing my products. I sometimes feel like I am too cheap and under selling myself, especially when I consider things like packaging (which - for some reason - means making complicated paper boxes by hand), but I am too worried about increasing my prices and as a result - losing sales.

Generally, I make sterling silver jewellery by hand, which I love but does require expensive tools/equipment and materials. Usually I weigh the silver after I have made the item and then factor in things like findings, wastage, time, consumables etc. I FEEL like I'm doing the right thing, but then I just don;t know...

So - my question is ..... How do people figure out their retail price AND their wholesale price? I'm just after a guideline (unless of course there is a magic formula??)
Thank You!!

(note: my shop is pretty bare at the moment and missing some love, but I can feel a making bee coming on):o

[annalaura]

With every shop I have dealt with, the retail amount is double your wholesale price. So if you have jewellery and you are selling it for $50 each on Made It, this would be your retail price. If you approached shops to sell it you would have to sell it to them for half the amount, maybe even less to factor in GST as most shops will be earning over $75000 so will need to pay GST on the items they sell.

If you find that your prices at the moment, before approaching shops is okay, but it is too little if you halve it to work out your wholesale price, change them so you get a fair amount for your wholesale price.

Also take into account, if you're selling at markets, you will need to see at your retail price. I've spoken to shops who said they stock products by people who also sell at markets, but they sell at a much lower price. They cannot compete with this, and so cannot stock those products. I've also heard from sellers who say it is okay to put your prices down at a market, but I don't think I agree with this.

This article by Simone Walsh is an invaluable took on pricing your work.

http://www.simonewalsh.com/about/articles/pricing-for-craft-design.html



Also, with pricing, there are a lot of things to think about other than just the upfront basic cost of you materials for the items you make, but Simone talks about this in the article.

[debproductions]

Thanks for this invaluable information, Annalaura. I have also been approached with wholesale enquiries, and this has brought a pricing issue to the fore, which I'm still thinking about.

It depends very much on the nature of the product and the costs and time that go into each one. In my case, it is labour-intensive knitting and crochet, with a large amount of hand work in each piece.

I am very happy with my current retail prices, they provide a tidy margin. My current wholesale prices barely break even. If I raise my retail price, and thus increase my wholesale price, then my sales may fall and that would be a problem. I also don't want to go into mass production, making several identical scarves, as mine are one-offs and unique, so I'm looking at making them even more unique, more "me". I can't compete with machine-knitted pieces which are widely available, scarves are selling for $70 in DJ's for example.

I'm thinking that wholesaling is not right for me at the moment, as the amount of work and time that go into each creation is just not worth it. I'd also have to produce double what I'm doing at present. And I've no wish to enter speed-crochet contests.

At the moment, I'm considering doing more craft shows, so I can sell at my retail price and pocket the profit. This is in addition to my online shops of course. I'd prefer to sell online, it is more efficient.

The other direction I'm looking at is product design, where I am designing smaller novelty products, with less time involved in making, which could more profitably be wholesaled. The costs of shipping are also reduced, with smaller, lighter products.

All advice is welcome! Thanks, Deb

[annalaura]

When you say you can't compete with the machine knitted DJ scarfs for $70, does that mean you can't charge that amount or you can? I wasn't sure what you meant with that comment.

I think pricing with knitting is really hard due to the time that goes into each item, particularly if you items are unique. I had a look in your Etsy shop and your stuff is stunning.


I purchased a scarf from Etsy, it was by Green Olive (http://greenolive.typepad.com/greenolive/) and is so beautiful and stunning. It was $100 and I more than happy to pay that amount. I knew I couldn't get that quality in shops like Myer or DJs, even though they would be charging the same amount.

[missmarisa]

Thanks Anna and Deb! I really appreciate your advice. It can be so hard when no one you know does anything like this (i.e. sell online). I find this forum much more user friendly than the etsydust group.
Thanks again

PS I have re-named my shop (perhaps a stupid idea but we'll see. If you have time, check it out and let me know what you think?)

[annalaura]

The dust page is really annoying. We made it ages ago when we first got the Australian Street Team going in July 2006. We used to have this email thing going where everyone would email everyone. While it was cool to think you're popular with so many emails, when you were getting 20 an hour it was too much. I'm hoping we can get this forum into a really good place for all Australian sellers, as the Etsy forum is just too big.

[Imaginart]

Hi guys:) I have the retail/markets problem too. I tend to have some items on sale just for the market day. I show the before sale price for each item (this is the same as what is charged in store and on my site). I am hoping this is fair for the shop that has to pay rent, make a living etc and therefore charge more and also attractive for market customers and myself.

It's not the perfect solution but it's the best one I have at the moment:o

[Imaginart]

I forgot to say Anna that I find Etsy a little overwhelming with the huge numbers of people involved. Madeit is a lot more personal that's for sure. I was thinking of joining dust - maybe it isn't worth it:confused:

[annalaura]

The Dust Yahoo group is good, but it is hard to have a regular forum community there. In terms of joining the whole street team, anyone who is in Australia is pretty much already a member because they are in Australia. You can join up to the street team on Etsy, but all that does is put your name on a page for the Australian Street Team and nothing else.

[Imaginart]

Oh ok I get it now. Thanks for explaining!

[thelittleorchard]

I am working on a wholesale price list now for an enquiry. I am also in the process of changing some of my prices at my Etsy store. (Here I will just leave prices as is, but new items will reflect new prices).

For me I feel that selling online shouldn't be a "retail" price, as I am not having to pay for all the overheads that a real shop would have to. But at the same time this turns off a retailer who approaches you. Also as crafters we do undervalue our time spent (my hourly wage as a crafter is half what I get paid at my "go to" job). For me it is a definite struggle with what I feel an "online retail" price should be and then the ability to fill wholesale needs.

I also think I am a little under-confident in my work to actually price at what my time would be worth if I were at my "go to" job. But I am currently trying to jump from "hobby" to "business" and am gaining more confidence in what I am creating.

[karasmith]

Hi there,

I thought I'd throw my 2¢ in... for what its worth! We all start out fairly cheap and then as the demand grows, you end up doing your business full-time, and have to pay bills, well, your product does have to be priced right in the market and it does creep up. Don't forget, you don't have to compete with mass produced items at Dept Stores - your item is not in competition with that sort of product.

I am doing Springboard (http://www.australiandesignunit.com) at the moment and we are learning how to properly price your item. If you work out really what it is worth, sit tight with that price. There is no point getting heaps of orders, constantly busy, but never gaining a proper profit to establish your business (ie look at the thousands of cheapie items on etsy). Once you have customers, you can't up the price then!

Work out who your market is, what they will pay, ask friends, family, customers what they perceive your brand name to be and jot down the key words. Line it up with words you are projecting and aim towards the brand you are striving towards.

[annalaura]

The issue with selling at a lower price online and at markets compared to what you are selling the items for in shop could cause shops to not order from you again.

Think of yourself as a customer (and this has happened to me and it is annoying) you purchase something in a shop, you go and look at the persons online stuff, maybe the blog, find his or her online shop and realise you could have got that item for a lot less. People are smart and will figure out the best way to get your items for cheaper and then not support the shops selling your products.

I've heard people say that they do sell for less online and these are people who are not stupid when it comes to running a business, but for me it doesn't sit right both for the shops and the customers. One way around it is to do two different lines. One for online which is cheaper and then one you can wholesale, but then you're cutting yourself in half and probably ending up with double the word as each line would need branding, promotion and all that jazz.

[karasmith]

And you want the shops to support you - they have the wider audience and come in with the nice wholesale orders when times get tough!