I have taken Marketing as a module during my poly and uni days (which is NOT too long ago) and I have been applying what I have learnt to market GlamPuss.
But my biggest issue is that I can’t seem to apply what I’ve learnt about pricing to reality. Well, that’s because I only learnt mostly the theoretical stuff and then memorize it for exams – during which, I just regurgitate everything that I have memorized.
So yeah, pricing is a total nightmare to me, like seriously. We know that:
Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organisation.
The remaining 3p’s are the variable cost for the organisation. It costs to produce and design a product, it costs to distribute a product and costs to promote it. Price must support these elements of the mix.
Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organisation.
Pricing should take into account the following factors:
Fixed and variable costs.
Proposed positioning strategies.
Target group and willingness to pay.
That sounds easy enough when you read and say it. And of course there are so many different types of pricing strategies and methods as well such as:
It all sounds/ looks great and everything plus it’s easy to understand the concept, but honestly it isn’t easy at all to apply it. Maybe it’s because I’m just awful with crunching numbers?
To seek help to solve my issues, I’ve also read/looked up on loads of information and guides about pricing and I’m pretty sure that I wasn’t the only one. Okay, I knew that there would be people in the same situation, but wow just look at the figures!
But anyway, I did manage to find one that is pretty simple:
A general rule for pricing your items is to figure 30-40% of what you originally paid. The condition of the item will raise or lower this figure.
Ask yourself “What is the most I would pay for this item?”
So far, GlamPuss has launched 2 collections, and I have attempted to use:
1. The above pricing method
2. Observing my competitors’ pricing and adjusting accordingly
to price my current items as seen HERE and HERE.
Also, because I have handcrafted items up for sale as well, I found out that a different pricing strategy has to be used for that.
This is the most popular one (used by most Etsy sellers):
Materials + Labor + Expenses + Profit = Wholesale x 2 = Retail
Full Details: HERE
But really, I personally don’t like it. Why?
FOR EXAMPLE using the method above:
$5 + $7 + $5 + $4 = $21 x 2 = $42
O_O you kidding me?
I highly DOUBT that ANYONE would pay that much.
I mean honestly, that’s CRAZY EXPENSIVE!
So for Collection 2, I tweaked the formula a little to make to it more affordable. This is because I am right now only an amateur/beginner crafter and these are all my first experiments as mentioned here. I can’t demand such a high price.
1) Materials + Labor + Expenses + Profit = Retail // $5 + $7 + $5 + $4 = $21
2) Then I took into account of my experience, the pricing that I think people might pay for it and adjusted it accordingly.
Afterwhich, I have also tried to gather feedback from both my friends and random strangers about their opinions about my prices.
It’s been positive so far with 99% saying that it’s affordable with some even saying it’s really cheap/low.
An example can be seen from our sponsored blogger – Catherine’s review of GlamPuss here.
But really, to date, I still don’t know what I am doing is right.
Like right now, I’m looking at the prices that I have set for my Collection 3 items launching tomorrow, 7 December.
And I’m thinking:
Are my prices appealing? – If so, why hasn’t anyone expressed interest in my other items yet?
Is it too low? – After I compared it to MORE shops from before, it seems like I’m pricing a bit low?
Should I increase/lower my prices? – YES? NO? WHY? ARGHHHH
Gosh, I KNOW I think too much.
It’s such a headache, really.
But that’s my train of thoughts that I can’t stop.
Thank God for this blog so I can really pen down what I really think and it relieves a bit of my ‘burden’.
Sigh, decisions decisions decisions…