Tuesday, August 13, 2013

A Price War ... And Peace


It's Shameless Commerce Tuesday, but rather than feature an item from my Etsy shops, Pasque Flower Creations and Aunt Pheba's Vintage, I decided to share a recent exchange I had with a customer about pricing.  It was a bit of a price war skirmish, but it ended peacefully.

Let me begin by saying I think pricing is one of the most difficult aspects of running an Etsy shop.  At least in my experience, there's a constant tension between my very real need to make a profit and the need to stay within the bounds of "what the market will bear."   So I recently increased my price on my chevron oven mitts by a dollar to offset the increased costs of fabric and the increased cost of shipping to get that fabric to Lincoln (since many of the fabrics I used in my products are not available locally).   The now charge $17.00 for a chevron mitt plus $3.00 domestic shipping.

So, a few days ago I received a Convo from a potential customer with a link to the aqua chevron oven mitt shown above, asking me to send a photo "with some reference or a hand size."  So, to provide a visual aid, in addition to inch and cm measurements, I took a photo with my hand on top of an oven mitt with a quarter beside the mitt to comply with the request.

Two days later, I received this response:

I appreciate the response.  I think your mitts are great, but I just can't justify spending $20 on one mitt.  I appreciate your help though. Thanks!

On a good day, I would have politely responded, "I am glad you like the mitts.  Thank you for visiting my shop."  And I would have left it at that.  But that day wasn't a particularly good day, and the little jab about pricing struck a raw nerve.  And so-o-oo I fired back this response:

I understand your position.

However, I have over $6.00 in materials in each mitt, and it takes me approximately 2 hours to make each chevron mitt, because quilting the zig-zag pattern requires many stops and pivots.  With the chevrons, I also match the design at the side seams, which requires more fabric.  I am already paying myself less than minimum wage for a quality handmade product using high quality 100% cotton fabrics, so I won't lower my price just to make a sale.

I'm sure you can find a mitt you like for $8.00 or $10.00 at Wal-Mart or Target.

Although it felt good to vent, I regretted pushing the SEND button.  But to my amazement, here is the response I received a few hours later.

Your unassailable logic has won me over. ;)  I will order one. Thanks.

As I prepare for Fall craft fairs, I will need to revisit local pricing.  The local market will not bear the prices I charge on Etsy, but my material costs and time investment are the same --- and the booth rental fees often amount to more than the Etsy listing fees + PayPal or Direct Checkout charges per item.

So, dear readers, I'd be interested in your thoughts on pricing.

TTFN
LeAnn







18 comments:

  1. I was gasping when I read your Wal-Mart comment! So true, but OMG that could have gone either way! I'm glad you had a logical and open minded customer!
    I don't think a dollar increase is unreasonable, in fact your price is still a bargain for a quality product!

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  2. I hear ya--loud and clear!
    brave of you to send a response of that nature. However, those ARE the facts, and who will educate the populace if not us?
    I remember long ago deciding to sell at a craft show and being told that you can't get anything for your time. I thought, 'why bother?'
    For some reason, scrunchies, which I don't sell tons of in person, have become my popular item on etsy. I make very little on them. I did raise my prices a bit though.
    I could go on and on about time and costs--such as the time to take photos, to list the item, to promote, etc. (the time to order supplies, do inventory; the cost of shipping materials; the time to package an order and mail it.)
    In this culture, we are used to having lots of stuff, and we want to get that stuff as cheaply as possible.
    OK. rant over for now!
    PS: Your work is quality and not comparable to a less expensive item from a big box store. I'm glad your customer saw the light!

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    1. You're right, Margaret --- the time involved is not just the "making" -- there's all the other stuff, too! Your scrunchies are beautiful--worth every penny and then some!

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  3. If only everyone would try to understand what goes into making a quality handmade product! I'm glad for you that it turned out well and I'm sure she will love her mitt when she receives it!
    Well done, LeAnn!

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    1. Thanks, Annette. I hope the customer likes it in the end.

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  4. Wow - what a pleasant surprise to receive a response like that! I have had to have similar conversations about my eco-clothing line pricing, although custers have often been much less polite. I'm glad you stood your ground and explained! :)

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  5. Preach! I've had some customers say some of the same things to me, except they've been rude. I always send them a response similar to yours! Even then, some people don't really understand, but I'm glad this customer did! :-)

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    1. Thanks, Paige! I was fortunate that this customer was not totally rude. It's sad to hear that others have had really rude customers.

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  6. Wow - glad it worked out for you! I understand that people want a 'deal' or whatever, but it is pretty frustrating when people try to haggle with you about a price. I'm sure there are people who price their things too high, but there are so many people who make handmade and feel like they have to undervalue their labor because people won't buy otherwise. I know I do it with some of my things. My doormats cost a lot, but the materials cost a lot and each one takes me several hours to make!
    I know a lady who used to sell handmade baskets at shows. The materials aren't that much compared to the knowledge and time. When people asked her how long a basket took to make to try to figure out how much she was charging for her time/see if maybe they thought they should just try themselves or whatever, she would say "13 years." She'd explain by saying each basket incorporated the skills and knowledge she'd developed doing every previous project so each basket was worth 13 years of her time.

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    1. What a brilliant response from the basket lady!! I expect to get haggled at craft fairs, but not on Etsy. I can't imagine those customers would walk into Macy's and say, "I really like that dress, but could you take $20 off, just for me, just because?" And I'm sure their profit margin is greater than mine!

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  7. I completely agree with the price increase. It really isn't that big of a jump. If people like your product, they will pay the dollar difference.

    I'm so glad you got the sale!

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  8. Good for you for sticking to your guns! That's a great buyer :)
    Pricing is SO hard! I have yet to find a formula that even comes close for my pricing...ugh.

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    1. I agree that pricing is hard. I struggle with it, too.

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  9. Pricing in my view is a matter of value. What a person values--a cheap product, cheaply made from Wal-mart or the joy of knowing you are supporting an accomplished small business crafter! I always love saying to one of my house guests, "My blogger friend made this!" The value is not only in the item, but in the friendship!

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