15 Tips on Pricing

15 Tips on Pricing

There’s a lot of chat on here and the facebook group about pricing. I put together these tips to help give some pointers when working out price.

  1. Charge what the customer will pay - not what you would pay - you always undervalue your own work.

  2. Pricing based on time plus materials is usually the wrong way to price.

  3. When calculating costs, include your fixed overheads as well as per item costs.

  4. Don’t forget packing and shipping which can be expensive.

  5. If you are too busy, put your prices up, you are undercharging.

  6. Adjust your pricing - if an item sells well put the price up, if it sells badly, drop the price (or the item)

  7. Repeat work should be cheaper - your existing customers are the easiest ones to find and market to.

  8. Or: give discounts or coupons to existing customers

  9. Be absolutely clear how much you need to earn per hour for this to be worth it. The answer may be 0 - its for fun, or a proper wage

  10. If this is your sole income - make sure you have enough pay for holidays, sick days, pensions, insurance, etc etc etc

  11. If this is for fun, make sure you are still having fun doing work

  12. When the difference between cost price and sell price is small, a small change price is a big change in profit

  13. Value your time!

  14. Your product is ONLY worth what a customer will pay

  15. Your product IS worth what a customer will pay

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  1. Offer volume discounts - for example, 100 keychains for the price of 90 ( especially when they fit 50 to a sheet of material) - because your material costs are basically the same, and you are creating the perception of value with your customers.

  2. When putting out initial prices to a prospect, leave some room for negotiation. It gives you room for profit, and the opportunity to let your customer feel they have “won” if they like to negotiate with you.

  3. Plan for sample costs / prototyping in custom work, as well as trial and error time.

  4. For “standard” projects, ALSO plan for sample costs - the ones that you make as giveaways that help you land the business. (And by the way, if you are planning on doing promotional items, consider this: if you are going to try to sell to businesses at a fair, home show, etc, make a sample unit with THEIR logo / name, etc - and YOUR phone number. Print a stack of them in advance and take them to the show and give them to your targets in THEIR booth (when they don’t have customers in their venues) - it’s a very effective way to market.

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Nice distillation of a lot of discussions here. Thanx

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All of those suggestions and ideas are very valuable. Thanks to you both.

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This is a great bit of advice. I do woodworking as a hobby, and I always have a hard time coming up with prices for stuff. I always feel that I set prices too high, but from what I’ve gathered through various sources is that I’m not charging enough lol

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