Do you feel comfortable with your prices and your profit? Use these tips to determine your pricing and capture new customers.
Master the basics. Use this formula when setting your wholesale prices, so you know you are making money on everything you make in your studio:
Overhead+Materials+Labor+Profit = Wholesale Price
Mark-up to retail price is often more than double (keystone). Your wholesale customers may add an additional percentage, so that the wholesale price could be marked up 2.3 – 2.5, or even more. This happens partly because your customers are paying freight charges, which they include in the cost of your goods, and also because their own overhead may require it.
Including that profit margin into every piece you make gives you the room to invest in your business. Profit is not what you earn for your labor; it is an additional percentage that enables your business to grow.
Diversify price points. A broad range of prices gives you the opportunity to catch more customers. Offer some items that are introductory pieces in your line, so that beginning collectors can start making purchases from you and eventually move up to buying your more expensive pieces. You can spread your price points within one collection, or have separate collections that are higher and lower-end. An example would be jewelry designs available in both silver and copper, which are priced differently because of the materials.
Raise your prices. Consider extending the high-end of your line. What’s your most expensive item? Have you considered moving your price range even higher with more luxury-type items? This could you put you in a position to enter a different tier, and earn new and more affluent customers. Work on the presentation, packaging and marketing language you will use to appeal to this new customer.
Increase the perceived value of your work. The more information you share about your collection, the better. Add value by skillfully telling your story and describing your technique. You might talk about the scarcity of your materials, or what makes your artwork so unique. Don’t forget to focus on the benefits to the customer; after all, customers care most about what’s in it for them.