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Thursday, July 21, 2011

Pricing In the Handmade Marketplace

I just read a blog over at ScoutieGirl titled 3 Reasons to Pay More for Your Stuff and I came away with mixed feelings. Don't get me wrong, I love quality, I love handmade items, I make handmade items, and I sell handmade items, but the reasons she gives to justify paying more for the stuff we buy (and charging more for the stuff we sell) is great in theory but is it practical?

Tara gives three reason to justify paying more:

  1. To support an individual.
  2. To support an economy.
  3. To support yourself.

I've always had an entreprenural mind. Ever since I was a kid I wanted to own my own business and in my lifetime I've owned a couple successful businesses. To me, letting the market dictate pricing is the lifeblood of a free economy, so paying more 'just because' is not logical to me. The reasons Tara sited for paying more left me feeling like she wanted everyone to pay more 'just because'.

Quality is quality and quality demands a higher price. If those who sell handmade items offer quality and/or uniqueness, those items will demand a higher price in the market. But everything that's for sell will only garner what the marketplace says it's worth. People do not pay more for items 'just because'.

Individuals who sell handmade items can't get caught up in the 'holier than thou' mentality of thinking that 'just because' something is handmade it's of better quality and thus the market should pay more. Those that do and then don't offer the quality or uniqueness that demands the price will quickly fail.

That being said, there is a small segment of the market that thinks on a higher level and feels they must make their purchases count for 'the greater good'. These people will pay higher prices just to support an individual, an economy, or to make themselves feel good, but that segment is small. Most purchases, although emotional, are still made with knowledge of what an item is worth and if similar items of similar quality are offered, the lower price usually wins.

When pricing your items for the handmade market, think about what you would pay in the retail market for a similar item of similar quality. If your item could easily be sold in a department store, then price like a department store. If it is unique enough to sell in a specialty store, boutique, or art gallery, then price it accordingly. If it has the quality you see in a bargain store, then price like a bargain store. Do not undervalue your item and the time it took to make it, but do not overvalue it either, in both cases the outcome is not good.

Until later ~

Reba

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