June 23, 2006 3:49 PM

From an exchange between members of an online group -- identitifying details removed:

Person A: I am just sick of seeing people just out to make a buck, regardless of how they treat others.

Person B: Right on. I think we need a new paradigm. In the past, it’s been: what will the market bear? I think it should be: what’s the least I can charge and still thrive?

Person C: I couldn't agree more...I have been trying for over a year to sell my products. I just haven't broken through the glass ceiling of doing a $100 show. I would have to sell almost everything to make that much. Everyone tells me to raise the prices but I don't want to feel like I'm ripping the folks off.

Higher prices are not necessarily the equivalent of gouging or "talking people for all you can get." Higher prices can be seen as a duty you owe to your best customers so that you can continue to deliver fabulous products.

In another life I was a fiber artist. To be specific, I designed, fabricated, and sold one-of-a-kind knit and highly embellished garments, mostly for women. You can see a particularly fun example of my work here, a "vest" I made for my 1967 VW Beetle. I'm mentioning this so that you'll understand where my adventures in pricing began.

I started selling my work at a local farmer's market. I sold the occasional hat there, but my heart was in creating exceptional pieces, and people looking for that kind of work don't expect to find it at a farmer's market. If an appropriate customer came by, my work was "invisible."

My work was then accepted for a Studio Tour, a tour-plus-sale for artists in my community. This tour attracted hundreds and hundreds of buyers, and they expected to see fine work and pay for it. When my pieces didn't sell the first day, I scurried around lowering the prices. I made myself (and the other folks in the same studio) nuts with all the price adjustments I made that weekend. Lesson One: If the way you show your work doesn't instantly tell the customer what about it they love, they'll never get close enough to even read the price.

I went on to show at a local art gallery. I put a price of $135 on an exquisite hand knit. The materials probably cost more than half of that; they included at least 45 textures and tones ranging from midnight blue to violet to silver-threaded black. It really was amazing, if I do say so myself. The shawl sat there all through the holiday (peak) buying season.

In early spring I pulled the shawl from the gallery and took it up to a shop in Port Townsend, an old sea port that attracts lots of summer visitors. The shop took the shawl and another piece, a very colorful sweater, and I priced the pieces at $400 and $600, respectively. They sold within two weeks TO THE SAME PERSON. Lesson: When the right person sees your work in the right context, price is not the primary element of their decision to buy.

I'm beginning to realize that I could turn this into the Great American Novel, so I'm going to cut to the chase and tell you what I have observed about price:

1. If we do not charge enough for our labor, we eventually get burned out and/or resentful.

2. When we do not charge the price that our hearts fell the work is worth, something in us feels "less than." It's an energy leak, and it can feel really crummy when you are leaking energy and trying to be a good person by not "taking advantage" of your customers.

3. When we take the time and care to be really skillful and well informed about our craft (and I know from what I read that many of you do this), we are responsible not just for compensating ourselves for direct labor but for earning enough money that we can continue to learn, grown, and refine our expertise. It costs money to buy books and magazines, to go to workshops. It takes time to research your raw materials -- my God -- I have had only the slightest glimpse of what is involved in sourcing essential oils, and if you do not consider that time in your pricing, you run the risk of running yourself ragged. Price your products so that your business "pays" for all those hours learning and sourcing.

4. If we do not charge enough for our products, it can be easy for customers to miss the true value. Price gets people's attention. You may think that is cheesy. I don't have an opinion about that. I just know that it's often the case.

5. What you believe about what you can charge (and get) is the biggest single factor in whether or not customers will be happy to pay your prices.

Let me say a bit about Number 5, because it is, in my experience, absolutely true and yet very hard for artisans to understand. Here's why it is true:

-- If a customer does not understand or care about your product, neither a high price nor a low price will convince them to buy it.

-- If a customer does value and appreciate your product, they will not be offended by a price that exceeds their budget. Disappointed, yes, but offended? No. The person who is offended doesn't truly understand what you are selling. Educate them (if they want to be educated) or simply bless them and let them go.

-- There are two kinds of products: commodities and specialties. A commodity is a product that gets the job done. Bulk laundry detergent. Generic oatmeal. When we shop for commodities, price matters. Why would I pay $3 a pound for essentially the same laundry detergent I can get for $.50 a pound?

A specialty, is a product that offers a value above and beyond the basic utility of the product. My husband is the more frugal one in the family, and he does the grocery shopping so that we don't go broke from my fascination with candles or exotic spices or whatever. He is the one who first bought organic produce, and when we tasted the difference, it became our first choice. It's often quite a bit more expensive, but the value added by virtue of it being organic -- a value we can actually taste and feel in our bodies -- makes the higher price well worth paying.

Back to laundry detergent. This is not an item I would usually splurge on, however I discovered a natural, lavender scented, biodegradable detergent that is just so delicious. It leaves the faintest, clearest scent of lavender on the laundry, I just love it. I usually combine it with another natural detergent that is somewhat less expensive so that the overall cost is lower than if I only used the lavender stuff. Do I resent paying more for the yummy stuff? NO! I am proud to contribute to the success of a company that is creating such a lovely product. I want them to succeed.

YOU GUYS ARE SELLING SPECIALTIES.

-- Your customers want you to succeed and to thrive. Really. If someone comes by your booth at a show and turns up their noses at your prices, it doesn't mean you (or they) have done anything wrong. It simply means they are not your customer. (My husband is not likely to have chosen the lavender soap, for example. It isn't worth it to him. Why should it be? It just isn't. But it is well worth it to me.)

I have seen so many artists and artisans break their hearts and finances over pricing. I'd love it if I can save just one of you from living smaller than you need to. Why do I care? Because when you truly thrive, when you earn more than enough from your work, your work can only get better and better and the energy you put into it can only become clearer and more joyful. It's not about fleecing people for the highest possible price, it's about paying attention to how much energy (in every sense of the word) it takes to envision, develop, manufacture, and sell products you LOVE and taking 100% responsibility for replenishing and even increasing that energy through your relationships with your customers.

Here are a few more notes on specialty products.

1 - They are marketing driven. Without marketing, how can we expect a customer to recognize the value we offer? It's not marketing to persuade, it's marketing to enlighten.

2 - Specialty product companies are built around their customers. They have an exceptional commitment to providing value to the people who want that value. You might say that they preach to the choir, and the choir loves it. And happy choirs attract new singers.

3 - Specialty product companies set prices to reflect the VALUE TO THE CUSTOMER, not the manufacturing cost. I assume that you don't equate your aromatherapy products with mass-produced products. Why would you price them like mass produced products? In addition to the cost of manufacture (including a healthy wage for you), your earnings should enable you to package your work beautifully, present it with respect and joy, and give you plenty of time and space for creativity, experimentation, and renewal. (That's called a vacation, by the way, a word that we who are self-employed sometimes forget entirely.)

4 - Superb product and service performance is a constant pursuit. If your sales slip or you experience price resistance, it is a sign that your customers need more education as to the value of your products and/or that it is time for you to innovate or improve service.

5 - Specialty product companies must consistently look for how their products can solve customer problems, how they can provide greater service. How well I remember feeling resentful and victimized by customer service concerns when I had my clothing business. How could I possibly afford to give that kind of support? The answer was and is, by charging enough that I can.

I know that there is more to setting (and getting) prices than this, but I just had to jump in to say that higher prices are not necessarily the equivalent of gouging or "talking people for all you can get." Higher prices can be seen as a duty you owe to your best customers so that you can continue to deliver fabulous products.

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