When I price my piece, it feels too high

[Tugadude]

A lot to chew on here.  Lots of interesting comments and suggestions.

Although I haven't sold my leather goods, I've been involved in sales for the last 36 years on both the distributor and manufacturer level.  Setting prices is and has been a source of frustration the entire time.  There will always be bottom feeders, and you must resist the temptation to engage with them and their short-sighted strategies.

What I've found to be helpful is educating the consumer.  There used to be a retailer in my city that actually used the phrase "an educated consumer is our best customer" in their advertising.  I agree wholeheartedly and therefore it is partially my job to educate.  The consumer will also learn from other sources and good old "trial-and-error" experience.  And the old cliché, “The bitterness of poor quality remains long after the sweetness of low price is forgotten.” is absolutely true.  So differentiate.  Explain why yours is better than theirs.  But make sure it actually is!  Nothing is worse than finding out the competition is better than you thought, and so you have to do your own homework.

Some obvious things to focus on would be:

1.  Your skill and dedication to quality, double-checking each and every item before offering it for sale.

2.  Warranty.  Standing behind your product and legitimate issues that arise during usage.  This is obviously fraught with risk and there are limits.  Or should be!

3.  Better materials.  Again, make sure they are before claiming they are.  But if you use a demonstrably better quality of leather, then it comes at a price.

4.  Ability to customize.  Some mass merchants also customize, but they certainly have greater restrictions and/or limitations.  It is up to you to decide how much to pursue bespoke products or if to do so at all.

5.  Handling.  Does the competitor acknowledge orders?  Or are customers left to wonder whether the order was received or not?  Do they follow-up with estimated delivery dates?  Do they inform you that the item has shipped?  If not,

     then those might be ways you can differentiate yourself and your company.  Being available to answer questions about the product might be another way.  That's a balancing act though.  More time on the computer is less on the bench.

Those are some of the things that immediately come to mind.  There's other ways to differentiate such as delivery options.  Some manufacturers have very little in the way of options.  Perhaps that is something that can help you persuade customers to side with you, especially when combined with your other advantages.

[Viles]

Those prices are correct. I've had decades experience in pricing mass merchandise. $80 for all that is fine. You have to decide if you want a slow dollar or a fast nickel. Please pick the slow dollar for us makers. The margins people like Triple K and Hunter are makin are just about 15%, not much. They make $ buy buying raw material in mass quantity. 

• Make a name and brand, tell a story, people will appreciate and buy that. 
• You don't want the cheap customers, they complain and return too much. 
• If you double your price then you're just making enough to make it again. Triple that sucker at least!
• The online trick is to price high, adding in marketing, overhead, ect. and then add 15%. Then offer intro discounts and then larger ones for return customers. 
• All the things Tugadude said are essential. 

There's an American ebay company that is selling their cheap made leather for wholesale prices to individuals and it's so hard to compete. I've talked with the owner but he just want to continue selling a lot for cheap. I know the people he is buying from and they are only charging like $15 a holster because they like the make $2 per item model. 

I hope you do fantastic this coming year!

[Samalan]

On 12/29/2021 at 11:15 AM, Warhauk said:

I know there are algorithms for prices our work and the one I've been trying to follow is roughly the (material + time) x 2. Then, I feel like the prices is too high so usually end up lowering it a bit further even though I suspect I am already undervaluing my time aspect quite a bit (I'm a little bit slow on my production speed but still am probably undercutting my time too much).

But then I look at the price I am trying to sell and it feels too high still. For example, pricing out a set of 4 bondage cuffs, which cost me about $10 to make per cuff, and doing the hand stitching, hand dying, etc. Even if I only value my time at $10/hr AND assume it only takes 1 hour to make a cuff (which I am pretty sure it takes a decent bit longer but I tend to have issues timing, with other responsibilities and breaks and stuff), I would be charging about $40 per cuff, where as on etsy, similar looking things (though most likely lower quality but they look pretty similar) are like $40-80 for an entire set of 4 cuffs, collar, and leash.

I am just feeling pretty disheartened trying to sell my stuff when competing with these mass producers.

 before you start pricing ask yourself this question first, Is it a business or hobby I wish to have .

[PastorBob]

2 hours ago, Samalan said:

 before you start pricing ask yourself this question first, Is it a business or hobby I wish to have .

That's a great point @Samalan.  Sure I like getting paid for the work I do, but more importantly, I enjoy it.  I try to make enough so I can buy more leather and stuff.

[Samalan]

8 hours ago, PastorBob said:

That's a great point @Samalan.  Sure I like getting paid for the work I do, but more importantly, I enjoy it.  I try to make enough so I can buy more leather and stuff.

That's what I'm talking about you first have to know what it is you want. Buying more leather and stuff is great that's what you want and that's what your doing.

[Klara]

Yeah, well.... The way I see it, amateurs (not meant in a negative sense) should not undercut the prices of professionals. Because if they do, and if there are enough of them around (as in knitting) it becomes extremely difficult for the pros to sell their goods.

[toxo]

I got a commission yesterday for my Owl Bag.  Never sold one before so had to come up with a price.  We'd had a bit of a conversation where I told her I was getting away from bags in favour of smaller items because some of my bags sell elsewhere for £300/£400 but as a non brand I couldn't get anywhere near that. Then she saw the Owl and asked the question. With no clue (It's been a year since I made it.) I spun it back to her and asked what she'd pay for it. She said £150. Now this woman has so many ailments the poor woman took 5 mins to to tell me what they were. Then she said she wanted it lined with an internal zipped pocket so we agreed on £200. Now the good guy in me wanted to give it to her for cheap but the devil sitting on my shoulder told me that she's getting disability benefits and somehow I'd like to get back some of the money I've laid out for the skiver and the two sewing machines etc. I have the leather for it so it's just time really.

What are the hives thoughts?

 

[chuck123wapati]

23 minutes ago, toxo said:

I got a commission yesterday for my Owl Bag.  Never sold one before so had to come up with a price.  We'd had a bit of a conversation where I told her I was getting away from bags in favour of smaller items because some of my bags sell elsewhere for £300/£400 but as a non brand I couldn't get anywhere near that. Then she saw the Owl and asked the question. With no clue (It's been a year since I made it.) I spun it back to her and asked what she'd pay for it. She said £150. Now this woman has so many ailments the poor woman took 5 mins to to tell me what they were. Then she said she wanted it lined with an internal zipped pocket so we agreed on £200. Now the good guy in me wanted to give it to her for cheap but the devil sitting on my shoulder told me that she's getting disability benefits and somehow I'd like to get back some of the money I've laid out for the skiver and the two sewing machines etc. I have the leather for it so it's just time really.

What are the hives thoughts?

 

you did just what i do most times when I'm asked to make something, first question i have is how much were you thinking on spending for it. it starts the process. Gives me and them an idea of how much they are willing to spend and gives me the ability to give an honest answer. " i can make it plain jane for that or how fancy do you want it? They also know then if they can afford what they want.

[Samalan]

3 hours ago, Klara said:

Yeah, well.... The way I see it, amateurs (not meant in a negative sense) should not undercut the prices of professionals. Because if they do, and if there are enough of them around (as in knitting) it becomes extremely difficult for the pros to sell their goods.

We should all take the Jesse Owens attitude towards business when he was asked if it was harder for a black man to become an Olympic athlete he said to the young black man who asked that question" no you just become so good at what you do it doesn't matter what color you are" as a young man I saw that interview with Jesse Owens and never forgot it . As I was writing this I had to go out to a friends store to get some chicken that store is the best they make the best bread, cheese ,sausage, and everything Italian .they are the very best at what they do It's all the work you don't see it takes so much work to be the best their focus is on product first not price .

[Klara]

Wrong comparison. Jesse Owens was a sprinter annd long jumper -  quantifiable sports. If you are the best, you are, not much quibbling about it. How many black dressage riders do you know? For there the results depend on the judges' perceptions. And of course, first you need to get to competition level.. (https://www.elle.com/fashion/a34050278/black-equestrians/)

With quality and price of goods it's similar: Few absolutes, it's about what the customers see and think and feel.