Price Your Craft Intro
Tara gentilly has been with us here from the beginning of our craft channel on creative life she actually was the very first instructor almost two years ago when we kicked off the channel terra is a business strategist she is an amazing author she has a very new book coming out that we'll talk about the observation engine and we'll talk about how you can find out more about that and we are so excited to bring her up for price your craft with terri gentilly please help me welcome tear way always a pleasure to be here it's my home away from home it really it really is tio now this class is going to be all about pricing which I know a lot of creative's especially have a very hard time with what's the biggest challenge that you find people have about pricing well there are some so many challenges but I think the biggest challenge that people have is they focus too much on trying to get the price right you know, following all the right numbers, making sure they account for everything and th...
ey don't focus enough on all the other things that go that go into pricing what you make whether that's the story that you want to tell the market that you want to be in the customers that you want to appeal teo and so we're going to talk about all of those things in this class so you mean you're not going to tell us just to pick a number of that? No, that would have made my life a lot and I'm done this's when a via an incredible class, thank you so much for joining us, and I'll let you take it away from thank you, thank you guys for being here. Thank you for being with me online as well. I am really excited to talk to you about this's, one of my absolute favorite topics, and we have got a lot to cover today and I hope to really change the way you think about pricing your products, pricing what you make by the end of today's class. So the first this this is our theme for the whole the whole class price is about so much mohr then cost and that's exactly what I was just talking with kenna about. There are so many different things that you can do with price beyond just accounting for the materials that go into your products, to the labour that you put into it, the overhead that you need to spend money on the profit that you want to account for, we're going to talk about all those things don't worry, there will be a formula at some point in today's workshop, there will be plenty of math. Which I've tried to make it easy for you, it's possible, but we're also going to talk a lot about storytelling. We're going to talk about value, we're going to talk about who you're trying to appeal, tio, but most importantly, we're going to start off by talking about what your goals are, because if your prices are also a function of the goals that you have for yourself and for your business, you're going to always feel like you're kind of just treading water and I don't want that for you. I want you to feel like you're making progress every single day toward your goals and having the right price is the kind of prices that are a function of your goals that are a function of where you want to be with your business and that are a function of the whole entire strategy you have for your business that's how you feel like you're making that kind of steady process. So as I said, the cost of materials, the labour that you use, the amount of money spent on administration, those things might be the most tangible pieces of how you price your products, but they're actually the least important when you're coming up with a solid price, so guess what? We're not going to talk about that until after the first break. Ware going to focus on really some kind of fun stuff soon we're going to talk about how to create a spending plan you guys hate budgets I hate budgets you know what I like to plan for the way I'm going to spend my money so that's what we're going to start off with today but before we do that but yeah actually let's talk about spending money well, the last thing you splurged on right what was the last thing you splurged on? Why did you buy it? How did it make you feel? What story wasn't telling you? What story was it telling other people about you and what part of your values or personality did it confirm so I'd love to get some answers from the studio audience and we can start introducing ourselves down here as well cannot what was the last thing you splurge style well that's not what I was going to say I did I well I did splurge on a new pair of fall boots fool you and how did that make you feel? It made me feel like I was walking on it. What story do those boots tell people about you that I will the red boots so about a little bit of you know, just a little flare I guess nice awesome back over to you guys what was the last thing you splurged on? Yes hi, I'm bronwyn and I have a small jewelry company called tireless hearts that makes up cycle jewelry from bicycle parts oh, nice um last thing I splurged on was two bags of compost and a whole lot of vegetables fantastic. Why did you buy that? Well, it's time to put in my winter garden and last year I was so busy that I didn't put it in and I said this year I'm going to do it no matter what gotcha and what does gardening mean to you? Happiness yeah the look that you have on your face this is something you are super passionate about and the things that we're passionate about tell us a lot about how we end up spending our money right perfect what else? What else have you guys splurged on? Yeah, I'm a food manufacturer. Um e I did do that but it was two pair of speakers actually, studio monitors there were way too much money. Okay. And why did you write that this studio monitors they would last forever okay? And they were very loud. Okay, what do you use them firing clear? Um recording music. Okay, nice and what his recording music mean to you a lot of everything. Everything music is everything but I focus on food right now first come on one more yeah, in the back hi and fanny I help people simplify their finances so they can be smarter over the money and you can find me at living richie on a budget and so last night we bought was a french door refrigerator and it's like a dream fridge because it's like I've always wanted a bridge like that and and just light because we needed it like the fridge broke down and we're comparing prices and we got like we got a good deal on it and the thing is like once we open the fit just like I feel like a rich person it's like so huge and it lights up it has different colors and it's like oh my gosh that sounds that sounds amazing so I love your example because you could have gone with a bargain refrigerator right you probably could have spent even though you've got a great deal on it you could have spent a lot less money and I think one fear that a lot of people have when it comes to pricing is that they I think people make decisions based on cost all the time how much does something costs I want the cheaper one right but that is the furthest thing from the truth the vast majority of the time we are not making decisions based on price so why did you decide what is it about that not just not refrigerator but maybe the way your kitchen functions or the sea space that your kitchen is what is it about that that made you decide to push it a little bit on that purchase had lot of space and it's just nicer and I don't know like I like to cook a lot, so um have plenty of space for liking freeze or like had the bottom drawer freezer, which is what I've always wanted and just the space was nice perfect. So what you said I like to cook a lot that's the exact same thing that everyone else said to write it's that passion that we feel for the the ways that we use the things that we buy that causes us to spend more don't you wanna have products that people are passionate about? Don't you want to have those those items? Those ideas that people want to splurge on because they are so passionate about them because they mean so much to them that's what? Really getting your price right based on value as opposed to cost conduce for you it can put you in a market where people aren't just buying because it's cute aren't just buying because it's impulsive although those things are great too but they're buying because they are legitimately passionate about what you make or about what you make allows them to accomplish kind of people china timing in about their most reach recent splurging and I've seen a couple people that have been talking about buying things for their bedroom whether it was watts who said european linen fabric for curtains in the bedroom now every time I walk into my bedroom I feel calm and happy and another one alex who said a carpet in a lantern from my room colorful happy have a hard time finding things so when I did I just went for it perfect I think if you can't be passionate about your bedroom I don't know why you can't be passionate about there's a lot of passion in the bedroom and mostly for me it's about sleep right now all right so think about the price of your last purchase with that price based on a material calculation did you run the cost of the refrigerator through your head or the cost of those linens when you said it is it's a good price does this is this an important is this of the right buying decision for me or with that price based mohr on the answer to the questions that I just asked why you bought it what you're passionate about what story it tells you what story it tells other people those are the things that really make our buying decisions for us those are the things that that help us get past how much something costs and really understand how much value it can add to our lives how much kind of depth and meaning it can add and again, I think those are the kinds of products you want to be creating that's why you're creating in the first place, make sure your products represent that, and one of the easiest ways you can do that is assigning them a price that supports that when you focus on price is a function of costs, those materials, the labor, the overhead instead of a function of value, you miss the opportunity to tell a better story, generate riel profit and grow your business. Now that's, the happy side of this let's talk about some of the sad stuff, eh? So this is your first opportunity to tweet me online audience. I love getting the twitters so you can tweet me at church until you use the hashtag craft week twenty fifteen so that we can track that here in the studio as well. Tell me, what do you worry about when it comes to price and again, I'd like to start with the studio audience here. What do you worry about when it comes to pricing what you make? Yes, michael, I am cynthia. Isn't there a my photography documentary style of photography? Uh, when I think about is the value that they would get as far as the product that I'm offering, for instance, large size photos, and then, um do you have any concerns about pricing teo for them to see the value in it or that it becomes it's valuable to them you know and being modesty modest modestly price so such expensive but it's also affordable gotcha so you're worrying about value and you're also worrying that your customers don't necessarily understand the value that you're providing awesome because we're going to cover that later today what else what do you worry about what concerns do you have when it comes to price yes hi I'm in I'm a visual scribe on facilitator so something I worry about prices catering to a different target market so I work with nonprofits all the way to corporations and so sometimes I struggle to try to serve those who don't have that you know the big operation budget to then those who have like millions of dollars of operating budget so I don't really know that sweet spot or how to navigate that great were intact about that later today too awesome how about one more in the back? Hi, I'm kitty I'm a jewelry designer and you can see all my pieces on my website which is studio kitty dot com k t e and my biggest concern with pricing right now is I really want to create things that are beautiful, timeless, interesting they have a really classy feel I really want to appeal to people who are professionals who want to wear the toe work because they add a little bit of flair. No one else is going to have anything like it, but then I'm also afraid that I'm going to accidentally price out a whole range of people who maybe don't have the spending money but still want beautiful pieces that make them feel amazing. Yeah, we can talk about that a little bit leader too, about how actually, when you price out a certain market, you price in a whole other market and so that's something to think about, too. Yeah, you can't it's hard to cater to everyone. I shouldn't say that you can't most of the time, you can't cater to everyone, but there is something to be said for really understanding, you know, when you're going to sure price out a certain part of the market, but price in a whole new market for you so awesome we could talk about that later. How about some online responses? Yes, similarly, this is from dalia on twitter. Thank you for tweeting in doing that quickly, some worries that it might is there a potential buyers away of the price is too high and I think that's definitely very calming, the biggest common, yeah, exactly, but I like what you just said about if you price out people your pricing in a new set obviously all absolutely because their shift there are lots of people who won't buy under that's right certain price but I just want to do some clothes shopping yesterday and I had in mind ah price that I wasn't going to pay under for a pair of jeans because you know I've had a lot of change genes in my life and where to chief jeans end up good well where did the expensive jeans end up in my closet years and years and years so that's definitely something to consider so let's talk about what happens when you don't get the price right? Because there's a lot that can happen and it's not just you don't make enough money that's part of it so first of all customers can undervalue your products and this was one of the big things is that people were talking to me about when I when I announced that I was going to be teaching this class they said how do I get my client my customers to really value what it is that I make how can I get them to stop haggling with me? How can I get them to just kind of inherently understand why something costs what it costs and not getting the price right? Going too low can cause your customers to undervalue your products which then in turn starts kind of a deaths spiral of haggling and not valuing what you do and so you know, so many people think if I priced byproducts low that more of them will sell it, I'll make more money over over the long term. That is not true. Oh, that is not true race that belief, that misconception from your mind right now getting the price too low causes customers to undervalue it because a whole a slew of other problems in your business. Another problem that you can have is that your products don't get merchandise to properly. So what I mean by this is that if you're selling wholesale and your products or price to this certain priced point, your retailers are going to be merchandising those products with all of their products of a similar price point. So maybe you make fine jewelry, but you price it in costume, jewelry, pricing, what's going to get shelved with costume jewelry and that's not telling the right story about your product. You want your product to be merchandised with other things that that help enhance the value of your product, not bring it down. Retailers can just overlook your products as well. They're looking for a certain price point, just like I'm looking for a certain price point. And so we want to make sure that the price point that you have for your product is the price point they expect the one that they're really looking for for the stores that you want to be in you don't have the money to invest in new equipment this is something we're gonna be talking about a lot about in lesson too which is coming up in just a little bit really if you don't have if you don't plan in your pricing for future growth for the needs of your business moving forward you're going to run continually into the problem of not having money for new equipment not having money to main production maintain production growth so say sales really take off but your price isn't right you're not going to have the money to handle the sales that come in that's one of the biggest killers of maker and designer businesses that are out there when production grows and the business can't handle it because of the prices that they've been charging you may just not have time to run the business you might have to be doing so many other things or you might have to be making so much that you can't run the business and you can't afford to hire someone to do it for you and then finally you don't have money left for taxes have any of you gotten caught in the situation yet I have I have this is a big problem if you're not accounting for things like taxes in your prices you're getting big trouble andi I can tell you from experience you don't want to be there not as bad as it's sounds but it's still not something that you want to have to deal with so what happens when you do get the price right when you do get the price right people tell themselves a story about your product that helps you sell it when you get the price right people start telling themselves the story that they need to hear to buy your product think about that product that you splurged on that purchase that you made that may be stretched a little bit for you were telling yourself a story it may not have had actually anything to do with the marketing of that product it might have happened to just do with you know what you could see and feel and touch and the price tag that was on it that can tell you so much so when you get your price right aa lot of the work is being done for you if you feel like you are constantly having to market market market, promote, promote, promote sure some of that comes with the territory but a lot of times it's an indicator that the price isn't right that the positioning for your product isn't right that the wrong story is being told and so I want to help you take care of all of those parts just by getting the price right? So I'm good cool, so today we're gonna look at price from all different angles, and we've got four kind of big waves that were doing that. First, we're going to focus on the goals that you have for yourself and the goals that you have for your business, so the prices you set support, the life you want to live and business, you want tohave, we've got to start there. If you are not setting prices to support the goals that you have, you're always going to feel like that goals are, those goals are out of reach, that you're always just treading water instead of getting ahead. Next, we're going to look at what your baseline profitable price needs to be, so that you can generate profit, whether you sell wholesale or retail, we're also going to take a look at the wholesale miss, because I know this is a big problem, too, and I'll let you know what that is in just a bit third, we're going to determine the story and all the accompanying details of that story that allow you to feel confident in your price, because confidence, I think, is another big problem when it comes to price, and you can do all the math, but if you don't have the confidence behind that math, if you don't have the confidence behind what's on the price tag, oh, you're not going to feel comfortable asking for it in the craft show booth in the trade show booth online. When you're not confident, your customers now, and that stinks on. Then, finally, we're going to create an overall pricing strategies so that you can reach the goals that you defined at the very beginning.