Target Market Challenge!!

So this week's blog post is going to be super short and sweet. Why you ask?  Because I'm this week's guest blogger over on The Promo Frenzy Team's blog!  Yay!!

So instead of carrying on over here, and repeating a whole bunch of information, I thought I'd just write a quick post and tell ya'll to head on over HERE and read my latest article about target markets!!  Seriously, go check it out.  It's a super informative article (if I do say so myself).  The best part?  There's a fun, interactive challenge at the end!

You don't have to be a team member to participate (though we love new team members!), and one randomly selected winner will get a super awesome FEATURE on the Promo Frenzy blog, which has a huge audience.

So don't delay, head over today!  (Hey that rhymed!)



And just because Blogs are boring without pretty pictures, here are some new arrivals in my shop that are just perfect for summer (which is finally here!!)

These are all hand knotted cord bracelets, some with bright, fresh gemstones, others with sparkling, fun faceted crystals.  They all look great on their own, but they're also just perfect for stacking together.

Arm candy for sure!

Tune in next week for a follow up on target and niche markets.  And as always, feel free to stop by THIS Etsy thread, and join in the discussion!

Want to read some more?  Check out these super informative blog  posts!
A Pricing Experiment Pt 1
The Summer Slow Down
Let's Talk About Facebook

The Summer Slow Down

"ZOMG!  My stats have dropped way down, I haven't had a sale in days, what is Etsy trying to do to me?!?"

If you've been in the Etsy forums at all...pretty much ever...you've probably seen posts like this crop up--people freaking out (or just expressing mild concern) that their stats are dropping, and looking for some kind of explanation.  I thought that'd make for an interested blog post.

First of all, welcome to the wonderful world of retail.  There are ebbs and flows in every retail business--sometimes you'll be up, sometimes you'll be down, and sometimes you'll break even.  There are a thousand reasons why things start to slow down this time of year, or any time of year really.

There are no major American "gifting" holidays between Father's Day and Grandparents Day.  A whole string of big gifting holidays are clumped right together month after month for the first half of the year.  If you want to get technical, there's really a major (American) holiday every single month from September through June (for future reference: Grandparent's Day, Halloween, Thanksgiving (inc. Black Friday and Cyber Monday), Christmas, New Years, Valentines Day, St Patty's day, Easter, Mother's Day, Graduation, Prom, Father's Day...)  Let's face it, for like 10 months out of the year, we're spoiled rotten with built in holidays and themes to make, market and promote around.

There are lots of smaller occasions scattered around, but when we're talking retail, these are the ones that seem to drive the most traffic in the months and weeks before.  So keeping that in mind, if you don't have items relevant to these gifting holidays, your traffic is probably going to take a hit.  No one cares if you sell ladies underwear when they're shopping for Father's Day (well, maybe someone does...) so naturally, you'll see a drop in traffic.


 A myriad of other reasons could be affecting your traffic as well.  The weather's getting nice; school's wrapping up; people are spending their disposable income on vacation planning, not buying stuff; you haven't tweaked your SEO-type stuff for awhile; you haven't listed anything new in awhile, you aren't doing any promotion off-Etsy...the list is really endless.

If you're doing everything you know to do, and not seeing results, that doesn't mean that Etsy is screwing with you.  Yes, Etsy is constantly running live experiments, and we all know change is hard.  But while these experiments most definitely impact those being included (a small percentage we're told), they simply can't be held accountable for a wide spread slow down.  That's just not logical.

So if things are slowing down, and you're frustrated, take a break.  Use your new found free time to create new things, read a book, lounge in the sun, enjoy not being chained to Etsy.  And for those of you relying on Etsy for your income, I can fully empathize with the stress the summer slow down must cause.  My best advice--do what you can, but remember, ultimately it's out of your hands, and freaking out about it isn't going to help anyone.  Make a note of when the slow down started, and try to plan for it next year.  Keep plugging along, things will pick up again soon.  (I hope :\)

In the meantime...if you're really bored because your stats fell off a cliff and are showing no signs of life, here's a recipe for some super awesome "cheesecake" stuffed strawberries.  They're sugar and fat free, unless you drizzle them with chocolate, so feel free to indulge a little.


Ingredients:
8oz fat free cream cheese
Lite Cool Whip
1 box Jello sugar free, fat free vanilla pudding mix
1 cup low fat/skim milk
Strawberries.  Lots of strawberries.

Instructions:

• Let cream cheese soften a bit on the counter or in your mixing bowl.  

• Using a handheld or stand mixer set on low speed, mix up the cream cheese and milk.  You should have mostly liquid in your bowl, with maybe a few chunks of cream cheese hanging about.

• Add the pudding mix, and blend for 2-5 minutes, until things start to thicken up.  Don't forget to scrape the bowl down to make sure all of the pudding mix gets incorporated, or you'll end up with a grainy filling.

• Add about a quarter of the container of thawed Cool Whip and mix until just incorporated.

• Gently fold in 1/3 to 1/2 of remaining Cool Whip.

• Transfer "cheesecake" filling to a Ziploc bag.  Let the mixture hang out in the fridge while you prep the strawberries.

Photo credit: Onceamomalwaysacook.blogspot.com

• Hull the strawberries.  I use a small paring knife and gently cut out the centers of each berry, being careful not to pierce the sides.  You can cut off a small portion of the tip so your berries stand up right, but they taste just as good if you don't.
• Be sure to remove enough of the hull to create a pocket that goes the length of the berry, so you get a bit of cheesecake in every bite

•   Once you've finished hulling the strawberries, grab your bag of filling from the fridge, clip off a small piece of the corner, and use the Ziploc bag to pipe the filling into the pockets you created. 

• You could stop here and enjoy these little bites of deliciousness (that just happen to be sugar and fat free) or you could melt some dark chocolate chips and drizzle a fair amount over your strawberries, making them completely wonderful Chocolate Covered Cheesecake Filled Strawberries

Random, unattributed web photo.  Because mine were gone before I could snap a pic or 2.  They're that good...

Tune in next week for some information on branding, and for a link to a special guest blog post I wrote for my favorite Etsy team :)

Oh, and just a little shameless promotion (*grins*) Be sure to stop by my Etsy shop and check out all the New Arrivals I'm adding.  There's some really cool stuff coming soon!

Happy Sales!

A Pricing Experiment Part 2

I was so excited to see the all the responses to my latest blog post!  Normally, I don't post more than once a week, but A Pricing Experiment part 1 sparked a lot of discussion, so I thought I'd come back today and expand on my last post.  There was a lot of responses, and in this post, I'd like to talk about one of the most common--competitive pricing.

But first, I really want to talk about is this question that I think everyone should be asking themselves.  It's important, because your answer is really going to determine your pricing strategy.  What is your long term goal for your business?  I'm not necessarily talking about just your Etsy shop here either.  Do you want to sell to stores?  At craft and trade shows?  In your own brick and mortar shop?

If you want to just make enough to buy more materials, because your joy comes from creating your beautiful work, that is absolutely a valid choice.  But...your pricing strategy is going to have to be a little different than someone who wants to supplement their income, or have this be the primary source of their income.

In this blog, I'm really talking about creating a financially sustainable business.  If that's not your goal, there's a chance that some of this information might not apply to you, but I encourage you to keep reading, because you never know what the future might bring.

Another thing that I think is really important to consider is something I kind of glossed over in yesterday's post, and that's the idea that you really need to develop your brand to match your price point.  Your brand is pretty much everything about your business.  Things like your item photography, your website layout, your packaging, your marketing, and your customer service; they all combine to communicate an overall image to your buyers.

This is the same product, photographed about a year apart.  Which would you expect to pay more for?

If you have a really great product, but your photos are lack-luster, you're going to have a hard time convincing people to pay that scary high price.  If you have an awesome product, and great photography, but you communicate like an 8th grader texting her bestie, you're not inspiring confidence in potential customers.  Developing your brand can take some time, just like developing your product probably took some time.  It's super important that you invest that time, create an environment that reflects the quality of the work you do.

Something that was brought up a whole bunch in the discussion thread I started over on Etsy was along the lines of "I can't do that!  Everyone else on Etsy is priced at X."  Time for a little tough love guys--stop thinking like that.  If you're trying to grow your business, make money, and eventually sell other places than Etsy, you need to break out of this bargain pricing mentality.  Even if you're only going to ever sell on Etsy, you need to stop competing on price alone. 

I talked a little in the thread about competition, so let's look at that a little more closely.  FragrantOffering512 said

"Candles are not really a unique piece of art as are the other beautiful things some of you make, so I'm not sure this would work as well for me. I used the formula and my 12 oz. candles would retail for $26, when everyone else is around $12, like mine."

She's right, if I do a quick search on Etsy for "12oz soy candles" most prices are between $10-$15.  BUT if I do a Google search for the same thing, there is a much bigger range of prices, actually anywhere from $15-$30.  That's a really big difference.  I'd also like to point out that in the Google search, almost all the candles priced under $20 had words like "deep discount", "on sale", "for less" and "cheap" on their site or in the taglines.

These candles are both pure soy hand poured 12 oz candles found on Etsy.  The one on the right charges almost twice as much, but their branding supports this price difference

Those of you doing price comparisons, ask yourself what you your brand associated with.  Do you want to be known as a discount shop?  It is perfectly okay if you do, but just know you're probably going to have to sell two times more than full priced shops to make the same amount of profit.  I'll repeat that, because it's important.  You'll have to move twice the product just to make the same amount of money as shops charging retail prices.

For those of you who are so resistant to the idea of raising your prices to full retail because your full retail price is so much higher than your competition, it's time to change your way of thinking.  The shops and people that are way under charging are not your competition.  Let that sink in for a moment.  Going back to the candles--if people are selling their candles for $12 and your candles are worth twice that, the $12 candles are not your competition.  I know, that's a confusing idea because, hey, they're selling candles too, they must be your competition. But think of it this way--Wal-Mart and Victoria's Secret both sell underwear, but they are most definitely not in competition.  There's a whole wide world out there, and the reality is, you determine who your competition is by how you set your price.

Kristen from SnowFallStudio says:

I mean no disrespect and I agree that undercharging is rampant on Etsy, but I suspect that the category of items makes a difference. People expect to pay a good amount of money for fine jewelry. It's not the same with children's toys, as I sell in my shop.

Several weeks ago, I raised my prices. Since then, sales of my bestselling item (custom mermaid doll) have plummeted and sales of my smaller, and therefore cheaper, toys have risen. Not many people are willing to pay $75-$100 for a toy.

I think she makes a good point, that your category will have some effect on what you can get away with charging, but maybe not as much as one might think.  There is definitely a limit on how much profit you can make on any given item, and that profit margin is going to vary from item to item, and category to category.

Also keep in mind that, as the makers of handmade goods, we really have our work cut out for us.  Because so many people under price their work, buyers have no real expectation of what prices should look like for handcrafted items.   Because of under pricing, buyers expect to buy at lower prices, and because buyers expect lower prices, artists and crafters are under pricing.  It's a vicious cycle that won't be broken until sellers start pricing more accurately and we really start to re-train buyers' expectations. 

If you put in the time to research other prices (both on and off Etsy), and find that your retail price is significantly above average, then it might be time to re-visit your item. 

• Take a look at your material costs--can you buy more effectively, maybe save by buying in bulk?  
• Take a look at how long it takes you to make your item--how closely are you tracking your time?  Is there a way you can work more efficiently to cut down on your labor costs?  
• What is your experience level (because that should be what's determining your hourly rate)?   
• What is your profit margin?  Remember you probably won't be making the same percentage of profit on every item.

If you taken a fine tooth comb to your costs and have reduced them as much as possible without short changing yourself, but your item is still pricing significantly higher than average, it might actually be time to reconsider that particular product.  You really have to ask yourself, if you're not breaking even, is this really a viable product?  Again, I'm speaking to those trying to run a financially sustainable business. If you're making enough to buy new materials, and that's what matters to you, keep on keepin' on :)

I think that's enough for now.  Tune in later this week for further discussion, and feel free to stop by this forum thread on Etsy to talk with other sellers and hear their thoughts and concerns.  Thanks for reading!  Happy sales!


A big thank you to everyone who participated in the Discussion Thread over on Etsy.  A very special thank you to the following shops for their contribution:
Rachels Rustic Candles
Pure And Simple Candles
Snow Fall Studio
Fragrant Offering 512

A Pricing Experiment

I just recently raised my prices.  Kind of a lot actually.  It was scary, and I really want to change things back, but I've committed myself to this experiment, and I'm going to see it through.

What am I talking about?  Well, not too long ago, I started to put some serious effort in pulling together wholesale info for my jewelry business.  Knowing that, typically, wholesale prices are about half of retail, I decided to go through my shop and see if, at my current price point, I could make money doing wholesale.  The answer?  NO, there was no way.  Not even if I set a minimum order, outsourced some components to cut down on labor costs, and found less expensive materials. Well, shoot.

It shouldn't have been much of a shock really.  People have been telling me from day 1 that my prices were too low, that I could and should charge more.  Customers.  Customers were telling me for three hundred sixty five days that they WOULD pay more for my work, and I just left my prices right where they were.  Why?  Because I was basing my prices on other prices on Etsy rather than taking the time to do the math.

Well, that's not entirely true.  I did the math early on, using the formula below, but the numbers that formula was spitting out were just insane and scary and WAYY to high.  Only...they weren't.  Even writing that right now feels weird to me, but that doesn't make it any less true.  The formula I was using is passed around and repeated on a regular basis because it's a good model.  It works for a lot of people.  It's a good way to find a starting point.

The formula that everyone kept telling me to use was this (there are about a thousand variations on this formula, but they're all basically the same):

In reality, because I was so concerned with having a competitive price on Etsy, the formula I was using was more like this:

This is madness.  Madness.  Seriously, how did I ever think this was a good idea?  By not at least paying myself for my time, and adding in some kind of profit, I was actually losing money on every item.  Yes, there was money coming in, but it was barely covering my costs.

Anyway, I've decided that how other people price their work on Etsy is no longer a factor in how I'll be pricing my work.  At least not much of one.  This may sound crazy in theory, but the reality is that people grossly under price their work on Etsy, and trying to compete with that, trying to be the lowest price, well, that only serves to devalue our brands and our products.  Not to mention that it just reinforces the bargain mentality.  And our work, our art, it shouldn't be a bargain.

Now, please don't misunderstand me here.  There is nothing wrong with basing your prices on other Etsy price points, provided Etsy (or other similar market place) is the only place you want to sell your work.  If you're content with selling on Etsy, then by all means, follow your bliss.  But if you have dreams beyond just Etsy (like wholesale, galleries, art markets, maybe a b&m shop...) your pricing has to reflect that.  I'll repeat that, because it's important.  If you have dreams beyond just Etsy, your prices need to reflect that.

Businesses need money to grow.  If you're not taking that into account, if you're not pricing for profit, if you're not making money on every piece that you sell, your business doesn't have room to grow. 

So...the experiment.  Take a look at your shop and find the five most popular items.  If you don't sell multiples, pick your 5 favorite items.  Now do the math for each.  Use real numbers...

• What's the cost of the materials you used?  What other expenses were involved?  (Expenses)
• For example, I use a special task light when I'm working that gets something like 1,000 hours to a bulb (not really, but for math purposes, we'll pretend).  The bulb cost me $40, so it costs about $0.04 cents an hour to use that bulb.  Four cents really doesn't seem like much, but let's say I work 10,000 hours, and have to buy 10 bulbs--that's $400.  Sure it might be spread out over 2-3 years, but it's still four hundred bucks.  If you're not building that cost into your business, it's money you're losing.
• How long did it take you to make it? (Labor 1)
• Seriously, don't skimp here.  Did it take you 6 hours?  11?  35? 
• If it took you X number of hours, is it because it was a new technique you were just learning?  Were you working slowly because you were distracted?  How accurate is the time?  Are you starting and stopping?  The answer to these questions is important when determining the next figure.
• What hourly wage do you deserve? (Labor 2)
• Don't be cheap here guys--pay yourself a real world wage.  Are you just starting out or do you have 5 years experience?  You should be paying yourself more than minimum wage here.
•  Don't forget about profit.  Labor costs and profit are not the same thing!  Figuring this out is tricky, because it's hard to know what you should be making for profit.  
• Remember, this is the money that helps you grow, that you can invest back into your business, that you can put into savings.  How much money do you want to make?  Be honest with yourself.  And be fair to yourself.  What is the item worth to you?  (If you're really struggling here, use $5 as your profit number.  It won't really give you as accurate of a picture, but at least it's something.)

Okay, now let's plug these numbers into the formula.

 That's your wholesale price.

Now for the scary part.

Double it.  Take your wholesale price and multiply it by 2.  That is your retail price.  How close is it to your actual price?  If it's really close (say +/- $5), then good for you, you're pricing fairly well.  If it's way higher than you current prices, then I really encourage you to participate in this experiment.

Those 5 items you picked out (the 5 most popular, or your favorite 5)?  Raise their prices to the price from the formula.  If you're anything like me, your heart just skipped a beat, and your first instinct was to dismiss this idea out of hand.  Don't.  Give it a try.  You deserve to get paid for your work.  You deserve to make money from what you're doing.  You work hard, you create awesome things.  Own that.  Be proud of it.  Don't feel guilty for telling yourself you deserve it.  Don't feel guilty for making money.

And for goodness sake, DO NOT go compare your new prices with anything else on Etsy (or Artfire, or E-bay, etc.)  There is nothing wrong with any of these places, but something like 89% of sellers in these markets are under pricing their work.  If you try to match their prices, you'll just be perpetuating the cycle. 

I know that new price you just came up with is scary and expensive and uncomfortable.  Do it anyway.  You can always lower your price back down at the end of the experiment.  The end of the experiment, by the way, should be no less than 3 weeks from when you raise your prices up.  Longer is better, it will give you a more accurate picture of how this new price point works for you.  At the end of the experiment, if the new, higher price isn't working for you, you can lower your prices, but don't just drop them back down to what they were.  Experiment a little bit, and find that sweet spot.

Remember not to judge the success of this experiment on the number of sales you have at the higher price point.  Instead, base your judgement on how much profit you made.  If you made a larger profit, then your experiment was likely successful. 

Feel free to leave a comment.  What scares you most about raising your prices?  Do you talk about prices with other artists/crafters?  Do you make a profit at your current prices?  I'd love it if people came back in a few weeks and shared their progress!

Also, feel free to stop by this Etsy thread and join in the conversation: A Pricing Experiment

For more reading and other great information, be sure to check out the links below!
The Art of Pricing for Profit
Etsy Success Pricing for Profit Workshop
Everything ever written/shared by Megan Auman (seriously, this lady has some seriously great info to share)
The Etsy Seller Handbook

Don't forget to check out Part Two, found here:
A Pricing Experiment Part 2