Quick Tip #17 - Another Thought on Prices

Often I see sellers saying that they aren't making much on their products because they think if they raise their prices they will lose sales. Here's something to think about:

If you have a product priced at $5 with a profit margin of $2 and you sell 10 of them your profit is only $20. If you increase the price to 10 your profit margin is now $7 and if you only sell 5 your profit is now $35.

Now this is only talking in terms of numbers, there is a psychological effect involved in prices. Higher prices imply higher quality, by underpricing your work you can give the impression that it's cheaply made which can hurt your business. If you want a pair of shoes that won't fall apart in 3 months do you buy a $15 pair or a $60 pair?


Previous Posts on Pricing:
Breaking Down Your Costs

Link Roundup for Thanksgiving Week

Between preparing Thanksgiving and the whole Black Friday/Cyber Monday hoopla it's rather crazy so no normal posts this week. However not wanting to leave you with nothing here's some useful links for you.

• Etsy Seller How-To: Get Involved With Black Friday and Cyber Monday Promotions
• Handmade News: The Black Friday/Cyber Monday Weekend Sale ArtFire, The MyEtsy Facebook Application, And Coupon Codes at Zibbet
• Sellers Assisting Sellers Blog:  How to use a light box and photo editing software to make beautiful photographs
  

Quick Tip #16 - Holiday Shipping Deadlines

Here are links to the shipping deadline calendars for the USPS, UPS, and FedEx. Use them to figure out when the last day you can take orders for the holidays to post on your site, blog, and/or shop.

• USPS Holiday Calendar
• FedEx US Holidays Last Day to Ship
• UPS year-end holiday service center

Thought for today

My business in a way comes directly from being poor growing up. I turned to making stuff and drawing because craft supplies were cheaper than toys. You could always find craft kits at yard sales that people got and never got around to making. Fixing my toys when they broke because my parents couldn't afford to replace them. This is all well in the past, my parents worked hard and dragged us into the middle class bit by bit.

I don't say this to make anyone feel sorry for me. I'm well past feeling sorry for myself, just looking back and seeing how it affected my life. Our experiences shape our lives and sometimes we don't realize how until years later when you see something that brings it into focus.

This was all brought up by this blog post by John Scalzi: Being Poor

Quick Tip #15 - Nifty New Etsy Tool

The My Etsy facebook app puts a cool tab on your Facebook profile or fan page. It also happens to look really great, almost exactly like the front page of your shop.

One little note: When adding the tab to your profile or fan page you may not see it in the drop down box but if you type in MyEtsy in the little search at the bottom it will bring it up.

Weekly Inspiration

I'm having bad luck lately with accidentally posting. I thought I posted the Weekly Inspiration yesterday and actually put it on my other blog by mistake (they are both linked to Flickr). So here it is a little bit late.

chocolate pearl, citrine, quartz and copper necklace, originally uploaded by citydetails.

Submit your photos for consideration as a Weekly Inspiration by adding them to the Flickr Group.

Breaking Down Your Costs

Oops! This was supposed to be Wednesday's post but I accidentally published it early when I wanted to schedule it. There will be a short post on Wednesday instead.

How much are you really making from your work? Sometimes we don't honestly exaluate our costs by leaving off some of the costs.

A common pricing system that I see is Materials + Time = Wholesale x2 = Retail but I think this formula is flawed because it doesn't take into account other costs such as shipping materials, other costs, and fees.

I use a formula of Materials + Time + 15% = Base Wholesale x2 = Base Retail however because of shipping and fees from etsy and paypal it becomes more complicated after this. I add the total cost of shipping which is postage and shipping materials. Base Retail + Shipping Costs = Total Cost This number is what I WANT to receive after fees.

Note: I actually have a sliding scale for wholesale depending on order size but 200% is what I use for calculating the retail price.

Now Etsy and Paypal do fees different, Etsy doesn't charge fees on shipping while Paypal does but for simplicity I'm just going to assume they both charge on the total amount.

Etsy fees: $0.20 + 3.5%
Paypal fees: $0.30 + 2.9%

If you are interested in the math here it is (skip to the bottom if you're not)

Total Cost = C
Total price I need to charge = P
C+[$0.30+(2.9%P)]+[$0.20+(3.5%P)]=P
C+[$0.30+(.029P)]+[$0.20+(.035P)]=P
C+$0.50+.064P=P
C+$0.50=P-.064P
C+$0.50=.936P
(C+$0.50)/0.936=P

So if the amount I need to make is $28 I need to charge ($28+$0.50)/.936=30.45
Total Price - Shipping Costs = Online Retail

I've put this information into a spreadsheet on Google Docs with an imaginary item entered into it. You can download it in Excel or Open Office format and edit it with your own numbers.

Weekly Inspiration

Love the earthy colors.

If you want to get featured as a Weekly Inspiration add your photos to the Flickr Group.

Silk screened linen napkin, originally uploaded by émili.

Video Pick - Writing Better Ads

Here's a quick little video from google on improving your ads.



Sorry I don't have a longer post for you guys this week. I'm feeling sick and wasn't able to get the post I had planned done.