Sales Slow Down? Raise Your Prices

When sales slow, as they often do after the holidays are over, we often revert to the knee-jerk reaction of running a sale to encourage buyers to buy. But that mentality could do you more harm than good in the long run. And let's face it, fast cash is nice, but you should be in this for the longer haul.

Let me say here that there are perfectly good reasons to run a sale that have nothing to do with purchasing panic. The best reason is to clear out old inventory that is taking up room on your shelf or in your brain. It could be that you made too many of an item and you're tired of looking at them. Or you made a mistake - that shrimp scented candle seemed like a good idea at the time but now. . .

If the only reason you're putting items on sale is with the hope that it will increase your income for the month, try this instead: increase your prices. Yes, really. Have you seen the famous example of the same bracelet in a plain box vs in a box from Tiffany's? Imagine if the bracelet in the Tiffany's box was priced at $5. You'd think it was a fake. A trick! $50, that's more like it. $500, now you're talking.

You aren't Tiffany's so $500 may be reaching but it all falls under the category of implied value. If you don't value your items enough to price them higher, why should your buyer.

Obviously, there's a limit to this thinking. People aren't going to pay $25 for a page of stickers, no matter how cute they are. But if $25 gets you a sticker bundle with a bonus you can only get in the bundle, that's added value that will convince some buyers to pass on the $2.00 sheet and buy the set.

If four people buy the $25 set, that's $100. It takes 50 people buying a $2.00 sheet to make the same money.

Ready to make more for what you make? Here are some tips that will put you in a better position to raise, not lower your prices:

  • Stay original.  Keep inventing new products and techniques.  Keep your customers coming back to see what is new.
  • Differentiate yourself with quality and craftsmanship.  Using better materials and methodology warrant higher prices.  This allows you to promote the quality of your products.  People will pay for quality! 
  • Run your business like a business.  Deal with customers professionally.  Get orders out quickly, respond to questions promptly, handle any problems considerately and you will have repeat, loyal customers.
  • Diversify your business by expanding your sales channels.  You may consider consigning and/or wholesaling.  This is additional revenue that the hobbyists don't consider.  It really gives you the chance to create more opportunities for yourself outside of the online marketplace.
  • Get your own website and stop competing.  In a marketplace, you are competing with others on the same site.  Instead of using a marketplace shop for your goods, a free blog for your posts and a photo sharing site, show the public you mean business by establishing a branding website that is all you. 

There is absolutely nothing wrong with making crafts for fun and a little extra spending money.  But for those that are trying to run a business, stay the course. While immediate sales are gratifying, you should focus on ways to make a long-lasting career from your products.  Keep pricing your products where they need to be and don’t focus on what other people are charging. 

2020 Goal: Raise prices on all of your items a few cents and see if that affects sales negatively or positively or not at all. You can always roll them back but until then, you could be losing money you deserve.

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