Pricing II: Comparing your price to the others’
Should you be comparing your price to the others?
My answer is, yes but only as a market research. Do not adjust (especially lower) your price JUST BECAUSE of someone else’s price.
1. “But somebody is charging a lot lower than mine, and I am afraid of losing customers!”
There are many reasons that the other seller’s price is lower. The material or shipping cost could be lower in that area, or the person could be undercharging.
If your price is the best you can do in terms of material and shipping cost (I will post about this later), and if you are charging yourself fairly, then you should ignore the other price and move on.
Don’t worry about losing customers. Price shouldn’t be the point of attraction for your products. If so, they will go to another seller if the item is cheaper there. You cannot, and should not compete with price. Customers will buy your products if yours have something unique that others do not have. Even if it is a small difference, people will notice it and be willing to pay for it.
For example, when I first decided to sell kraft gift tags, I found way too many similar ones that are a LOT cheaper on Etsy.
My Kraft brown gift tags, one of Gracium’s bestsellers
I almost thought about giving up. There was no way that I could match their price. Being a Canadian seller, my material and shipping cost was higher to begin with.
I put it on anyway, and I was pleasantly surprised that when people started to by them. People from the USA bought my tags despite the higher price and longer shipping time. Some loved my scalloped tag shape, some liked the flowy script text with tails. The tiniest details made the difference. It soon became the bestseller, playing a huge part in making Gracium grow.
Believe in your details. Do not underestimate your work.
2. “I see somebody charging a lot more for a similar item. Should I raise my price?”
If most of the other sellers are charging a lot more than what you do, there is a chance that you are undercharging. Are there any pricing factors that you are missing? (ex. travel time and expense to the shipping courier, packaging materials, Etsy fee etc.) Are you paying yourself fairly for the labor? Did you remember to ADD PROFIT on top of everything?
If some of the sellers are charging higher for a very similar item, there could be various reasons. They may have employees to pay. The material and shipping could be higher in the area. They may have to pay for office space.
It could also be the case that the item is actually different than yours. For example, they might allow full customization that you don’t offer. Maybe their processing time is faster. Maybe they add more packaging details.
“Pricing is still too vague!”
Being a creative maker, I tend to think pricing intuitively. Pricing never was a clear-cut subject to me, and still is challenging.
Next time, I will share one of the biggest pricing mistake I made.
See you then!
Grace
