Pricing for a Profitable business

Do you have a "proper" business where you are:                     

• Registered self-employed
• Registered with the HMRC for tax
• have to do your own bookwork 
• account for EVERY cost
  
  If this IS you - You NEED to make a PROFIT to survive, not just a WAGE!
  
  I watched a video on Etsy the other day on Pricing for Profit.
  This is the link if you'd like to watch it, just to warn you - it's quite long!!
  http://www.etsy.com/blog/en/2012/etsy-success-the-art-of-pricing-for-profit-workshop/

I thought it was a great way to explain it, so I'll try and condense it to make it easier.
This is the way they suggest and it's soooo easy...

1. Put in a figure of how much profit you would like to make -
YES REALLY!! £5, £10, £20???

2. You need to work out how much your materials cost you.
Include EVERY bit no matter how small as you have had to pay for them and add in the postage you had to pay to get it to you - plus a little for your overheads.

OVERHEADS?
Even if you're working from home, you might use e.g. electric for heat/printing, ink/glues - you get the picture...

3. This is the easy bit - How much do you want to be paid per hour? Be honest (& realistic!)
If you're a designer/crafter like me, up until now, you've probably sold yourself short!

Add up the total of all three of the above.
** This gives you your WHOLESALE PRICE.

** Double it and you get the RETAIL PRICE.

I can almost hear you gasp from here!!

Remember, just because you can't afford it, or think it's expensive, others won't!
It's all about perceived value.
Make sure you describe:  the materials in detail, how you made it, why you made it, what inspired you, if it took ages - say so, if it's a one-off - say so.
It all adds to the story of the item and makes it unique   

WHY SO MUCH??
If you're happy to sell at Wholesale prices then that's up to you, but what if you get your "big break" and a shop wants to stock your goods??
They will immediately cut it in half
(as it's your RETAIL price they think they're looking at)
which takes them back to the WHOLESALE price.

You can just about guarantee they will still try and knock off some more from there - so it's something to bear in mind.

Hope this makes it all a little clearer for you.....


You can find some of my designs over at www.raspberryjewellery.co.uk
They are unique, original and made with lots of attention to detail - go take a peek...

Angie x

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