I posted these earrings in an earlier blog post and received some great comments. I always appreciate my commentators!
Interestingly is that a couple comments mentioned that it's a steal. One even suggested the earrings would sell quicker for me if I raised my price from the listed $8.00.
This is where I need input from my readers. How do you feel about prices of items that interest you? Do you avoid prices you may feel are low? Would you be more interested in buying those earrings if they were priced at $10? $15?? $20???
Because I'm able to buy wholesale, the materials used to make this pair of earrings cost me $1.75. It cost me $.20 to list in my Etsy shop. If and when they sell on Etsy, I'll pay a total of 7% in commissions totalling $.56. That brings my cost of goods sold to $2.51. That's a gross profit of $5.49. The overhead that normally comes into the accounting play is extremely negligible because I work from the home. The percentage of overhead "spent" directly on this small pair of earrings is too tiny to account, but for the sake of argument and a nice round number to work with, let's give it a value of $.49 which also includes self-employment taxes. Profit is now $5.00 which pays for my time spent making the earrings. The earrings took 2 minutes to fashion (I've been doing this for years, speed comes with experience). That would give me the equivalent pay of $150/hour!
Not a bad wage, huh? Yet this well-meaning critique that my prices are too low has come to me from more than one place. "Under pricing" is a frequent topic on the Etsy forums. So now I'm asking you, dear reader, should I raise my prices?
Do you personally want to pay $13 for something when the designer is offering it to you for $8 while still making a comfortable profit margin?
When I started making my own line of jewelry, I had it in mind to have a Mission Statement for my business. I've never put it in writing, so I guess I'll do so now.
The Mission of '57 Design Studio is to provide quality handcrafted jewelry made of quality materials direct to the customer at prices that are friendly to the budget.
However, I would really like my business to succeed so I'm beginning to feel the pressure to raise prices, even in an economy that is on a roller-coaster of confidence. To be honest, I've already increased my prices ... two years ago I would have priced those earrings at $5.00.
As for the necklace, that IS a steal. That pea-pickin' thing took me three hours, but I seriously doubt anybody would pay $528 for a piece that is basically costume jewelry (no semi-precious material was used so I can't classify it as "bridge").
I welcome and appreciate any and all input. If someone would kindly Stumble this post, I'd appreciate that, too, since I'd like to get input from a variety of sources. I'm too "shy" to Stumble my own post!
Oh, and has anybody else been glued to a financial news network these past few days? I think I'm happy to hear of the possibility of mutual funds being insured by the government, especially since the major insurer of securities has defaulted and is in the process of being bailed out only to get sliced up into a gazillion pieces.
No short sells for 30 days, that's interesting too. I was wishing I had some spare change yesterday when the market opened with a huge plunge. Not only did it end on an up note, it opened up and is currently soaring. Time to raise 6 flags over Wall Street!