Many handmade sellers are worried about pricing their crafts too high and would scare away potential customers.
The chance is, the prices that they are charging are too low, which can lead to several problems:
Problems Of Pricing Your Crafts Too Low
Low Margins And Profit
If your margin is too slim, your business will not be sustainable in the long-run.
Inviting Price Competition From Other Sellers
Overtime, they may charge lower prices to compete with you which make you lose your price advantage instantly
Inability To Run Sales
If your margin is too small, you wouldn’t be able to run sales in holiday seasons or in general. It can seriously hurt your shop’s growth and overall profitability.
Comparison To Mass Produced Goods
Mass produced goods that are sold on Etsy usually charge a lower price compared to handmade products. If you charge a similarly low price, you would draw unwanted comparison to your handmade products.
Low Prices Don’t Necessarily Mean More Sales
Customers perceive low price with low value. This is why:
Price Is Part Of Perception Of Quality
For shoppers, price can indicate the product quality.
In any markets, including Etsy, the information is not perfect. There are uncertainty of what they will get from their purchase. For example, difference in material, colour, unknown actual shipping time, etc. Although reviews on Etsy can help, shoppers still don’t have perfect information.
Because of that, shoppers use price as one of the indicators to determine quality.
Generally speaking, in most situation, higher quality products are more expensive. If you pay more, you should get a product that lasts longer, uses premium materials, etc.
So for you, if you can convince your target customers that your product is superior and can bring value/benefits to them, you will be able to charge a higher price.
From my experience, it’s not a case of the prices being “too expensive” for handmade sellers, but a case of not communicating the value of their handmade products correctly.
Let’s look at ways that you can increase the value of your product which allows you to charge a higher price while getting more sales.