Whenever I give a pricing talk, someone always balks about raising their prices.
“I want my work to be affordable or accessible,” they say.
Having universally low prices does not make your work affordable. In fact, it can actually have the opposite effect. It’s the quickest route to burn out, and your products aren’t accessible if you go out of business.
The key to making your products accessible is to have a range of prices.
In my experience working with makers, I’ve found that most do not have a big enough range in their prices.
Look at your own product line up. What is your most expensive piece? What is your least expensive? Chances are, the gap is relatively small.
My jewelry ranges in price from $45 to $600. That’s a pretty big range, and I’ve got lots of price options in between. Pieces in the lower end of the price range give customers a lower entry point into my line, while higher end pieces provide a bigger profit margin (for me) and give customers something to aspire to.
In addition to just having a range of prices, a good line should hit these three types of products – gateway, aspirational, and up-sell.
Gateway products are the products that get most customers into your line. They aren’t necessarily your least expensive product, but they are towards the lower end of your pricing.
The perfect example of a gateway product is my Audrey necklace. For many women, my jewelry is bigger and bolder than anything they currently own. They like the look, but they aren’t sure they can pull it off. The Audrey necklace serves as the gateway to the line – something easier to wear and less expensive, requiring less commitment all around.
Aspirational products are your big ticket items. These are the products at the higher end of your price range and typically the products with the biggest impact. These are the products your customers adds to their wish list (or their Pinterest board) and dreams of owning someday.
My Maya necklace is the ideal aspirational piece. It makes a big impact and it’s the kind of necklace woman dream about wearing. But at $380, it’s also not an impulse buy for most people. It’s the necklace that gets shared and talked about and purchased, when the time is right.
Up-sell products are products that you can add on to an existing sale to get to a higher dollar amount. If you sell wholesale, up-sell is a favorite word among buyers. That’s because stores are always looking to improve their ADS. (That’s average dollars per sale.) An up-sell takes place after a customer has already committed to making an initial purchase. Up-sell items tend to be at the lower end of your price range, but, just as with gateway pieces, aren’t always the lowest priced items.
Many of the earrings in my line serve as an up-sell piece when a customer buys a necklace. Since my necklaces are made from less common materials, buyers are looking for an earring that can easily pair with their new necklace.
If your line is missing any of these items, you’re likely losing out. Giving customers an entry into your line while also giving them something to aspire to means you can have the double benefit of keeping your line accessible while also hitting a higher price and a higher profit margin that can help your business grow.
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Looking to develop a solid pricing strategy? Confused at how to go about raising prices? Or even how to set your prices in the first place? My digital workshop, Pricing for Profit, is completely revamped , with more information than ever on profit, pricing, value, and customer perception. Click here for more details!