In the midst of all of these “for sale” blog postings, I thought I should get a discussion going on a topic of interest to us all. So here goes:
Despite historically low inflation, the Consumer Price Index (CPI-U) has increased by 18% in the last ten years (from 207.3 to 244.3). Have you increased your prices by 18% as well? If not, why not?
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Robert Wallis - those were the exact words I used this past weekend at a "craft" show. Lowering prices did not increase sales. I say craft show because I do a few around the holidays and had my sister with me and she was getting all upset because the sales were not there...and I had to remind her - no matter what price her items were at - there were still little to no customers attending. She was not going to sell any "more" just because she suddenly had the price lowered. Calmed her down. And then the sales picked up the last hour again. I have one line I do not create myself that is 100% USA made, and I am not a third party or home party seller either - I am the area rep for them...and I am allowed to sell the line at many craft shows. And, so I do. But, without that line at many of my shows, because sales of my type of handmade goods have fallen flat (due to the wholesalers selling the base goods to anyone who meets their ridiculously low minimum - they have flooded the internet with similar but not high quality goods)...so I have to make up for the loss somehow, and still continue to supply to my established customers who are very price sensitive. I feel like I am in a no win situation at the moment so trying really hard to get more into the finished goods high-end side so I can sell those products at the shows that vet and have the customer who looks for and purchases my high end line I have put on hold for too many years. I guess the bottom line is diversity in my area - textiles is key for me.
I built and sold my first full flower carved saddle in 1962 for $325, top price at the time. I was 18 and three years into my apprenticeship. That same saddle today would sell for over $6,000. If something wasn't selling, rather than lower the price I raised it. There is something about perceived value with wealthy people IMO. I have raised prices over the last 55 years as material and my labor costs increased. LOL, On our road trip in Septrember, I saw that an auto mechanic in Indiana was charging $75/hour labor. I have always told my apprentices to charge what mechanics make. There are fewer of us than them, and we have just as much invested in tools and education. I will have to take my own advice and bump mine up $5/hour more in 2018.
I have raised prices accordingly on lower priced items with $35 being the low end for an image printed on 8.5x11 paper just shrinkwrapped with Cetificiate of Authenticity and foamcore backing. I sell repros that I make and shrink myself at $35, $59, $89, and $125 mostly. I don't know if raising the $35 price will work since it's easy for someone to pull out two $20's. Maybe if I did raise that price point it will be just as easy for them to pull out a $50. I dunno. Are people carrying $50's? I know they have debit cards. But I can often sell two prints at a time, either at full price or for a little deal on the second one if I think a deal needs to be made to close the sale of two prints together.
But what's helped me is hitting a price point where before I didn't have any product to sell. I am making new things that I'm selling from $150 (matted only) to $450 (hand made frame that I gild with karat gold leaf), and they're selling. When I started this, I priced the framed ones at $650, but that didn't work well because they weren't big enough. I'm developing some slightly bigger ones now to get that $650 or $750 or better. $895? We'll see.
Before last year I rarely had something in that price range. I know that's strange for an art fair artist. Our small originals are still usually $1,250., and they find buyers in the same amount of time as usual. I'm selling higher priced items, too. Same story for them finding buyers. My main target is the original fine art collector. The lesser expensive stuff is more product oriented.
My low end pieces went from $45 to $$80-$90, $75 to $125, and $180 to $250. However, the pieces that I were selling regularly at $500-$600 are now $450 to $480 and the $750-$775 pieces are now $600 to $650. When I raise my prices back to the pre 2008 recession prices, they just sit there.
I woke up this morning wondering what the inflation data shows for the specific product category that includes our art and crafts. What I found is very informative, but also very depressing. So do not read any further if you are not up to dealing with some really bad news.
The sub-category of the CPI that art and crafts probably fit into is called “Clocks, lamps, and decorator items”. Here is a graph of annual inflation rates for that category: http://www.in2013dollars.com/Clocks,-lamps,-and-decorator-items/price-inflation/1995 . Using the data from that page, prices have deflated by 44% in the last 10 years for products in this category! Obviously, this statistical category is mostly if not entirely driven by big-box stores importing Chinese goods, and not our art and crafts. But still – it shows what we are up against.
Definitely are price points. I had some $25 bottom price items and didn't sell many. I reduced it to $19 and sold. Same for $60 to $49 and $115 to $99. Like Robert says $20, $50 and $100 price points. My material cost is 10% at most. Therefore my $/hr went down from about $22/hr to $17/hr for some things.. I think that if you are in business that keeping track of your time is important. Your love of what you are creating or working for $5/hr does not put food on the table.
My bottom price items are still $20. When I started in 1988, I had 8x10 pieces in small metal frames for $20. Nowadays, those pieces are digitally matted with a backer and no frame. I tried raising and lowering prices; higher prices and lower sales; lower prices didn't increase sales. It seems there are natural price points, $50 and $95, are a couple of others that the pieces are tailored around.
Not really, but I'm still struggling with finding my niche market and just selling as much as I can at the current price points. Once I become more established in this area, I might adjust the prices on some items accordingly. Thanks for introducing this topic, Reid.
I have been in this business only since 2013. Even in that short time I know the cost of living has gone up but how much? I don't know.
I went up on the price of my longest running item, tumbled travertine coasters early in doing them. My original price was $12/set of 4. In about a year's time I went up to $28/set of 4. My costs for this product are low but at $12/set I was undervaluing my work and product. I have set the price where it's appropriate for the product including my time.
Now my other products, painted home decor and furniture ... that is another story. I value it but other want handcrafted pieces at Walmart prices, still in this day and age. I set it where I value it, including what I paid for it and have invested in it with time and paint. I do allow some wiggle room to negotiate.
Overall though, I have a hard time raising prices when the economy is still struggling here where we live.
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