Hey Thrivers, Jess here! This post is Part 2 in a 3-Part guest series by Cassie Lee – Street Smart Pricing. If you missed it, you can read Part 1 here.
Congratulations! You have done your homework from last week about correctly setting the price of your product.
You streamlined your production process, minimised waste resources, took advantage of supplier discounts and double, (ok, make that triple), checked your calculations. You arrived at a price which you believe most accurately reflects the amount of work that goes into your product.
Despite doing all the leg work and spending hours setting the best price for your products, you still lack the confidence to shout it from the rooftops.
A fear began to creep up on you – what if no one is willing to pay your asking price?
This is one of the most common fears faced by new business owners. Not to say that those who have been selling for many years do not have this fear in them, but I believe that their experience makes them handle the fear easier and overcome it quicker.
Pro Tip: One thing you should not do when you feel this fear is to regularly offer discounts as a way to encourage others to buy from you.
Doing the occasional promotion or anniversary sale is a great way to reach to new customers and entice them to try your product, or reward your long term customers. Do it one too many times, you are sending a signal that your prices are artificially set at the higher end in order to be manipulated in one of your marketing campaigns.
Let’s manage this fear wisely by using one or even a combination of tactics below.
Arm yourself with knowledge
Have you researched how your type of product is being priced in the marketplace?
Whether you head over to the big online handmade marketplaces such as Etsy or Madeit or visit more than a few local arts and crafts markets, you either get a range of prices or nothing at all.
Match your product to the closest one in the market in terms of design, features, overall look, etc. This will give you an idea on whether the price tag you put on your product is within range.
I always like to advise that if your price is slightly on the higher end, leave it. If you are at the lower end of the pricing scale, then adjust it upwards. The reason behind it is so you can strategically offer price discounts occasionally without sacrificing too much on your end profit.
Know your product intimately
You may be the maker but are you able to identify your reasons for creating your masterpiece?
Is it to solve a common problem? Are your customers asking for it? Is it to satisfy a creative urge?
Believe in your product and its value. Deliver the message about your product’s benefits to your customers. Your confidence in your product will influence your customer’s view on the price tag. Low self-confidence or the inability to communicate the benefits of your product will only amplify your fear that your product is not worth the price.
Be prepared for any reaction
Our fears are generally heightened because of the unknown.
You have set a price for your product. Which way could it go? You will either get it right and people pay without questioning, OR you get it wrong and the product is still sitting on your shelf collecting dust bunnies.
The negative reaction is what every seller fears. What do you do next? If you are not sure about the price, go back and review last week’s lesson.
Perhaps adjust your prices slightly and see if it makes a difference. Sometimes one or two small tweaks are all you need to get the pricing right. By having an action plan ready if your fear becomes a reality is an essential tool in helping you to manage that fear.
Dress the part
When you wish to command a certain price point, make sure all other elements in your business tie in with that price point.
Elements including storefront image, styling and photography, storyline, product quality and customer service must speak in a cohesive language. Jess has suggested visiting your own store as if you are a customer or a stranger. Look around and see if everything ‘fits’.
Another method I like to suggest is to get a friend of a friend to visit your store. Tell your friend not to hint that you are the store owner because you don’t want that knowledge to influence any feedback the other friend may have. You will pick up vital clues as to whether the prices you set are in line with your overall image by asking questions such as “Will you pay this price?” or “Did you expect to come across these sort of prices based on the look of the shop?”.
Over to You
How confident are you with your prices? Do you have another way to better manage the fear of whether anyone will pay your asking price?
Grab a copy of her free Ebook (This site/resource is no longer available) “You are What You Think” as the first step towards developing your ideal mindset for some serious action taking.