Please welcome the fabulous Megan Auman – jeweller, business strategist, artist, designer, brilliant entrepreneur, and my lovely friend. Megan is going to be stopping by every other month to answer three of your burning questions – think of her a little like a whip-smart, no-nonsense business advice columnist.
Take it away, Megan…
1. I have a question about pricing. I’m working on a prototype of my first product and trying to be very careful to record time, materials, etc. as I go (having learned from experience with an Etsy store several years ago). I think this product will take about 3 hours of labor, plus materials ($2-4). So according to your formula, if I “pay” myself $10/hour, my wholesale price would be around $66, making retail $132. That seems like a lot, especially b/c there are folks on Etsy selling similar products for as low as $8!! The highest price I saw on Etsy was $65. I’m in the US, by the way.So I’m wondering if my idea can even work.
First off, your equation is actually missing two key pieces in your pricing (though I am happy to see that you’re pricing for both wholesale and retail). In addition to materials and labor, you need to include both overhead (this is all the additional expense it takes to run your business, like equipment, studio space, etc.) and profit into your wholesale price.
But the bigger issue here is that Etsy is not a reliable benchmark when it comes to comparison pricing. Etsy has established itself as a low-end marketplace, as the majority of sellers on Etsy are not trying to make a profit off what they sell. Many aren’t even priced to pay themselves a living wage.
Instead, you want to head off Etsy to look for other pricing. I always suggest looking for the highest price you can find for a similar item. While you may not end up pricing that high, finding the highest price lets you know what the upper potential of the market is. It will tell you if there is a market to support the price you’ve found you need to charge to make a living.
From there, it’s just a matter of making sure your web presence, branding, and all the other details of your business are in line to support your pricing!
2. I’m thinking of doing one in 2014, although I know nothing about trade shows! I have never been to a trade show before as they are not normally held in my city. If you have done one before, do you have any insights that may be of help? How do I need to prepare?
There’s a lot that goes into prepping for a trade show, and if you’ve never done one before, one of the best things to do is plan on attending one prior to exhibiting. Even if one isn’t held in your city, it’s worth it to travel to see one, because you’ll get a much better sense of what to expect.
Walking a trade show can help you understand all that goes into booth design, promotional materials, line sheets, and catalogs, and just to see the general vibe and atmosphere of a show. Because shows are only open to the trade, it can be tricky to get a pass to attend a show. Often, if you try and go through registration, you’ll be asked to pay a hefty fee to attend as a “non-exhibiting manufacturer.” Instead, the trick is to reach out directly to the sales staff. They are the people who are responsible for filling booth space, and if you let them know you’re interested in exhibiting in the future, they will often give you a pass to attend as a “guest of sales” for free.
Once you’ve walked a show, then you can begin to make a checklist of everything you’ll need for a show – your booth display, lighting, line sheets, orders forms, promotional materials, and of course, a well thought out and cohesive product line. Everything you need to prepare for a show is more than I can cover in the scope of this column, but if you tune in to Creative Live
on June 19
, 20, and 21, I’ll be giving a free webinar
on how to get your products into stores and sharing all the details of how to prep for a trade show.
3. I’m really interested in getting my newest product featured in a magazine for Christmas shopping. How far in advance do I need to reach out to the editors?
Your timing for this question is perfect, because you’ll need to start reaching out to magazine editors in the next couple of months if you’d like to see your products featured for holiday shopping. A general rule of thumb is that you’ll want to reach out by July, but if you have a particular magazine or magazines in mind that you’d like to target (and you should) you can get much more detailed dates.
You can find out just when you’ll need to submit products by Googling the magazine name and the words “media kit.” This should take you to an online page or PDF that the magazine puts out to help sell ad space. But it’s useful for you because it also includes an editorial calendar with deadlines for future issues. Once you’ve found the month of the issue you’d like to be included in, take a look at the deadlines spelled out. You don’t want to go with the last deadline. (That’s the very last chance for ads to go in before the magazine goes to print, and editorial content will be wrapped up long before that.) Instead, see what the earliest deadline for that issue is, and plan on pitching your products at least a few weeks before that!
Got a question for Megan Auman?
Leave it in the comments below or email it to firstname.lastname@example.org (that’s direct to Megan Eckman, Assistant Editor).