5 Pricing Mistakes that Cost You More than Just Money

Pricing your woodturnings is a real challenge because pricing mistakes not only cost you money but they affect the character and nature of your woodturning business as well.  Here are 5 pricing mistakes to avoid when presenting your products for sale.

One of the most common problems I hear from new woodturners is that they have no idea what price to put on their turnings.  This typically happens when a co-worker sees your turned pens and would like to buy one.  Or you give a present to a family member and one of their friends would like one as well.  The business aspect of woodturning usually sneaks up on you rather than being up front at the beginning.  A quick response leads to pricing mistakes.

Now pricing your product is a challenge.  Here are some other articles to help you through this decision.  What should be included in your price is here “Pricing: Nuts and Bolts”.  What to sell can also be a question, that is “what will sell”?

Now that you have determined a price let’s take a look at five common pricing mistakes.

I did a poll in my Facebook group, Woodturning Entrepreneur.  I asked the group if they had made any of these pricing mistakes.  The winner, by far, was setting the price on the product too low.  Two similar mistakes were forgetting about labor and taxes when setting the initial price.

1. Setting the price too low

This problem has two main parts.  First the value of your product should be reflected in the price you charge.  If you value your product too low then your customers will not see value in it either.  This could also be a money mindset issue that you have.  Here’s more on that subject.

One woodturner commented that he found a fellow turner at a craft fair.  His prices were around $ 25 to $ 30 for his bowls and not making very many sales.  This was quite discouraging.  He suggested to the vendor that he triple all of his prices.  The vendor followed his advice by increasing his prices and the surprising result was that he sold out of all his bowls.

The second part is that if you do sell too low then you are not making a good return on your product.  You have time, materials, and your own profit to consider.  The reality is this:  You are not a big box store, and you are NOT competing with them.  You are an artisan and you make your sales based on your skills and workmanship.  So do not sell yourself short.  You need to recoup the costs of your business and a bit more in order to stay in business.

2. Pricing to match the competition

I often hear that the challenge of woodturners entering craft shows or selling their wares on-line is that they have to price their products to match the competition.  Your price is your decision.  You do not have to match anybody’s prices.  Trying to match prices will limit your relationship with your customer and actually lower the amount of money that you would be able to make.

As an artisan you have three very distinct competitors.  Each is a challenge and you must determine a price response appropriate for each one.  Let’s look at them in more detail.

• The Big Box Stores

Turning a beautiful wooden bowl takes time and skill as a woodturner.  You are not working a set of duplicating lathes that produce identical bowls over and over again.  Nor are you making perfectly matched sets of stacking salad bowls.  You are making unique, hand crafted, wood turned bowls.  Enjoy what you do but realize that you are not trying to out produce the big box stores.  I’ve heard this from a few customers.  Well if they are satisfied with the quality of mass produced products then they are more than welcome to go and buy them.

Present your wares as artisan craft:  A work of art.  The value is because you, the artisan, are intimately involved in the process.  From the selection of the wood, drying the turning blank, and producing a work of art, you are in charge.  Your product is different and you are not in competition with the mass market retail stores.

• Fellow Artisans

Being competitive with your fellow woodturners and other artisans is actually a mindset issue.  The customers who are looking at your work, and buying, appreciate the craftsmanship involved.  They also appreciate it in other artisans as well.  When they select a purchase it is because that item appeals to them on some basis.  They are not judging you as an artisan but simply if they like your product or not.  These customers are not buying because of the price!

There really are more customers than you realize who are willing to pay for artisan work.  While each craft show is different, and each time you sell is different, you need to realize that there are people who are willing to purchase your product.  Your challenge is not to compete with your fellow artisans but to connect well with your customers and make your sales that way.

• Yourself

Your second thoughts or second guesses on what you should price your product at is actually you being in competition with yourself.  The would have, could have, and should have, are distractions to you in your turning and in your sales.  Establish your price as one that reflects your values, your time, and your effort.  Now that you’ve set the price, move on to marketing and building that relationship with a customer.  Seriously, customers who appreciate your work are not looking at the price.  Those who are focusing on the price don’t appreciate your work.

3. Apologizing for Your Prices

I will admit to feeling very awkward talking to a customer about my woodturning and the prices I am charging.  After all, I want people to like me and to buy my products.  But I soon realized that I had nothing to apologize for.  I put the work, training, effort, and time, to make each and every one of my products.  I’m beginning to sound like a broken record, (that really dates me doesn’t it?) because your price is your price.  No apologies necessary.

You will always encounter customers who feel that because you are selling at a craft fair, it is like shopping in Mexico, and the price is always open for negotiation.  Some people will always try to get a better deal.  That doesn’t mean your price is wrong.  A friend of mine when they encounter that type of customer counters with a higher price.  Depending on the customer’s response he often does not go back to the original!

4. Prices are not Visible

In our North American economy the ability to pick up a product and see the price is expected.  So you need to make sure your prices are visible and readable.  In my mind this is part of establishing trust between you and your customer.  It is part of your communication with them as well.  If your prices are put where the customer has to hunt to find the price that just increases their frustration.  It can be a serious pricing mistake.  If you choose to put the prices on a business card attached to your product make sure the customers are not able to swap price tags on you.

One unique response to the pricing challenge was solved by a woodturning friend of mine.  He sells high end bowl turnings.  But he doesn’t like the price being the first discussion point with the customer.  He likes to point out the features of his work and the extra touches that he has added.  So he puts a label with a number on each bowl.  The price is on a sheet so when he finds out the number he can tell the customer what the price is.  This usually puts discussion of the price later in the sales conversation when the customer is more interested in the product rather than being put off by a price that “appears” too high.

5. Thinking you Need a Loss Leader

Let me say this loud and clear.  You are not a big box store or grocery chain.  Woodturned products are not commodities.  You are selling works of art that you made.  A loss leader is a product in a grocery store that the store is actually willing to sell at a loss (that is below their cost) because they know people will buy more items when they are in the store.  The goal of the loss leader is to get the customers into the store.  How do the big companies compensate for the “loss” leader?  They raise the prices on the products that would go along with that item.  So if pop is on sale then chips would be regular price.

You do not need a lower priced item in order to attract customers to your booth or table.  You do not need to use price as bait.  Take a walk away from your booth and work on making it attractive.  Do you have lights?  Do you have products at different levels?  Are your products at different price levels as well?  Work on building a long-term relationship with your customer rather than looking for a quick sale based on price.

Costs You More than Money?

It is easy to think that putting the wrong, lower price on your products simply results in you losing money.  The reality is that the price you charge reflects the value that you place on your work and your business.  You actually lose reputation and value by charging lower prices.

Charging lower prices makes it harder for you to increase your prices to reflect the work that you are doing.  Charging lower prices can sometimes lower your actual sales and therefore your total revenue.  Seriously think about the prices you are charging and make sure they are high enough to give you a good return for your time, skill, and profit.  You are worth it.

Yes, you do need to do good work.  I am speaking to the woodturner who has spent some time on the craft and is producing good work with the occasional artistic product just for good measure.  Most woodturners that I know are at this level in their turning ability.  Don’t undervalue your work.

Can you charge too high of a price?  I guess you can but most artisans, including woodturners, usually don’t err in that direction.  I would be very careful before I concluded that my prices were too high.  For artisan work it is the relationship between the artisan and the customer that determines whether there is a transaction or not.  Price is usually not the deciding factor.

Turning For Profit

Figuring out what price to put on your product is the starting point for making that sale.  You also need to develop good relationships with your customers.  If you are selling directly at a craft fair here are 7 mistakes to avoid.  Selling your woodturnings is also an art.  Have you struggled with pricing your turnings?  Let me know in the comments.  Thanks.

So enjoy the process, have fun, and remember to turn safely.