First, I want to say that a price increase for my natural jewelry is not something that I take lightly. Second, the short answer to the price change is that a small business expert whom I trust implicitly gave me some great advice and I took it. (The long answer is the rest of this post!) Lastly, I want to assure you loyal friends that you can still get any piece of my natural jewelry for the original price through the end of April (my birthday month!)
Use the coupon code LOYALTY for 30% off
Now who is this small biz expert and what did she tell me? Tara Gentile is a business blogger I’ve been following for a while and she recently published a blog post claiming that “88.2% of Business Owners Should Double Their Prices”. I knew that she’d been consulting one on one with Etsy sellers at the Etsy Success Symposium the other day, so I read the post (knowing it would probably apply to my handmade jewelry business.)
I left a comment with my pricing formula and asked her if it was enough. She answered right away and we commented back and forth a few times! The good news was that I was pretty close with my prices, I wasn’t going to have to double them, and I hadn’t been giving away my unique natural jewelry for peanuts! But, I hadn’t really been accounting for all the time I spend photographing and marketing (about half of my time!) and I hadn’t been adding in a little profit margin to grow my business with.
Tara suggested paying myself more per hour and using the pricing formula that Megan Auman (another awesome business blogger!) uses:
(Materials + Labor + Overhead + Profit = Wholesale) X 2 = Retail
(Notice that the “labor” is calculated as the actual time it takes to make a piece of jewelry, which is why she had me raise the hourly wage from $16/hr to $25/hr. to account for the other half of my time that I’m spending photographing and blogging and etc!) When I sat down and calculated it out, I was relieved that I didn’t need to double my prices, but
I was convinced that I needed to increase them by 30%
to get me into the ballpark of running a sustainable business.
So here we are! I really believe in transparency and truth and trust, so I wanted to lay the price increase right out on the table. It was scary and felt like fingernails on a chalkboard to do it, but now I feel really good about having done it! For any handmade sellers out there, do yourself a favor by checking out Tara’s post on pricing – and don’t just read it, follow her advice! Do it. Press the button and take the first step toward a sustainable future for your business. A future filled with hard, meaningful work and getting paid fairly for it! You’re worth it!!