How to Price Your Etsy Products
Be aware of Etsy's rules related to pricing., Examine your costs., Identify your target customers., Look at what your competition is doing., Think about a wholesale price before you're approached for a wholesaling deal., Consider a bundle price for...
Step-by-Step Guide
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Step 1: Be aware of Etsy's rules related to pricing.
Etsy's Dos and Don'ts section covers Etsy's rules on pricing products sold on its Web site.
Although Etsy gives you considerable latitude in how you price your products, there are a few rules you must follow:
Prices are to be reasonable for the listed items; the price should reflect only the item being listed. (Shipping costs are considered as separate from the price, but also need to be reasonable for the items sold.) Prices should not be an attempt to avoid Etsy's fees for listing the item, such as listing an item for sale for less than the actual purchase price.
Prices should not be artificially high to keep the item from being sold. “Custom order" items are to be listed with a set purchase price.
If there are factors that would affect the price, such as different sizes or styles of clothing, each variation must have its own listing with the price specified. -
Step 2: Examine your costs.
How you price your Etsy products should allow you to make back the costs you incur in making them, or the cost price.
Costs break down into direct, indirect and labor costs.
Direct costs include the costs for the materials you used to make the item, the cost of packaging, fees to list it on Etsy and fees to PayPal to handle receiving payment for the item.
Indirect costs include the cost of equipment used to make the item, such as a weaving loom or renting time at a darkroom or recording studio.
Labor costs are the hourly rate you figure your time is worth.
Labor should include all the time spent to make the item, including time working on the item while doing something else, such as sitting in a doctor's waiting room or watching television.
Labor should also include the time preparing the item listing on Etsy, developing your marketing plan and shipping the item to the customer. , You may know what you would pay for the products you make if someone else were selling them, but you may not be that similar to the people who will actually buy them.
If you can identify which customers are willing to pay more for your creations over mass-produced versions, you can price your items in a range they're willing to pay and which will earn you back your costs, plus a profit.
Once you've identified your target customers, you'll need to market effectively to those customers to justify your price in their minds.
You can write item descriptions that describe your creative process in general or specifically what went into making the item, or you can tell them what makes the item a one-of-a-kind and how they'll feel special owning one.
Look at the price ranges your customers are likely to spend when buying gifts for friends.
It's possible to lose out on sales by pricing yourself either too low below the minimum amount your customers want to spend or too high above the maximum.
Customers often think about target prices in common figures like $25 or $50, instead of offbeat prices like $22 or $52. , See how other, more experienced, Etsy retailers with items similar in quality to yours price their products.
Their prices should be in line with what you figure your price should be, based on what it costs you to make it.
If it looks significantly lower, look at what you can do to lower your cost to make the item or express in your descriptions what about your items justifies a higher price than your competitors.
Look at prices for mass-market versions of your items, if such exist.
You don't want to compete with those prices, but you can use them to weed out any of your competitors whose price is too close to the mass-market price from your evaluation. , If you are selling what you think will be a popular item, anticipate being approached by someone who wants to buy from you in bulk for a discount ranging from 30 to 60 percent.
You will make more profit per item selling by retail, but you may sell enough items on a wholesale arrangement to equal or exceed the profit.
If you normally sell an item that costs you $20 to make for $50 retail, your profit per item sold is $30.
If someone places an order asking for a 50 percent per item wholesale discount, the wholesale price will be $25 and your profit per item will be only $5.
You'll need to sell six items wholesale to make the same profit you'd make selling one item retail.
Some sellers raise their retail price so they can make an acceptable profit on a wholesale discount.
In the example above, if the item costs $25 to make instead of $20, a 50 percent wholesale discount on a retail price of $50 would mean you'd make no profit at all, no matter how many items you sold.
Raising the retail price to $55 would give you a $2.50 per item profit on a 50 percent wholesale discount. , Offering a discounted total price for two or more items sold together, or offering a free item with the purchase of one or more related items, can encourage people who value one item in the bundle more than another to buy the entire bundle, or it can simplify a difficult buying decision.
Bundling works best when the bundled items logically go together, such as a baby's onesie and bib or women's shoes and matching purse. -
Step 3: Identify your target customers.
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Step 4: Look at what your competition is doing.
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Step 5: Think about a wholesale price before you're approached for a wholesaling deal.
-
Step 6: Consider a bundle price for selling related items together.
Detailed Guide
Etsy's Dos and Don'ts section covers Etsy's rules on pricing products sold on its Web site.
Although Etsy gives you considerable latitude in how you price your products, there are a few rules you must follow:
Prices are to be reasonable for the listed items; the price should reflect only the item being listed. (Shipping costs are considered as separate from the price, but also need to be reasonable for the items sold.) Prices should not be an attempt to avoid Etsy's fees for listing the item, such as listing an item for sale for less than the actual purchase price.
Prices should not be artificially high to keep the item from being sold. “Custom order" items are to be listed with a set purchase price.
If there are factors that would affect the price, such as different sizes or styles of clothing, each variation must have its own listing with the price specified.
How you price your Etsy products should allow you to make back the costs you incur in making them, or the cost price.
Costs break down into direct, indirect and labor costs.
Direct costs include the costs for the materials you used to make the item, the cost of packaging, fees to list it on Etsy and fees to PayPal to handle receiving payment for the item.
Indirect costs include the cost of equipment used to make the item, such as a weaving loom or renting time at a darkroom or recording studio.
Labor costs are the hourly rate you figure your time is worth.
Labor should include all the time spent to make the item, including time working on the item while doing something else, such as sitting in a doctor's waiting room or watching television.
Labor should also include the time preparing the item listing on Etsy, developing your marketing plan and shipping the item to the customer. , You may know what you would pay for the products you make if someone else were selling them, but you may not be that similar to the people who will actually buy them.
If you can identify which customers are willing to pay more for your creations over mass-produced versions, you can price your items in a range they're willing to pay and which will earn you back your costs, plus a profit.
Once you've identified your target customers, you'll need to market effectively to those customers to justify your price in their minds.
You can write item descriptions that describe your creative process in general or specifically what went into making the item, or you can tell them what makes the item a one-of-a-kind and how they'll feel special owning one.
Look at the price ranges your customers are likely to spend when buying gifts for friends.
It's possible to lose out on sales by pricing yourself either too low below the minimum amount your customers want to spend or too high above the maximum.
Customers often think about target prices in common figures like $25 or $50, instead of offbeat prices like $22 or $52. , See how other, more experienced, Etsy retailers with items similar in quality to yours price their products.
Their prices should be in line with what you figure your price should be, based on what it costs you to make it.
If it looks significantly lower, look at what you can do to lower your cost to make the item or express in your descriptions what about your items justifies a higher price than your competitors.
Look at prices for mass-market versions of your items, if such exist.
You don't want to compete with those prices, but you can use them to weed out any of your competitors whose price is too close to the mass-market price from your evaluation. , If you are selling what you think will be a popular item, anticipate being approached by someone who wants to buy from you in bulk for a discount ranging from 30 to 60 percent.
You will make more profit per item selling by retail, but you may sell enough items on a wholesale arrangement to equal or exceed the profit.
If you normally sell an item that costs you $20 to make for $50 retail, your profit per item sold is $30.
If someone places an order asking for a 50 percent per item wholesale discount, the wholesale price will be $25 and your profit per item will be only $5.
You'll need to sell six items wholesale to make the same profit you'd make selling one item retail.
Some sellers raise their retail price so they can make an acceptable profit on a wholesale discount.
In the example above, if the item costs $25 to make instead of $20, a 50 percent wholesale discount on a retail price of $50 would mean you'd make no profit at all, no matter how many items you sold.
Raising the retail price to $55 would give you a $2.50 per item profit on a 50 percent wholesale discount. , Offering a discounted total price for two or more items sold together, or offering a free item with the purchase of one or more related items, can encourage people who value one item in the bundle more than another to buy the entire bundle, or it can simplify a difficult buying decision.
Bundling works best when the bundled items logically go together, such as a baby's onesie and bib or women's shoes and matching purse.
About the Author
Aaron Perez
Aaron Perez specializes in lifestyle and practical guides and has been creating helpful content for over 5 years. Aaron is committed to helping readers learn new skills and improve their lives.
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