#40: The Biggest Pricing Mistakes That Cost You Big Time
Let’s go back to school today…
Raise your hand if you’ve ever gotten feedback that your jewelry is priced too high or too low.
Raise your hand if you aren’t making enough sales because of price resistance that you don’t know about…
…Seriously, get your hand up.
Because I can pretty much guarantee that if we were all in the same room, every single hand would be in the air.
Pricing your jewelry correctly is probably the biggest across the board struggle for designers. And here’s why:
If you’re not designing your jewelry from the very first sketch with a price point in mind, you could end up with a piece that is way more expensive than the other pieces in your line due to materials and labor overhead.
Or, equally as bad, you could produce the perfect piece for your collection but underprice it, which will make buyers question the value of the jewelry and leave it sitting on your inventory.
Both are bad for sales. Unfortunately, both happen to pretty much every jewelry biz owner at some point.
(You can put your hand down now).
I’m speaking from experience here.
I have made almost every pricing mistake that can be made during my career… and when my pricing was not correct it was crippling to my business.
On today’s episode I’m going to help you identify the biggest pricing mistakes jewelry biz owners make that cost you big time.
Mistake 1: Not Considering the Perceived Value on the Market
Perceived value is just really the idea of what the customer is willing to pay for whatever it is that you deliver.
Overpricing your jewelry may cause serious price resistance.
Underpricing your jewelry does just as much harm as overpricing because your customers sense you are undervaluing yourself.
BOTH lead to a cycle of low sales.
Mistake 2: Misunderstanding Your Break-even Point
The next mistake that a lot of designers make is not focusing on or understand what a break-even point is. A break-even point is… surprise!… the point at which you break-even in business.
It’s the point your sales cover all of your expenses, and it’s something that needs to be fully understood in order to properly price your jewelry.
Mistake 3: Obsessing On An Across The Board Overhead Number
Have you ever become obsessed with figuring out a single overhead number to input into every piece of jewelry you make?
This is one of the biggest mistakes designers make and, surprise, it’s one of the most debilitating.
The Truth: It doesn’t matter how much overhead you put into the pricing of each piece of jewelry if you’re not making your break-even point!
This is so important to understand because there is no silver bullet formula for pricing jewelry that works for every business, every time.
(Sorry to be the bearer of bad news..)
Now, the GOOD news..
To hear more about these three mistakes and to find out what the others are, tune into today’s episode.
I know it’s a lot to take in, so we created a FREE Pricing Cheat Sheet for you!
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xo, Tracy Matthews
Chief Visionary Officer Flourish & Thrive Academy