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Topic: Underpricing by competitors  (Read 2071 times)
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jamanarchy
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Flavors outside of the average jam jar


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« Reply #10 on: December 19, 2011 01:31:48 PM »

I so love it when women can do this and stay home with their kids. Over the years it helped me stay home with 4! Best thing I ever did.

There are so many advantages to working from home. Working in jammies is one of my favorites.

I also love the shows but that last 3 day show wore me out I have to say. And I had help. Its so fun to get out and talk to customers and other crafters etc. The jam is a ton of fun because we give out samples so its a lot of fun to hear what people say when they taste it.
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Chris in VT
« Reply #11 on: December 20, 2011 04:36:04 AM »

This type of discussion, whether or not to charge for your time has been going on since shows first started.

If I have a shop I would have to hire people.

I would need a purchasing agent. S/he gets paid an hourly rate.
I would need a person to receive the product. S/he gets an hourly wage.
I would need someone to stock the shelves. S/he gets an hourly wage.
I would need someone to drive the truck to the suppliers. S/he would get an hourly wage.
I would need a salesperson. Hourly wage or comission?
I would need a bookkeeper. S/he would get an hourly wage.

But if I have a shop, would I take all these things into consideration?

Nope.

I would just keystone everything and just double the wholesale prices. Then deduct those costs of running the business, and what's left over is mine.

But we can't do that. But if we only charge an hourly rate for one portion of the business, and not all the aspects, we're cheating ourselves. And that's why I don't charge an hourly rate.

My way of doing business has been to first find the market value of my product. Then I find the least expensive and most time efficient way of making it, thus increasing my profit. Currently, my profit margin is around 900%. I can make around $3,000 worth of product in 30 hours, or 3 days. That's how I'm able to do 40 shows here in the northeast USA per year.
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There's NOTHING at a craft show, or on Etsy, anybody NEEDS. NOTHING.
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craftcobbler
« Reply #12 on: December 20, 2011 07:20:36 AM »

Chris,

For your product, that may work. For mine it wouldn't. So I do not think anyone is really 100% right. Different strokes for different folks right? That makes the world go around. If we all did things the same way, it would be boring. And since this is something

I work to be time efficient where possible but I also work at a pace where I know I won't make mistakes on stitching an item. Of course I also look at market values. As I've said before, my prices match almost all other colleagues in my field on Etsy and most at craft fairs. Only those two times mentioned have I encountered problems.

In sewing, there is no way humanly possible to make a 900% profit unless I have people in a third world country sew my products and pay them next to nothing. That is just not feasible. Kudos to you for getting that profit margin. I don't know anyone here who can do that. Your product is pretty different from any one else I know though and creating it is probably a much different process than mine.

Maybe another reason my way works is that, no offense, I view what I sew as useful. I think people do need them. I need them. I absolutely needed a better diaper bag. So I sewed one. Then I took one to a craft fair and sold custom orders of them. What mama doesn't need a good diaper bag? I needed something so that I wouldn't constantly lose my flashdrive and chapstick. So I designed a cozy for them. It's one of my most popular designs. It's functional. Dogs need dog collars so I sew them. I promote my products as useful things - functional and beautifully crafted. If I went into my craft fairs as nothing I have anyone needs, I wouldn't sell. Again, that isn't meant to be offensive but I could never have that mindset and be successful at what I do. I am glad you can be with a 900% profit margin but I think that is rare for a crafter.
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Chris in VT
« Reply #13 on: December 21, 2011 04:48:47 AM »

I have the statement that there's nothing at any show anybody needs because that's what an old timer told me at the very first show I did in 1980. It has kept me grounded for all these years.

Every purchase at a craft show is an impulse purchase with disposable income.

People need food. People need shoes. People need transportation. Crafts are nowhere near on the list of needs. So it's up to us to convince the customers they want what we have. And we do that by having an attractive display and an engaging demeanor at the show.

Like me, you have found items that are useful. And there is definitely a need for those items, but  do the customers need your versions of them? No. Just as the customers don't need my version of my product.

But if you're the only one selling what you make at the shows, naturally you will do well, as that's the secret to a successful show. Have what nobody else has. The last thing any show needs is another jeweler.
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There's NOTHING at a craft show, or on Etsy, anybody NEEDS. NOTHING.
www.shadypinestudios.com
CraftyChef
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Am I retired yet?


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« Reply #14 on: December 22, 2011 06:49:28 AM »

There is more gray area these days between need and want. How many folks living in this country limit themselves to food, clothing, and shelter? I personally "need" more than that, and so do others. You can call it "want" if you like, but it matters very little. Back to the pricing thing, though, unless you have a one-size-fits-all product like Chris in VT, you have to figure out prices you can live with, based on 1) the cost of materials, 2) how much will it take to make you comfortable transferring ownership of a given item to a buyer, 3) how much effort you will put into marketing (the more effort, the bigger the price you can have), and 4) how ambitious your future plans are (wholesale deals, manufacturing). Come to terms that a business owner works on salary and not on hourly pay. You will never earn hourly pay. Never, ever, ever.
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