FACTORS TO CONSIDER BEFORE SETTING THAT PRICE

Few years ago, I went to see a customer. ‘I hope they are affordable,’ she said as I displayed my jewelry on her centre table.‘ Affordability is relative ma,’ I told her.

These are unique high quality jewelry, they are not mass produced items and they will last you a long while. I have had this for almost 2 years now (I removed one of my earrings and passed to her to check). These are not just costumes; they are high quality gold plated and laced with zircon I said.

She bargained by slashing the price by 50%, I tried to convince her and make her see the value she was going to get. After much back and forth, she agreed and bought 2 sets to try with. Safe to say, she has since been hooked. Lol

But you see, the bargaining got me drained. I couldn’t understand why someone would slash my prices into two and feel that’s their worth. I knew what I was selling but the customer didn’t know that until she got convinced.

A costume is just what it is; Cheap/Worthless since it is not 24K gold; this is what most customers think. Many do not attach any value to it until you make them see or prove to them that it is worth it. This is why VALUE is the number one factor to consider when setting your price.

What value does your product have to offer? Why will the customer part with that money in exchange for your jewelry? Remember that what you value might not be what your customers need.

What does your product offer?

What benefits does the customer stand to gain by buying your product?

The greater the benefit, the more they will be willing to buy.

If you focus on the value, price becomes less important.

The price my customer offered initially was way lesser than the price I bought the jewelry for. Selling to her at that price would have meant selling at a loss. I knew this because I did my math before setting the price.

COST is another factor to consider. You want to add up everything it cost you to buy that jewelry from the selling price, shipping, packaging and finally a percentage as your profit (it is advised that you add at least 10% of your cost to be your profit).

I used to have a dedicated book for all my orders until I created an excel sheet where all I do is enter my deliverables and arrive at my selling price automatically.

MARKET PRICE: I advise you look round to check the general market price so that you have an idea how much it is being sold for before you set your price as well. Do not fix your price based on what your competition sells because your cost differs so does the perceived value for your products.

Try not to sell too low, let your prices give room for discount, sales, and cases of damage where you will need to help your customers with repair.

For every price, there will always be a market.

Price resistance is in YOU; the seller and not the buyer!

Offer great value and be confident in naming your price.

There will always be people who want to buy on credit, some end up not paying; thereby, causing you to record bad debt.

We will discuss how you can avoid selling on credit in the the next post.

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