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Good Reasons to Raise Your Prices

30 Jun

higher prices   In the on-going saga of convincing woodworkers (and general craftspeople alike) to raise their prices, I have cobbled together some great reasons to do so, as seen below. In my opinion, you need to get beyond the idea that you are competing on price with a big box retailer;  they can always make a product, and buy it, cheaper then you can.

But that’s not a disadvantage, so stop thinking it is. You have to present a different narrative to the customer – one in which value, uniqueness and enjoyment have worth beyond the price. Your customer is not looking for a low price, but a unique, custom-made piece that is gorgeous and solid.

   You make more money. If you were paid $250 for that mantle clock a year ago, and today, you’re getting $500 for it, obviously, you’ve made more money on the same labor and materials. I don’t know about you, but that’s a good thing.

   You make less to make more. Ever heard that saying….something about a fast nickel,  or a slow dime? The lesson from it is that it’s better to make more money, and it taking longer, then to make less money sooner. For example, in the previous clock example – would you rather build two clocks for the same profit, or one? Obviously, one. Less wear and tear on YOU, your machinery, supplies, time, etc.

   You raise the public’s expectation on price. Some people are going to snicker at your price; why, $1,000 for a kitchen table! I can go to (insert name of any national furniture retailer) and get it for half that! They try to make you look like a hapless chump. This is where education and salesmanship comes into play. You have to educate the client about the quality of work and materials that go into the piece, and how it’s made just for you. Custom kitchen cabinetry is a great example. Go into a Home Depot or Lowes, and take a look at their boxed kitchen cabinetry – the carcase being something like MDF with what amounts to a photo of a piece of wood stuck to the side. The joinery is terrible, usually done with staples, and pieces of plastic. The door is made of real wood, yes, but the fit and finish is usually terrible. The finish is very muddy and dull – but what can you expect from mass, spray-on “finish”? Then show the potential client one of YOUR cabinets, and how it will help the resale value of the home, not to mention your own personal enjoyment while you still own the home. Also, all the cabinetry is custom to your needs – not shoe-horned in from off the shelf junk at the store. Educate and sell. Once people know the better value, they won’t balk as much (if at all) paying for it. Not only that, but you are helping out other craftsman’s bottom line as well, since the customer understands why you pay more to get more.

   Perceived value can increase. “Perceived value” is what the person believes the piece is “worth” to them. For example, a ring from a great grandmother may have little commercial value, but it might be worth a lot to the family. Likewise, a piece made just for a customer, with design input from them, for a special occasion, etc, increases the perceived value of the piece. When the perceived value increases, the likelihood of the customer paying more does as well.

Some people just aren’t going to pay your price, no matter what it is. Some might feel a bit jaded or afraid of working with a person, because they are an unknown factor, as opposed to an established retailer. My wife and I are constantly amazed at how much money people will send me – a stranger – for an unmade product. She’ll often be amazed at my reply when she asks, “What did you get for that?” – incredulous at my price.  When you think about it though, this kind of customer has expendable income. They know what they want, and they’ll pay for it, as long as you give them what they want, and wow them. Often times, these people are self-made; they may have been a lone entrepreneur like yourself, and can identify with you.

That’s the kind of customer I want.

 

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2 Comments

Posted by on June 30, 2014 in BlogNotes

 

2 responses to “Good Reasons to Raise Your Prices

  1. Gary H

    July 7, 2014 at 1:31 am

    You need to take into consideration how the WD-40 May and can affect the wood finish. I don’t think you would want to get any of this on some unfinished work…….

     
    • pashley1916

      July 7, 2014 at 9:06 am

      I’ve never had that happen – and I found an article in Fine Woodworking to back that up. True, you wouldn’t want to spray it right onto the wood – but a think coat on a planer won’t hurt the wood finish.

       

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