IS YOUR LOW PRICING HURTING YOUR LEATHERGOODS BUSINESS?
Pricing your leathergoods too low can have a big negative impact on the success of your business.
Say you’ve just created a shop on Etsy or Shopify and you've just listed your leathergoods. Everything in your shop - your photos, descriptions, titles and tags all look great.
But there is this voice in the back of your head thats whispering, shouting or screaming,
“Your prices are all wrong! They’re too low!
But you persist and think, for one reason or another, "I don't care. Pricing too low won't hurt anything especially when i'm just getting starting and plus I really want to make some sales".
Your thinking couldn't be more wrong.
You might feel like people won’t buy your products for a higher price or that you'll just keep them low for now and then raise them later. Or you might just not know how to create a sustainable business - one that can survive and produce a profit.
These are all common reasons that I see people pricing their leathergoods for low prices but these are not the right strategies.
3 REASONS WHY PRICING TOO LOW CAN ACTUALLY HURT YOUR BUSINESS.
1 | Pricing your leathergoods too low because you don’t think people will buy it for a higher price, actually sends a message to potential customers that your products aren’t worth purchasing.
Often times a low price signals to a buyer that the value of the product is low. When comparing two similar items and debating which to buy, many customers will actually choose the higher priced item because they think that the value of the higher priced product is higher and that the lower priced item is cheap or has a lower value. So if the value of your product is higher then what your pricetag is, you could be sending the wrong message to customers.
2 | Another common mistake is to price your product low right now and then try to raise the price later it on.
This thinking becomes a real challenge because the customers that you’re attracting now with that low price point are not going to be the same customers that are going to purchase your items at a higher price point later on. You’re building a following and a targeted customer base based on the short term goal and not the long term which is to price your product higher later on. You might as well build the right target audience from the beginning.
3 | Selling your handbag that you spent 10 hrs making for $100 is just not sustainable.
You’re not even breaking even when you consider the labor costs involved let alone the material costs and overhead. When you don’t take into consideration the business as a whole then chances are, your business is not going to be sustainable. You might be selling-out of those $100 bags but you’re not making any profit on them which means that you’re not making extra spending cash, let alone extra profits that can be invested in growing your business.
HOW TO PRICE YOUR PRODUCTS FOR WHAT THEY'RE WORTH
It is best to use real materials and labor costs and take into consideration what kind of a business it is that you’re trying to build and for what kind of customer.
Do not undercut yourself because you won’t be able to build a sustainable business. Instead, price your products for what they’re worth and then you find your ideal customer who is happily willing to pay.
Pricing is just one of the major components of building a sustainable leathergoods business.
Some of the other key things that you must think about when selling your leathergoods is how to launch a new product, when to do marketing and what kind of marketing is the best, what to do after you post your leathergoods for sale, how to sustain sales and so much more.