Price Increase

[shadojake]

Hello Everyone,

I am considering a price increase for my coasters. They have been at the same price for over a year. Currently I am selling them for $20/set of 4. I back the tax out of that price so the actual price is $18.35 (9% tax between state and local). The coasters are tumbled travertine and I apply all the designs myself. My cost of supplies + the tax on each set is about 1/4 of my retail price. That costs does not include my time. I work from home so I am not paying rent or any other fees for a studio/office or for travel expense.

When I wholesale to a local retail store, up to 3 stores now, I wholesale them for $12. I feel that is my absolute minimum wholesale price. Local stores around here usually keystone or keystone + 10%. So there are retail stores in my town who are selling my coasters for $24-25 per set. One store has been selling my coasters for well over a year & has made multiple reorders. This is the design they carry ... 1000-O (http://www.customcoastersbycindy.com/Classic-Monogram-1005.htm). Of course, I have the whole alphabet available, this is just a sample from my website. The other two stores are recent additions to my wholesale accounts and have not had sufficient time to reorder yet.

I would like to increase my retail price either to $22 or $24 per set of 4. Dh seems to think that if I do a price increase I should go ahead price them at $24. How do I go about deciding how much of an increase is too much? Even at $20, a $4 increase is a 20% increase. Is 20% too much? I feel at $24 that I could comfortable leave my price alone for at least another year. At $22, I am not so sure. I would still back out my tax. Using even dollar amounts makes it easier at craft shows, no need for coinage to make change.

I have looked at etsy and pinterest for inspiration and part of viewing what others are doing is seeing their prices. (I don't copy their work but just get inspired.) I felt for a long time that I was high compared to those sites. I have read (in articles written for and by crafters) that crafts people tend to undersell their products there, so I take their prices with a grain of salt. However, it is hard to find similar products to what I sell on other sites. Though I scour the internet, it is hard to find truly similar products on other independent websites, thus is it hard to do accurate price comparisons. It is not that I wanting to be like everyone else in what I do, because I do want to offer something different. Otherwise, why do it, right?

Please give feedback on how to decide is a fair increase.

[Paul]

Hi Cindy, It's really about what the market will accept. Since you don't have a competitor to compare to you probably should just increase slowly until you get resistance from your customers. You already know stores are getting up to $ 24. Raise 1 dollar at a time, maybe every month or so.

[Wozcreative]

You can raise it, or you can also add a bit more value and make it a 6 coaster set? I've always looked for 6 coasters when buying.

[shadojake]

Hi Cindy, It's really about what the market will accept. Since you don't have a competitor to compare to you probably should just increase slowly until you get resistance from your customers. You already know stores are getting up to $ 24. Raise 1 dollar at a time, maybe every month or so.

My issue with this is having to change prices n my website every few weeks. When I do a price increase I'd rather do it and be done with it for at least 6 months. The reason I am already leaning toward $24 is because the retailers are already getting that price.

[shadojake]

You can raise it, or you can also add a bit more value and make it a 6 coaster set? I've always looked for 6 coasters when buying.

The main issue with more than 4 coasters is packaging. I can easily tie 4 coasters with a length of ribbon. This is how they are displayed at craft shows and remain that way when they are boxed for transport/shipment. More than four will get tricky. Also, my boxes that I bought for transport and storage hold 4 sets of four. Four sets of 4 are about 9 lbs.!

[Fulcrum]

I would do the price increase in two stages.

First stage is a $2.00 jump (only 10%) for 4-6 months. Track and compare your sales after this increase. If sales remain the same, proceed to stage 2. If sales decrease but profits remain the same than you will need to make a decision from there.

Stage two is the final $2.00 increase to $24.00. Like stage one, always track and compare the sales figures.

[huggytree]

a 9% increase per year seems a bit extreme

i do agree with yearly price increases...its something you must do, but unless material costs/labor costs went up that much i cant see 9%

ive done 5%-6% a year on occasions....this year i only went up 2%

ive never seen any signs of me losing business over my price increases because my competition does the same...we are not in the same business category though so my advice may not apply to you

[shadojake]

huggytree,

I appreciate what you have to say. The reason I came up with that amount is this .... I retail on my own through orders that are called in, my website, etc. I also have stores that are retailing my product. I am considering getting MY retail prices in line with what they are selling them for. By the time I pay for supplies, my prep time in purchasing supplies, making my items, etc., there is not a lot of profit. I guess I am trying to see if I can level the playing field between the orders I take and what the retailers charge.

I do appreciate all the responses so far.