Hello all, as promised during the month of September we’ll focus on Money Mindset issues particularly as it relates to entrepreneurship, eCommerce, and self-worth. Those are three meaty topics I know, but sooo important you intend on nailing entrepreneurship and getting profitable ASAP.
This week for our first topic, we’re going to dip our toes into the murky waters of PRICING what YOU, your PRODUCTS and / or SERVICES are WORTH.
But first, a little background and a small disclaimer. I think you’ll get the most out of these posts If I’m as candid as possible. So I’ll open up a bit and share some of my own story with you as I’ve learned to charge what I’m worth particularly as I run a handmade products based business.
When I first launched my Online Shop, Elizoebeth Jensen Jewelry, nearly 4 years ago, I was completely lost on how to price my products. I mean REALLY lost. (And I don’t say that lightly as I had 15+ years of high-level corporate work experience and an MBA in my pocket to boot and I STILL really struggled on the pricing bit.)
In the very beginning I took a mathematical approach to pricing which seemed logical and was also recommended by a very kind designer who had already made quite a name for herself in the Jewelry business. I had spreadsheets like no other. I factored in every bit of cost that went into making my final product including raw materials, shipping, labor, packaging, etc.
Then I followed the industry standard of Keystoning TWICE. So basically, you take your costs multiply by at least 2 which results in your WHOLESALE cost. Then you take the wholesale cost and multiply that by two, magically arriving at your RETAIL COST. This is what you charge the general public who buys from your Store.
Here’s the breakdown: