Be An Expert - Pricing - How To Price & Why

How to price your products is something we've covered before, and for those who missed it last time here's a link to a pricing formula that you can use to help you work it out: https://www.etsy.com/uk/seller-handbook/article/a-simple-formula-for-pricing-your-work/26192517008 

Today let's think about WHY we need to include labour AND profit in our pricing formula. As a self-employed sole trader all your profits count as your personal earnings, so you will be taxed on both your 'labour' and your 'profit' which you've added into your pricing formula. So why should you separate them into 2 categories when working out the formula and looking at how your business is doing? Here's why:

Labour should be your wages. This is what you actually need to pay yourself each month so you can afford to eat and pay for stuff for yourself (not stuff for the business). 

Profit is what you can use to help your business grow. Need to buy a new camera to photograph your items? A new printer for invoices or to start selling greetings cards? Want to buy your materials in bulk to bring the costs down? This is where you can re-invest your profits into the business, rather than spending your wages on them (and making yourself live on baked beans for the next month).

Make sure you don't spend ALL your profit on new toys though. Leave yourself enough for business expenses e.g. if you regularly spend £100 a month on jewellery findings, don't spend all your money on a new camera and then realise you can't buy jewellery findings for a few months. Leave yourself enough to pay your tax (even if you don't pay tax yet you might grow big enough to, so it's good to start setting some aside). Leave yourself a buffer for unexpected costs e.g. needing to refund a customer who spent a lot in your shop.

If you feel you can't put profit into your formula at the moment because it will push your product's retail price too high, then at least just include a small amount of profit. Once you've saved enough to buy materials in bulk this will bring your costs down and make your profit margin bigger, so you can grow it that way, rather than adding it to the retail price.

Just make sure you are earning enough to pay yourself and help your business grow!

Next week we're going to look at why your wholesale price should be approx 50% off your retail price.

Bright & Beautiful Items From The Dorset Team On Etsy

We hope that everyone is enjoying February! Are you starting to see signs of spring, bringing a promise of longer days and warm weather?

If you need a little more colour and light to uplift you then check out this month's 'Bright and Beautiful' Pinterest board. Our team members have been pinning cheerful products from each other's shops. It's definitely something to make you smile when the weather is grey and the nights are still drawing in too soon!

Be An Expert - Looking Ahead - Targeting Special Occasions

We're all pretty good at thinking about Christmas when planning ahead for our Etsy shops, right? What about the other key dates and special occasions during the year? Valentine's Day has just passed, but there's still plenty of other occasions you can be planning for. You may think of Mother's Day, Father's Day, Easter... but what about all the other key dates?

Make sure you investigate events that could be important to your target market. Is your ideal customer a mum with school-age kids? Make sure you think about teacher's gifts at the end of the school year, or back-to-school items in September. If your customers are festival-lovers don't forget about Glastonbury.

Think of seasonal activities - summer is Wedding Season so people will be searching for favours, decorations, gifts, and more. In the autumn customers will start shopping for more cosy, homely items, and you can target Halloween if it suits your shop.

Take a moment to sit down and work out what dates you should be targeting in 2017. You can check this World First key dates for business list here: https://www.worldfirst.com/…/i…/32-key-retail-dates-of-2017/ and for some more wacky ideas check out this Time & Date list of funny dates: https://www.timeanddate.com/holidays/fun/

'Chocolate and Mint Day' or 'World Juggling Day', anyone?

Decide whether you need to design new products for your key dates, or whether you just need to tweak your tags and re-arrange your shop in advance of the event. Work out how far in advance you need to do those things (a couple of months at least) and mark them on your calendar now!