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pricing nuances

updated sun 15 apr 07

 

Jeanette Harris on mon 9 apr 07


So I was wrapping up some pieces for a contribution to a
benefit sale and needed to price them. This has always been a big
problem for me. I know, I've read and listened to people talk about
how to figure the cost of making something, market values, etc. I
came up with a high/low range estimate to give to the people who are
in charge of the event on the inventory sheet. And that got me
thinking......

Looking at posted gas prices, I've always had to chuckle at
the $2.99 (99) price per gallon. So why don't they just say $3.00 and
be done with it? We've all seen the $19.99 price tauted on TV.......

Would someone buy something for $20.00 they wouldn't buy for $25.00?

So does $38.95 seem a lot less than say, $40.00?

Would $295.00 seem easier to cough up than $300.00?

What do you do? Do you have 'favorite' prices? How do you go
about pricing work?


--
http://jeanetteharrisblog.blogspot.com/

http://www.washingtonpotters.org/members/Jeanette_Harris/wpa_jeanette_harris.htm

Jeanette Harris
Poulsbo WA

Patty Kaliher on tue 10 apr 07


Fong Choo has the best pricing policy I have seen. He posts prices like
367.45 and 342.67 on his pots. When asked about it he said he was tired of
boring prices, they are his pots and he can put any price on them he wants.


When we see a piece we love, the budget can be made to fit the purchase or
not. A dollar either way is insignificant. The $19.99 price always seems a
sales gimmick to me. Now when buying orange juice, milk or gasoline I do
watch that penny but not with a thing of beauty.

-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of Jeanette Harris
Sent: Tuesday, April 10, 2007 12:12 AM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Pricing nuances

So I was wrapping up some pieces for a contribution to a
benefit sale and needed to price them. This has always been a big
problem for me. I know, I've read and listened to people talk about
how to figure the cost of making something, market values, etc. I
came up with a high/low range estimate to give to the people who are
in charge of the event on the inventory sheet. And that got me
thinking......

Looking at posted gas prices, I've always had to chuckle at
the $2.99 (99) price per gallon. So why don't they just say $3.00 and
be done with it? We've all seen the $19.99 price tauted on TV.......

Would someone buy something for $20.00 they wouldn't buy for $25.00?

So does $38.95 seem a lot less than say, $40.00?

Would $295.00 seem easier to cough up than $300.00?

What do you do? Do you have 'favorite' prices? How do you go
about pricing work?


--
http://jeanetteharrisblog.blogspot.com/

http://www.washingtonpotters.org/members/Jeanette_Harris/wpa_jeanette_harris
.htm

Jeanette Harris
Poulsbo WA

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nori on thu 12 apr 07


hi, everyone.

i'm going to put on my old... and rusty... marketing hat.

pricing has always been a major plank in any marketing plan, and there
is a slew of stuff written about pricing theory.

the pricing practice being discussed is "psychological pricing"...
avoiding whole numbers, eg, $20, in favor of 19.95. or avoiding 5's &
0's, such as $25, in favor of $24.

what's interesting is that the research into the effectiveness of
psychological pricing is inconclusive. some studies say that it has a
profound effect, others a minor, and others that it makes NO difference.

i must confess to having been contaminated by years of being a marketing
wonk.

i avoid 0's & 5's. my prices have LOTS of 4's & 8's....$24, $38, etc.
i don't like 9's, but don't ask me why... must be the same reason i
don't like beige, whatever that is!

i DO think that there's a blink spot... at least i have one. i might be
alone... but there are times that i'll buy a $19 object, but won't go
the extra dollar to $20.

for me, it's not based on perceived utility... it's just that at a
certain dollar point, i think a LOT harder & walk away.

i don't expect this post to be very useful... just another perspective.

sabra in rochester, where my hepatica are in bloom & there are a ton of
purple finches & gold finches. hooray.
--


Clifton, Norwich & Sabra



My pottery cat clay



Our clay studio crocus clay works



PEO International



A little effort + no money = a big difference! sample soap



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Larry Kruzan on thu 12 apr 07


<<<<IN
to your calculations for pricing, then round UP. This little bit extra pays
you for the time you spend figuring and submitting your state tax.>>>>

I would make very sure about the tax laws in your state before doing this...
In Illinois sales tax MUST be listed as a separate charge on all receipts
not "included". That is a major violation of the tax code here and can
result in the forfeiture of your business license, being charged tax on top
of the entire amount collected, fines and even jail are possible penalties.
We are allotted a very small refund for the privilege of helping to collect
taxes for our worthless governor - the exact amount escapes me but it is
like 1% of the taxes - a real joke. Don't mess with the tax man!!!

Larry Kruzan
Lost Creek Pottery

David Hendley on thu 12 apr 07


Pricing is indeed something to think about. As is often case,
however, I think that selling your own handmade product
is different than the usual business situation, so the usual
"rules" don't apply.

For example, I think it is a big mistake to price something
at $19.95. To me, this simply serves to take something that
is special and handmade and lowers it to the same
psychological territory as made-in-China home decor.

A potter needs to be perceived as above such nonsense. In
fact, usually the best marketing for a potter is to make it
appear that there is no marketing involved. Of course, that
should not be the case, but you want to be perceived as an
honest craftsperson making an honest living.

All in all, the demand for handmade pottery is, as they say in
Econ 101, pretty inelastic: if a person wants a particular mug
they will buy it. As long as the price is within reason, it doesn't
matter if the price is $19, $20, or $22. Lowering the price to
$10 might increase sales, increasing it to $40 would reduce
sales, but there is a pretty wide range where the exact amount
doesn't seem to matter.

To make things simple and transparent, once the price goes to
about $30, I price everything in $5 increments. Take a cue
from art auctions: as the price total increases, the incremental
changes also increase. The auctioneer will not accept a bid of
$203 if the price is already $200.

I tend to price my things too low, as many potters seem to
do, so if I think a piece should be between two $5 price points,
say, $35 and $40, I always increase it to the higher price.

David Hendley
Maydelle, Texas
david@farmpots.com
www.farmpots.com

Taylor Hendrix on thu 12 apr 07


I happen to like the way David thinks about this kind of stuff, so of
course I'm going to agree with him. I see no reason, however, why
someone who has done very accurate cost and time studies for their
items can't have very specific looking prices like $24.62 for a mug or
$327.80 for a platter.

What has not come up in this thread is pricing items in order to make
checkout easier. If you're selling at a fair for instance, perhaps
that $24.62 mug might become $25 so no coins are involved. Maybe not.
I don't like handling coins and if I did, I would try to make it just
quarters. My mug might go to $24.50 if I could live with the 12 cent
loss. As long as you know the magic number that you want for each
piece which will satisfy your profit need, you might consider rounding
your prices.

Of course credit card and check sales make my points gratuitous.

Taylor, in Rockport TX where Elvis has left the building.

On 4/12/07, David Hendley wrote:
> Pricing is indeed something to think about. As is often case,
> however, I think that selling your own handmade product
> is different than the usual business situation, so the usual
> "rules" don't apply.

Logan Johnson on thu 12 apr 07


Hey Taylor & All,
I've always found it a bit annoying when people can't just round off prices. Don't tell me something is $1.68 or $1.98 just call it an even $2.00 & quit trying to con me into thinking something is less expensive by saying "it's under two bucks". (Or what ever the amount.) I don't have any cents in my shop on my pottery. (O.K. I know I'm never going to hear the end of that) The only cents on a sale are because of the sales taxes. I've never lost a sale because of a few cents & I've never made a sale because I knocked off a few cents. But hey that's just me.
Later gang!
Logan
Taylor Hendrix wrote: I happen to like the way David thinks about this kind of stuff, so of
course I'm going to agree with him. I see no reason, however, why
someone who has done very accurate cost and time studies for their
items can't have very specific looking prices like $24.62 for a mug or
$327.80 for a platter.

What has not come up in this thread is pricing items in order to make
checkout easier. If you're selling at a fair for instance, perhaps
that $24.62 mug might become $25 so no coins are involved. Maybe not.
I don't like handling coins and if I did, I would try to make it just
quarters. My mug might go to $24.50 if I could live with the 12 cent
loss. As long as you know the magic number that you want for each
piece which will satisfy your profit need, you might consider rounding
your prices.

Of course credit card and check sales make my points gratuitous.

Taylor, in Rockport TX where Elvis has left the building.

On 4/12/07, David Hendley wrote:
> Pricing is indeed something to think about. As is often case,
> however, I think that selling your own handmade product
> is different than the usual business situation, so the usual
> "rules" don't apply.

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Logan Johnson
Yakima Valley Pottery & Supply
719 w. Nob Hill blvd.
Yakima Wa. 98902
(509) 469-6966
www.yakimavalleypottery.net

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Maurice Weitman on thu 12 apr 07


At 11:46 -0500 on 4/12/07, Taylor Hendrix wrote:
>I happen to like the way David thinks about this kind of stuff, so of
>course I'm going to agree with him. I see no reason, however, why
>someone who has done very accurate cost and time studies for their
>items can't have very specific looking prices like $24.62 for a mug or
>$327.80 for a platter.

(Really smooth, Tay, how you agree with David then "see no reason" to
not do it differently. Bloody typical Elvis.)

But here's one reason: it doesn't matter much. If you take five
times longer making a mug than another, should that one be priced
higher than the other? What if it's just because you're a klutz, or
incompetent, or the cat peed in the glaze?

Of course, one shouldn't price their wares without some consideration
for their costs (and time is arguably the most significant one), but
really, it's more a matter of what the current market value is,
tempered by whatever your name/mystique adds.

Think about it... let's say that you take extra care in finishing
your mugs... you delicately carve each one, spend weeks nursing their
drying carefully to avoid warps and cracks. It ends up taking you
five times as much labor to produce that mug as a large vase, jar, or
bottle. That mug would still not fetch much more than $12-$25 that
most mugs go for.

Some items we make/sell have to be priced with much less profit
margins than we'd like. There's the price point thing, there's the
MacKenzie-pricers, the need for "loss leaders," etc. Other things
should be priced higher than our costs would dictate.

>Taylor, in Rockport TX where Elvis has left the building.

I'll believe that when I see it.

Regards,
Maurice, who thinks there ought to be workshops for these
business-type issues, and who is frustrated, not amazed, by how
quickly a "clayart-only" email address gets gobbled up by spammers...
the goof address I put into the signature of my clayart message, nine
days ago, "Maurizio T. Butthead" , has so far
received 15 spam messages. Another excellent reason to not put ones
email address in the body of the clayart message. At least until
clayart archives are made somehow unavailable to spammers and/or
non-members. But I digress... it's great to be alive.

WJ Seidl on thu 12 apr 07


To add to David's post:
Some of those "usual rules" DO apply David. Here's one:

Do NOT add odd cents to your prices. Keep them in round numbers:
$5, $19, $34 and like that.

To mark something $24.79, or $33.23 or $16.54 is just BEGGING for people to
ask you "...will you take (lower round number) for that?"
Don't invite bartering, haggling and tire kickers, unless you really enjoy
that sort of thing. Me? I'd rather spend the time making more pots.

Another tip: If you live in a state that has a state sales tax, ADD IT IN
to your calculations for pricing, then round UP. This little bit extra pays
you for the time you spend figuring and submitting your state tax.
(Who did you say was paying you to do that? Thought so. Don't cut yourself
short.) Example:
You want $16 for your mug, and your state charges 7%.
16. X 1.07 = $17.12, so the price you charge is $18, and you have a VERY
conspicuous sign (as in: with BIG RED LETTERS) in your shop/booth that says
"Sales Tax INCLUDED".
A "perceived" deal (the word "included" is a very subtle, yet strong
motivator) will snag customers. Works almost every time on those
penny-pinchers, and you'll snag other sales from those who HATE carrying
change.
IMHO, YMMV.
Best,
Wayne Seidl

-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of David Hendley
Sent: Thursday, April 12, 2007 11:33 AM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Re: Pricing nuances

Pricing is indeed something to think about. As is often case,
however, I think that selling your own handmade product
is different than the usual business situation, so the usual
"rules" don't apply.

For example, I think it is a big mistake to price something
at $19.95. To me, this simply serves to take something that
is special and handmade and lowers it to the same
psychological territory as made-in-China home decor.

A potter needs to be perceived as above such nonsense. In
fact, usually the best marketing for a potter is to make it
appear that there is no marketing involved. Of course, that
should not be the case, but you want to be perceived as an
honest craftsperson making an honest living.

All in all, the demand for handmade pottery is, as they say in
Econ 101, pretty inelastic: if a person wants a particular mug
they will buy it. As long as the price is within reason, it doesn't
matter if the price is $19, $20, or $22. Lowering the price to
$10 might increase sales, increasing it to $40 would reduce
sales, but there is a pretty wide range where the exact amount
doesn't seem to matter.

To make things simple and transparent, once the price goes to
about $30, I price everything in $5 increments. Take a cue
from art auctions: as the price total increases, the incremental
changes also increase. The auctioneer will not accept a bid of
$203 if the price is already $200.

I tend to price my things too low, as many potters seem to
do, so if I think a piece should be between two $5 price points,
say, $35 and $40, I always increase it to the higher price.

David Hendley
Maydelle, Texas
david@farmpots.com
www.farmpots.com

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melpots@pclink.com.

Chris trabka on thu 12 apr 07


>What do you do? Do you have 'favorite' prices? How do you go
>about pricing work?

Jeanette,

I have found 3 price ranges (from the customer's point of view):
$15-$25 The impulse purchase for me
$40-$75 The gift for an occasion: Wedding, Anniversary, New House
$100+ I just have to have this and I don't care about the price

Based on the above range, after several years of keeping spreadsheets, the
average price is about $35.00. The average number of pieces I sell to a
single customer is 1.5.

Chris

Pamela Regentin on thu 12 apr 07


Considering the extreme slumping value of the American dollar, anything less than a dollar is practically worthless and certainly not worth the time and effort of calculation and making/keeping change. I don't even bend over to pick up a penny when I am sweeping anymore. Not worth the effort...

jmho,
Pam

WJ Seidl wrote: To add to David's post:
Some of those "usual rules" DO apply David. Here's one:

Do NOT add odd cents to your prices. Keep them in round numbers:
$5, $19, $34 and like that.

To mark something $24.79, or $33.23 or $16.54 is just BEGGING for people to
ask you "...will you take (lower round number) for that?"
Don't invite bartering, haggling and tire kickers, unless you really enjoy
that sort of thing. Me? I'd rather spend the time making more pots.

Another tip: If you live in a state that has a state sales tax, ADD IT IN
to your calculations for pricing, then round UP. This little bit extra pays
you for the time you spend figuring and submitting your state tax.
(Who did you say was paying you to do that? Thought so. Don't cut yourself
short.) Example:
You want $16 for your mug, and your state charges 7%.
16. X 1.07 = $17.12, so the price you charge is $18, and you have a VERY
conspicuous sign (as in: with BIG RED LETTERS) in your shop/booth that says
"Sales Tax INCLUDED".
A "perceived" deal (the word "included" is a very subtle, yet strong
motivator) will snag customers. Works almost every time on those
penny-pinchers, and you'll snag other sales from those who HATE carrying
change.
IMHO, YMMV.
Best,
Wayne Seidl

-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of David Hendley
Sent: Thursday, April 12, 2007 11:33 AM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Re: Pricing nuances

Pricing is indeed something to think about. As is often case,
however, I think that selling your own handmade product
is different than the usual business situation, so the usual
"rules" don't apply.

For example, I think it is a big mistake to price something
at $19.95. To me, this simply serves to take something that
is special and handmade and lowers it to the same
psychological territory as made-in-China home decor.

A potter needs to be perceived as above such nonsense. In
fact, usually the best marketing for a potter is to make it
appear that there is no marketing involved. Of course, that
should not be the case, but you want to be perceived as an
honest craftsperson making an honest living.

All in all, the demand for handmade pottery is, as they say in
Econ 101, pretty inelastic: if a person wants a particular mug
they will buy it. As long as the price is within reason, it doesn't
matter if the price is $19, $20, or $22. Lowering the price to
$10 might increase sales, increasing it to $40 would reduce
sales, but there is a pretty wide range where the exact amount
doesn't seem to matter.

To make things simple and transparent, once the price goes to
about $30, I price everything in $5 increments. Take a cue
from art auctions: as the price total increases, the incremental
changes also increase. The auctioneer will not accept a bid of
$203 if the price is already $200.

I tend to price my things too low, as many potters seem to
do, so if I think a piece should be between two $5 price points,
say, $35 and $40, I always increase it to the higher price.

David Hendley
Maydelle, Texas
david@farmpots.com
www.farmpots.com

____________________________________________________________________________
__
Send postings to clayart@lsv.ceramics.org

You may look at the archives for the list or change your subscription
settings from http://www.ceramics.org/clayart/

Moderator of the list is Mel Jacobson who may be reached at
melpots@pclink.com.

______________________________________________________________________________
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Jeanette Harris on thu 12 apr 07


>Wayne said:
>Another tip: If you live in a state that has a state sales tax, ADD IT IN
>to your calculations for pricing, then round UP. This little bit extra pays
>you for the time you spend figuring and submitting your state tax.
>(Who did you say was paying you to do that? Thought so. Don't cut yourself
>short.) Example:
>You want $16 for your mug, and your state charges 7%.
>16. X 1.07 = $17.12, so the price you charge is $18, and you have a VERY
>conspicuous sign (as in: with BIG RED LETTERS) in your shop/booth that says
>"Sales Tax INCLUDED".
>A "perceived" deal (the word "included" is a very subtle, yet strong
>motivator) will snag customers. Works almost every time on those
>penny-pinchers, and you'll snag other sales from those who HATE carrying
>change.

I like that idea; I like it a LOT.

Good one, Wayne
--
http://jeanetteharrisblog.blogspot.com/

http://www.washingtonpotters.org/members/Jeanette_Harris/wpa_jeanette_harris.htm

Jeanette Harris
Poulsbo WA

David Hendley on thu 12 apr 07


Hi Wayne, I hate to be so contrary, but I strongly disagree
with your 'sales tax included' advice.
First of all, a sign that says "Sales Tax INCLUDED" is
illegal in Texas. I'm not kidding; the attorney general has
so ruled. Any such promotion is required to have wording
which says, 'sales tax is not really included. You still have
to pay sales tax, but we are lowering the price by an amount
equal to the sales tax you pay'.
They have actually taken some furniture stores to court for
this. I wonder if other states have similar laws?

Second, this is just not good marketing. People expect to pay
sales tax, and I want them to be aware that they are paying
sales tax. Saying that it is included can give the impression that
you are either not collecting sales tax or not reporting it.
I already get people, from time to time, who offer to pay cash
if I will not charge tax. I sure don't want to encourage that.

Once you get up into higher prices, sales tax really does add
enough to make YOUR price sound higher. Texas has a high
rate (8.25% in most cities), Tennessee is even higher at over
9%. That means your $100 pot is now priced at $110, a
significantly higher-sounding price.

Generally, I think the best pricing is to de-emphasize price.
You want to attract 'good' customers, not penny-pinchers
and hagglers. The best way to do this is to stick with common
round numbers. Not only should no 'cents' be involved in the
price, but even a number like $19 can give the impression
that you are 'pricing for the market'. $20 is a better price,
for psychological reasons that reinforce the idea that you are
a high-class artist and you expect to receive your quoted price.

David Hendley
Maydelle, Texas
david(at)farmpots(dot)com
http://www.farmpots.com


----- Original Message -----

> Do NOT add odd cents to your prices. Keep them in round numbers:
> $5, $19, $34 and like that.
>
> To mark something $24.79, or $33.23 or $16.54 is just BEGGING for people
> to
> ask you "...will you take (lower round number) for that?"
> Don't invite bartering, haggling and tire kickers, unless you really enjoy
> that sort of thing. Me? I'd rather spend the time making more pots.
>
> Another tip: If you live in a state that has a state sales tax, ADD IT IN
> to your calculations for pricing, then round UP. This little bit extra
> pays
> you for the time you spend figuring and submitting your state tax.
> (Who did you say was paying you to do that? Thought so. Don't cut yourself
> short.) Example:
> You want $16 for your mug, and your state charges 7%.
> 16. X 1.07 = $17.12, so the price you charge is $18, and you have a VERY
> conspicuous sign (as in: with BIG RED LETTERS) in your shop/booth that
> says
> "Sales Tax INCLUDED".
> A "perceived" deal (the word "included" is a very subtle, yet strong
> motivator) will snag customers. Works almost every time on those
> penny-pinchers, and you'll snag other sales from those who HATE carrying
> change.
> IMHO, YMMV.
> Best,
> Wayne Seidl

sacredclay on fri 13 apr 07


There's a pricing system that I use. For the florist shop in South
Carolina, there's a building boom going on in her area. If I can make
the whole pot in less than three minutes (mind you, they are simple
with some altered forms ala Daniel Rhodes), I sell them cheap because
she's competing with all the other business there with supplies
bought cheaply in China. but if I have to do all the things that you
just listed, then they don't get sold to her. Sometimes she'll ask
for more complicated designs. At whcih point, I'll either ok it, or
tell her bluntly,"That's going to cost you $65 just for that one
piece." Do I like selling it cheap? Hell no!But right now, I'm not
making any money elsewhere. But to be fair, my options are better
than most because firing and glazes are free to me at the moment.
Right now, I have to decide which is the lesser of the two evils. but
I do know one thing-I'm enjoying it because I am throwing.I am
building. I am happy because I'm doing what I love so deeply and
happily and all the other wonderful adverbs that decribes this
mystical, ageless,magical meterial.And by the way, Elvis had stopped
by. He said "Hi,y'all!" Kathryn in NC --- In
clayart@yahoogroups.com, Maurice Weitman wrote:
>
> At 11:46 -0500 on 4/12/07, Taylor Hendrix wrote:
> >I happen to like the way David thinks about this kind of stuff, so
of
> >course I'm going to agree with him. I see no reason, however, why
> >someone who has done very accurate cost and time studies for their
> >items can't have very specific looking prices like $24.62 for a
mug or
> >$327.80 for a platter.
>
> (Really smooth, Tay, how you agree with David then "see no reason"
to
> not do it differently. Bloody typical Elvis.)
>
> But here's one reason: it doesn't matter much. If you take five
> times longer making a mug than another, should that one be priced
> higher than the other? What if it's just because you're a klutz, or
> incompetent, or the cat peed in the glaze?
>
> Of course, one shouldn't price their wares without some
consideration
> for their costs (and time is arguably the most significant one), but
> really, it's more a matter of what the current market value is,
> tempered by whatever your name/mystique adds.
>
> Think about it... let's say that you take extra care in finishing
> your mugs... you delicately carve each one, spend weeks nursing
their
> drying carefully to avoid warps and cracks. It ends up taking you
> five times as much labor to produce that mug as a large vase, jar,
or
> bottle. That mug would still not fetch much more than $12-$25 that
> most mugs go for.
>
> Some items we make/sell have to be priced with much less profit
> margins than we'd like. There's the price point thing, there's the
> MacKenzie-pricers, the need for "loss leaders," etc. Other things
> should be priced higher than our costs would dictate.
>
> >Taylor, in Rockport TX where Elvis has left the building.
>
> I'll believe that when I see it.
>
> Regards,
> Maurice, who thinks there ought to be workshops for these
> business-type issues, and who is frustrated, not amazed, by how
> quickly a "clayart-only" email address gets gobbled up by
spammers...
> the goof address I put into the signature of my clayart message,
nine
> days ago, "Maurizio T. Butthead" , has so far
> received 15 spam messages. Another excellent reason to not put ones
> email address in the body of the clayart message. At least until
> clayart archives are made somehow unavailable to spammers and/or
> non-members. But I digress... it's great to be alive.
>
>
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Lois Ruben Aronow on fri 13 apr 07


A BIG reminder on this: if you build sales tax into the price, DON'T FORGET
to pay the sales tax to the Dept. of Finance, or whoever is your state
authority.

You would be SUBTRACTING the amount from your total sales figure.

-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of Jeanette Harris
Sent: Thursday, April 12, 2007 10:26 PM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Re: Pricing nuances

>Wayne said:
>Another tip: If you live in a state that has a state sales tax, ADD IT
>IN to your calculations for pricing, then round UP. This little bit
>extra pays you for the time you spend figuring and submitting your state
tax.
>(Who did you say was paying you to do that? Thought so. Don't cut
>yourself
>short.) Example:
>You want $16 for your mug, and your state charges 7%.
>16. X 1.07 = $17.12, so the price you charge is $18, and you have a
>VERY conspicuous sign (as in: with BIG RED LETTERS) in your shop/booth
>that says "Sales Tax INCLUDED".
>A "perceived" deal (the word "included" is a very subtle, yet strong
>motivator) will snag customers. Works almost every time on those
>penny-pinchers, and you'll snag other sales from those who HATE
>carrying change.

I like that idea; I like it a LOT.

Good one, Wayne
--
http://jeanetteharrisblog.blogspot.com/

http://www.washingtonpotters.org/members/Jeanette_Harris/wpa_jeanette_harris
.htm

Jeanette Harris
Poulsbo WA

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Neal on fri 13 apr 07


I don't sell my pots but a few times a year. When
participating with the Triangle Potters Guild in
shows, we have to have price stickers with our
initials. I found some small ones that work in my
printer. I print up sheets of them with different
prices. What works for me: $5, $7, $10, $12, $15,
$18, $20, $25, $30, $35, $40, $50, $60, $75.

I could probably do away with the $5, $12, and
$18 ones--but occasionally there are pieces that
fit these in my mind.

A lot of my friends and customers tell me my
prices are too low. I see them as realistic.
People could easily drive to Seagrove and buy
pots there for less than I sell mine (or wait
until State Fair time when many potters come for
a week in October) or go to some local galleries
and find similar ones for a couple of dollars more.
I strive for the middle ground.

Deciding what to price each type of item depends
on several factors but the main one is time. Small
vases that I throw quickly, don't trim, glaze
quickly and fit the various gaps between larger
pots in the kiln are priced cheap. Teapots are
priced high.

Neal O'Briant

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RJ Shulenburg on fri 13 apr 07


Oops...tomorrow...correctly spelled. I hate when I click send b4 spell ck.

-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of David Hendley
Sent: Thursday, April 12, 2007 11:33 AM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Re: Pricing nuances

Pricing is indeed something to think about. As is often case, however, I
think that selling your own handmade product is different than the usual
business situation, so the usual "rules" don't apply.

For example, I think it is a big mistake to price something at $19.95. To
me, this simply serves to take something that is special and handmade and
lowers it to the same psychological territory as made-in-China home decor.

A potter needs to be perceived as above such nonsense. In fact, usually the
best marketing for a potter is to make it appear that there is no marketing
involved. Of course, that should not be the case, but you want to be
perceived as an honest craftsperson making an honest living.

All in all, the demand for handmade pottery is, as they say in Econ 101,
pretty inelastic: if a person wants a particular mug they will buy it. As
long as the price is within reason, it doesn't matter if the price is $19,
$20, or $22. Lowering the price to $10 might increase sales, increasing it
to $40 would reduce sales, but there is a pretty wide range where the exact
amount doesn't seem to matter.

To make things simple and transparent, once the price goes to about $30, I
price everything in $5 increments. Take a cue from art auctions: as the
price total increases, the incremental changes also increase. The auctioneer
will not accept a bid of
$203 if the price is already $200.

I tend to price my things too low, as many potters seem to do, so if I think
a piece should be between two $5 price points, say, $35 and $40, I always
increase it to the higher price.

David Hendley
Maydelle, Texas
david@farmpots.com
www.farmpots.com

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David Berg on fri 13 apr 07


Its not illegal in my state to say "Sales tax included".
Today I called the department of revenue and asked and
the representative confirmed that it was just fine to do it
that way ... as long as you make the calculation and pay
your fair share to the gov on time.

I don't understand why you think it is not good marketing.
Maybe in the future when my pottery business grows and
I have my own retail gallery, I will price my ware and add
the additional sales tax, but right now, with the fine art
fairs that I am doing, it is just a lot simpler to work with
even dollar amounts and not have to mess with metal
change.

The gov always wants his.
David
David Berg
dberg2@comcast.net
http://bergstoneware.com/

On Apr 12, 2007, at 10:29 PM, David Hendley wrote:

> Hi Wayne, I hate to be so contrary, but I strongly disagree
> with your 'sales tax included' advice.
> First of all, a sign that says "Sales Tax INCLUDED" is
> illegal in Texas. I'm not kidding; the attorney general has
> so ruled. Any such promotion is required to have wording
> which says, 'sales tax is not really included. You still have
> to pay sales tax, but we are lowering the price by an amount
> equal to the sales tax you pay'.
> They have actually taken some furniture stores to court for
> this. I wonder if other states have similar laws?
>
> Second, this is just not good marketing. People expect to pay
> sales tax, and I want them to be aware that they are paying
> sales tax. Saying that it is included can give the impression that
> you are either not collecting sales tax or not reporting it.
> I already get people, from time to time, who offer to pay cash
> if I will not charge tax. I sure don't want to encourage that.
>
> Once you get up into higher prices, sales tax really does add
> enough to make YOUR price sound higher. Texas has a high
> rate (8.25% in most cities), Tennessee is even higher at over
> 9%. That means your $100 pot is now priced at $110, a
> significantly higher-sounding price.
>
> Generally, I think the best pricing is to de-emphasize price.
> You want to attract 'good' customers, not penny-pinchers
> and hagglers. The best way to do this is to stick with common
> round numbers. Not only should no 'cents' be involved in the
> price, but even a number like $19 can give the impression
> that you are 'pricing for the market'. $20 is a better price,
> for psychological reasons that reinforce the idea that you are
> a high-class artist and you expect to receive your quoted price.
>
> David Hendley
> Maydelle, Texas
> david(at)farmpots(dot)com
> http://www.farmpots.com

Ellen Currans on fri 13 apr 07


Oregon has no sales tax which certainly makes retail selling much
simpler. The state gets their money though, with a hefty state Income
Tax. Going out of state to sell is painful since we have to get the
proper papers allowing us to collect sales tax, deal with the tiny
printed charts to collect it, send in our collection very quickly or
get dunned extra for being late, and then still pay Oregon State Income
taxes on our sales. No use in fussing about it - it is just the way it
is. I always left my prices the same and collected the sales tax on the
total sales. It thought it better that the customer see they are paying
a tax to the state - not just a higher price to me.

Our Oregon Potter's Showcase will be happening May 5,6 and 7 at the
Oregon Convention Center. We have about 200 potters involved in the
show and sales the last few years have ranged from $495,000 to $425,000
or so. We have a central sales desk which handles all the sales and a
bookkeeping committee that keeps track of each potter's sales and
commission. After the first few years where everyone priced their work
however they wanted to, we learned to insist upon even numbers. No
l9.95's or 12.50's. The reason is simple. It is much easier to
correctly and quickly add large amounts of sales if you don't have to
enter all the little odd cents. Once you have trained your customers to
expect even numbers they don't try to save little bits of money on each
pot. I think this pricing rule makes the whole show seem more
professional and less of a bargain basement event.

Ellen Currans
Dundee, Oregon
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gsomdahl on sat 14 apr 07


Neal wrote:
> ...
> I found some small ones that work in my
> printer. I print up sheets of them with different
> prices. What works for me: $5, $7, $10, $12, $15,
> $18, $20, $25, $30, $35, $40, $50, $60, $75.
Use address label sheets. For "sales tax included", print three lines:
the price, the tax and the total. Preprinting the amounts will make
writing the receipts and logging the sale easy.
Gene

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This is a post only account. Send replies to "gene" at my ".com" domain named "somdahl".

Lois Ruben Aronow on sat 14 apr 07


> I don't understand why you think it is not good marketing.
> Maybe in the future when my pottery business grows and I have
> my own retail gallery, I will price my ware and add the
> additional sales tax, but right now, with the fine art fairs
> that I am doing, it is just a lot simpler to work with even
> dollar amounts and not have to mess with metal change.
>
My feeling is that it is not "good marketing" because it belittles what you
make and sell. People expect to pay sales tax when they shop at a store or
for fine goods. It is very downscale. You are also ripping yourself off.

While someone may be pleased as punch to pay, say, $50 for a vase, they are,
in fact, paying $46 for that vase (I live in NY, and the tax is .08275).
Maybe that same vase wouldn't sell for $55 - the price of the vase with the
tax included. But few people would argue about paying $5 less PLUS tax,
particularly at "fine art fairs".

Sell your work for what you think it is worth. People expect to pay sales
tax. You are just the middleman.

...Lo

Lois Aronow Ceramics

www.loisaronow.com
www.craftsofthedamned.blogspot.com