“Before you can price for profit, you’ve got to learn the Art of Earning.” Megan Auman
The pricing process of your marketing efforts can appear to be overwhelming. But we’re here to share with you today that pricing can actually be quite easy, and even fun. With just a few helpful hints and gentle reminders, you’ll be on your way to pricing freedom!
~Pricing formula 101:
This is a very simple and easy pricing formula that is a great place to START, but certainly don’t hold yourself to this formula. It is quite possible that your product is worth WAY more than what this formula above spits out, especially if you incur very little expenses to create your product such as you wild craft or grow all of your plant material, receive your labels for free and use all recycled jars.
The basic pricing formula:
- Cost of good x 2 = wholesale price
- W holesale price x 2 = Retail Price
~Know thy costs: To help you determine what your ‘cost of goods’ is, you must know what your costs actually are! There are two types of costs; direct costs and indirect costs. Direct costs are the expenses directly incurred to create your herbal product. By knowing this number you give yourself the first variable in your pricing formula.
- materials and supplies such as oil, vinegar, alcohol, butters, wax, etc.
- plant material (if purchased or grown from seed)
- packaging (jars, labels, and tins)
- Poppy Swap listing fees and Paypal fees.
Then there are indirect costs such as your equipment and overhead (electric, gas, phone) which don’t get applied to your ‘cost of goods’ number. So, do some math. Create an excel spreadsheet and tally up those costs. It’s REALLY empowering to know this number and is an essential component to your pricing formula.
~Set your price with confidence: How do you value yourself? Do you see yourself as productive, amazing and totally worth it? Or, do you view yourself as meek, boring, and can’t imagine what anyone would see in you? This is EXACTLY what customers are perceiving when setting the price of your herbal product. Do you know with all of your heart how powerful and beautiful this product is and how many people can benefit from it? Or, do you question its ability and usefulness in the home apothecary? Set your price with clarity and confidence. If you can’t, that is okay, too. It just means you now have a wonderful opportunity to realize if you have any old and false beliefs and update your self-image and relationship to your work.
~Let’s make money: Here is an easy way to reconcile the reality of what you would like to make relative to the price you charge. Figure out how many herbal units you make a day. Determine the salary you need to be paid/would like to be paid to be fulfilled and sustained in your life. Calculate how many herbal units you can make in a year and then divide your desired salary by this and see what you come out with. Most people will find they are selling themselves way too short.
Let’s say I can create 20 herbal units a day x 3 days a week = 60 herbal units/week
60 herbal units/week x 52 weeks/year = 3120 herbal units/year
Desired salary: $40,000
$40,000 divided by 3120 herbal units = $12.48/per unit
As you can see, to make my desired salary of $40,000 for the year I need to make an average of $12.48/per unit. Realistic? TOTALLY! Look around your product line, of course it is possible to MAKE MONEY~
~Don’t try to compete with mass produced goods: There is NO WAY we as herbalists can compete with the rock-bottom pricing of mass produced goods found in chain stores, including products found in larger health food stores. And we don’t have to! Our products should be valued for what they ARE---high quality, handcrafted, spiritually infused and potent medicine intended to love and nourish the one who receives it. Trying to “measure up” or compete is unnecessary and will just make you nuts. Keep it simple: value yourself and your beautiful creativity for what it truly is. You will be rewarded immensely.
~Show your worth: Your product photography and product descriptions really convey the worth of your product. This is an area where IT IS important to look around at the market and get good clues. We are bombarded with images all day long. People only stop and look at something stunning. So make sure that your images are good! Otherwise, your store will be skipped over and people will never get to experience how wonderful your product really is.
~Considering raising your prices? Did you crunch your numbers and realize that it’s time to raise your prices because YOU are worth it?! A little reminder to be courteous and give warning to your current wholesale and retail customers.
I’d like to end this post with a powerful quote, "If you really put a small value upon yourself, rest assured that the world will not raise your price." -Author Unknown
What does this quote mean to you? Do you have anything from your own experience that you would like to share or add with your fellow swappers? We’d LOVE to hear from YOU!