Now that the holidays are behind us for a while, I want to talk about something all businesses at all levels have to deal with. Specifically, the idea that discounts, sales and slashing prices are required to move product. There was Black Friday, Small Business Saturday, and Cyber Monday immediately after Thanksgiving. As December rolled out, there were more and more notices in my e-mail box and my regular mail box stating that for a limited time this or that was on sale. This is great for the consumer to get a deal. Honestly, I'm delighted when something I want to buy happens to be on sale. But, think about it, would you have bought that particular item sooner if the sale price were the regular price? Or would you have bought the item at all if it wasn't on sale? If you wouldn't buy it at the regular price, why would you buy it when it was at a sale price?
Because I am behind the scenes running my small business, I know exactly what goes into each of my creations. There are materials to buy. I have to cover utilities and keep a roof over my head. I have to eat. My time is worth something. Each of these has to be factored into pricing a product. Now, for a big manufacturing outfit, there are materials, utilities, buildings and wages to employees. As a person working by and for myself, I don't have to pay wages to anyone else but me. :)
Ok, we've got all these expenses, now what? Well, you've got to figure out how much profit to add as well. Profit isn't the money used to pay wages or utilities. That's the money that is invested back into the business to fund researching and developing new ideas so you can make new products that people will love.
All these things add up to a price for each product. Once you have figured that out, ta-da, there is the price. Now, this will have to be adjusted as material costs go up or utility costs go up or any other expenses go up. The price might increase because postage goes up (as it will in the US in a couple of days). Since I have to order my materials from online vendors, that price has to be part of the cost of making my toys. The costs of making something usually don't go down unless you can figure out how to automate something. A big manufacturer may find a way to be more efficient by buying a machine that does one or more steps. But, even then, the machine costs money to buy or even build as a custom one. And, that machine has to be maintained. So while it may seem to save money and it most likely will, it has to be paid for somehow.
I have worked out all the numbers and have come up with a price, which is what I list for each toy in my Etsy store. If I put that on sale and lower the price, the question is, why can't I charge that lower price all the time? The answer is, I can't. I would end up losing when I lower the price below what I originally asked for. I will end up losing the money I use to create new products. If the number goes low enough for a deep discount, I'm giving away my time for free. A huge enough discount and essentially, I'm paying you to buy my product. A business cannot succeed like that.
Of course one option is to raise the prices even higher. That way if I do offer something on sale, I'm not losing anything. I'm still making my expenses, paying for my time and getting a profit. However, that seems dishonest to me. I work at being an honest person. Deep in my soul it feels wrong to inflate my prices just so I can put them on sale now and again. My solution is to put an fair price on my toys when I put them in my shop. I don't offer sales, or incentives, or discounts. If this causes someone to not buy my item, then so be it.
I have been approached many times by people wanting a discount, especially if they want to buy multiple items. I don't have a lot of wiggle room in my price. Whether I make one toy or 10 toys, each toy of a type takes the same amount of time and materials to make. These toys are hand made by me one at a time, not factory made by the hundreds. If someone wants to buy 2 dragons, it takes me the amount of time and materials to make the dragon two times. I don't work any faster when I make 2 of them.
The only time I can see putting my toys "on SALE" is if I have decided that I no longer will make that toy for sale and I'm getting rid of the stock to make room for something new. Or, I am no longer able to make toys at all and will be shutting the business down. I don't see either of those things happening any time soon.
I love making my toys. I had a marvelous time in 2015 exploring how to make a cloth fairy doll. I have many more ideas up my sleeve for new products and will continue to sew and design and sew some more bringing you toys that are as non-toxic as I can make them at a fair price.
