The Pricing Dilemma: How Do You Price Your Products?

Dec 19, 2017

For new business owners there is perhaps no greater challenge than pricing products for sale.

My wife and I ponder this each time I complete a new product. Based upon a thousand different factors we each arrive at a figure and then we yield to one another to determine a final price.

What are the factors?

1. Data alone (materials, equipment, supplies) : how much did the wood cost? What about the glue? The clamps? How about the table saw and miter saw; and the saw blades on each? The more equipment we own the less time it takes to make a product, and the better the product will turn out; but how do you price this out?

2. Governmental cost (keepin it legal) : I’ve been quite amazed as politicians often state how “America was built on Small Businesses” just how much we have to pay Uncle Sam to build our small business.

It’s not just sales tax or business licenses; it’s the various requirements made by different municipalities. For us, selling at a market in XYZ county is different then selling online. Thankfully my wife stays on top of that area.
3. Time: Another area of challenge with a business.

As they say "Time is money"

I don’t have set hours which can be a blessing and a curse. I can work on 2 or 3 similar items at a time but I can also be pulled away easier for non-emergencies since I am my own boss. I can also stop in my shop at 9 p.m. and do a cutting board glue up or put another coat of finish on a pepper mill.
4. Market: what will a willing buyer pay a willing seller for a piece of functional wood art? Compare one of my $175 cutting boards to a $39 one mass produced in a foreign country. They’re both made of wood right? Not everyone is your market.... know your target market and know who "you" are.
5. Quality of workmanship: now we’re at the ultimate in variables. How do I compare what I make with what someone else makes? It’s easy for me to look at other woodworkers and see their expertise, where often I see my own flaws; so when it comes to quality I have 2 things to go by:
a. Customer feedback

b. Personal use

Our customer feedback has been very favorable, and before we sell any product the first one (or more) goes to my wife. If my cutting boards or pepper mills can stand up to her daily use then they can stand the test of time with others.

6. Reputation: you only get a good reputation through consistent quality and time.

So what’s our final conclusion? We set our price to be what we believe one should reasonably pay for a quality, handcrafted product. The intangible value lies in the artistry and know how that goes into making it....... something 99% of people cannot do.

Our products are unique and they are created to last a long time. Quality hardwood will not break down under normal conditions. This means steady use with reasonable care. If you drop one of our boards on a hard floor it won’t break, if you slam it on the ground, it may. However we take every precaution to educate our customers on how to care for their products to get the best use and greatest satisfaction for years and years.

So as we set our prices, adjust to the times and market, factor in our unique expertise, and continue to learn from our customers and others. We establish the exceptional workmanship of our brand. We put our reputation on the line with each piece we make; but we do so confidently because we know that every piece of every product was put together carefully by a master carpenter.