Episode 11: The Price is Right?

Money. Money money money money. I say it out loud a lot because I hope that by repeating it over and over again, we’ll start to break down this apprehension about talking about MONEY.

Money money money.

You make something you love making—you pour your creativity into it. And it’s hard to take a creative baby and then go and ask someone you give you money in exchange for that baby. It’s your baby! But that’s what business is all about. Your product and your story communicate value to someone else, and in return, they show their appreciation for that value by handing over money. That money then sustains your ability to continue to create, and the cycle begins again. Money isn’t icky, it’s what enables you to keep doing what you want to do.

But what should you actually charge for your products? That’s the age-old question, and most people are looking for a quick, easy solution. An equation. Something that will let cold, hard math do the calculations for them so they don’t even have to think about it. But math alone doesn’t know your story and doesn’t know your products that well.

The truth is, there is NO magic formula! Some formulas may work better than others for some people and some products, but there’s no one solution that will solve all your pricing needs. Why? Because price is PERSONAL. The handmade economy in particular offers a personal connection between the customer and the maker, and that’s hard to put a price tag on.
So how do you know when the price is right?

I think the price is right when it pays for you to run your business, when it pays you enough in profit to contribute to your financial goals, and when the customers buying it feel confident in their purchase—no doubt in their mind that they might have been ripped off and no smirking as they walk away thinking they’ve found a steal of a deal.

Pricing is complicated, because pricing handmade goods is a creative act. But the more you understand your business’ numbers, and the more you understand your goals, your customers, and the value you’re bringing them through your connection and your creativity, the more confident you’ll feel about pricing your work.
 

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Episode Guest

Kristen Pumphrey is the Founder and Creative Director of P.F. Candle Co., a home fragrance company based in Los Angeles, CA. Kristen co-owns P.F. with her husband/business partner, Tom.

After graduating from NYU with a BFA in Acting and Creative Writing, Kristen pivoted to a career in the publishing industry, where she worked at a craft magazine writing about DIY projects and the burgeoning maker community. When the magazine folded, she took it as an opportunity to relocate and try her hand at making things for a living. The company has expanded rapidly since the launch of the signature amber jar candle line in 2012. P.F.'s team of 22 makes, ships, and sells, all under one roof in East Los Angeles.

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