I’m so excited to be writing a Vendor Tips Series for Renegade Craft Fair. Below is an excerpt from this month’s article: Is your product worth more than your price?
Is your product worth more than your price?
I was meeting with a woman who has a fantastically delicious bakery, and she brought me a cupcake, which obviously, I was delighted to eat. So there I am, savoring away at one of the best cupcakes I’ve ever tasted, and we’re talking about her business. She says she’s making less income than she expected, and she doesn’t know why.
We’re trying to diagnose the problem, and with a mouthful of cupcake, I innocuously mumble, “ok, so how much did this cupcake cost you to make?” which probably sounded like, “ok, so how muh dih this cupcay coss you to may?”
She responds with something like, she isn’t sure, but maybe around $1.00. But in my head, the business emergency sirens started sounding, and I remember it as something like: “I don’t know how much my product costs, so I’m not sure how much to charge, and I don’t really know how much money I need to make to stay in business.”
And we had diagnosed a problem in the business ER.
Certain bricks serve as the foundation of your business, upon which all other business bricks are laid. These are the cornerstones, the vitals, of your business. The unit cost is one of these, because the unit cost serves as the foundation for pricing your product. […more]