Wow, I can’t believe we’re already five days into April! Now is the time when many of you are busy preparing for the start of the outdoor craft show season, or perhaps finishing prep for a May trade show. (Or maybe, like me, you’re starting to think about your product line for one of the many August trade shows.)
Whether you’re prepping for shows, or just looking to spruce up your Etsy shop, now is a good time to look at your current product line and see where there are gaps in price points. Adding products at new price points is a great way to appeal to a broader range of customers. Even better, it’s a great way to increase sales of your existing products.
Let’s say you currently sell $20 earrings and $50 earrings, and you sell the most of the $20 dollar pairs. But what happens when you add a $100 pair of earrings? This should actually increase sales of your $50 earrings. By adding an additional price point, not only does this make the $50 earrings seem less expensive, it makes them the safe middle choice. You might not sell many of the $100 earrings, but you should see sales rise for the $50 style.
In Priceless: The Myth of Fair Value
Ideally, you’re goal is to get your customers to move up the ladder to a higher priced item. (After all, isn’t it easier to sell four $50 items than ten $20 items?) But most customers aren’t going to feel comfortable shopping at the high end of the ladder. By adding a new product at a higher price point, it makes your other items more appealing in comparison. (And if you do happen to sell one of those higher price point items, that’s even better.)
So this week, take a look at your current product offerings and see if there’s an opportunity to introduce a product at a new price point. It might just lead to a boost in sales.
I heard the interview with this guy on radio national last night and it was very interesting, I made a note to hunt it up and read it! Thanks for the post reminding me!
This looks like a great book – I’m adding to the list! I’m not sure about his theories, but I can tell you that when I diversified my price point ranges my sales increased accordingly. I now have a goal to have items in each “decade” of pricing from $20 – $100. I then spread out items from $100 – $500 (my current high end) to make sure I have all my bases covered. I think it’s easier to upsell with a wide range of price points – for example lsomeone is initially interested in the $20 pendant, falls in love with it, then decides they need the $80 bracelet to go with it!
We were just talking about this in an Etsy Virtual Labs discussion the other day. I agree — it’s very important to have items with a range of prices. Thanks for reinforcing the message and for the link to the book. I’ll have to check it out.
I have my first two shows coming up end of this month and next and have been trying to figure out what area of my inventory to focus on. Thanks for the tip!
Great tip, as always!
I just read an article for my Marketing class that discusses the psychology behind the pricing strategy of some luxury brands. It was published a few years ago, but I think you’ll like it.
Here’s the link:
http://online.wsj.com/article/SB118662048221792463.html?mod=hps_us_editors_picks
Great post, thanks!
so simple but so absolutely BRILLIANT! Thank you for this piece of advice! I’ve fallen for the huge middle-field of price when it comes to my prints… and am asking customers to ask me about different sizes etc when I know that you have to be REALLY interested to take that extra step. When selling on Etsy it’s so easy to feel that you sort of have to adapt to other people’s prices….. and I’m not sure how I can add higher price points. Bigger sizes? Limited edition? Or just… raise prices?
Thank you so much for this well timed advice!
I recognise this theory!! We have done this in the flowershop I worked in… why havent I thought about that for my own etsy shop.. wiltalakim.etsy. hihihihi
Thanks for pointing this out!!
NOt wiltalakim, but VILTALAKIM, sorry typo….
what 18th scale rc do you think would be or is the best my budget is 350 after taxes or close to it. also how long can I store a li-po on a full crhgae. I broke the speed control for my savage flux after a bad landing on the lid need to get a new one and a mini and try to keep it under 350 wife is really mad wants to kill me
Great post! I recognize the “anchoring” strategy and actually just started to implement it in my business! I do hope it’ll work for me too 🙂 *crossing fingers…*
I think it depends on what you sell and who you sell to. I don’t think I can even add anything more expensive than what I have unless I invent an entirely new pet product. I can make ferret hammock sets, but I haven’t had much luck selling them unless I get a custom order. My price points do have gaps. $6, $9, $12, $14, $20-35, and then $60 for the bedding. I was thinking of making everything in denominations of 5, but I don’t want to short-change myself on the smaller, cheaper items or charge too much for what is now a $6 stuffed mouse.
This is really valuable food for thought. I have heard of price points, and now,
I know I have some research to do to truly understand the terminology.
I can see the logic behind this and will get to work examining my product
line.
Thank you, Megan!
This is a FABULOUS post!! I’ve been planning on adding some higher end items to my lineup for shows this month. This post gives me even more motivation to do so!
Btw, Megan, your blog is totally worth the precious little time I spend reading *anything* on the web. Thanks for producing such a great resource for us small business owners.
thank you Megan – I am always looking for tidbits to “think like a retailer”. This is definitely good advice. sometimes I question spending resources on higher end items because they do sell less frequently but if I don’t have them I feel like all of my product starts to look the same. so this reinforces the need for a nice variety of product and price points.
I had my website link wrong – fixed it here. thanks
This is a great post that I can completely relate to. Thanks for stating it all so clearly.
Studying and adjusting price points is a great idea! Our goal isn’t to “trick” customers, but rather to guide them toward the products that we want them to purchase.
I read another interesting book along these lines recently: Buyology: Truth and Lies About Why We Buy by Martin Lindstrom. Your readers might enjoy it. I found a copy at my local public library.
Keep up the great work. Your blog is so informative!
Yet another great post! I think also that this reinforces the idea that you can sell your more intricate (and hence more expensive) products at a price point that reflects the amount of work you put into them. Yes, it’s good to have $20 and $30 items, but if you’ve put more effort into a piece, it should be priced accordingly. I have a hard time rationalizing a higher priced item (despite the crazy amount of time I spent on it), but it would be great if that piece served as an anchor for the rest of the products (and if it helped sell more $50 products, too!).
Awesome blog – I read it every day because it is so informative. Thank you!
Alright then, Mike, let’s have it laid out on the table. For you to actually bevelie that Yuri Nosenko was a bona fide defector, you would have to bevelie that Anatoliy Golitsyn was lying to the CIA. Since I am not convinced that you even know who Golitsyn is, why don’t you explain to me why it is that you bevelie that he was lying to the CIA. A detailed explanation would be a rebuttal of his CIA handler, Tennent H. Bagley, and the former head of counter-intelligence at the CIA, James Jesus Angleton, if you’ve ever heard of them.Tell me, Mike, how it is that you know that Golitsyn was lying to the CIA, that Nosenko was telling the truth, and that the Russian government positively had nothing to do with the death of Litvinenko.Mike, either you are out of your depth, or you are lying on behalf of very bad men.
Megan, thank you for explaining the reason behind this strategy. It makes perfect sense and I am going to work at putting it into action in my etsy shops, local shops that sell my product, and at local shows.
Interesting point. I had covered the high end ($200+) and low ($60 and under) ends of the spectrum, but have recently been adding more products to the mid-range. Perhaps it’s the economy, but so far only the high and low-end items have been moving.
Thank you so much for this article! Brilliant advice! I’m so happy I subscribed to your feed!
It makes a lot of sense to me. I’ve felt the feeling myself – using the anchor to help me make a decision about making a purchase.
It is the comparisons we make that tell us if we’re “buying right.”
Thanks for the great information you share!
Linda
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