No small business is "too expensive"

8:00 AM


 


Earlier this year, I enrolled into the Creative business accelerator course conducted by Flammable Entrepreneur. A course I highly recommend to anyone running a small creative business or planning to do so. 

During that course, which was an 8 week long course with weekly live sessions, we had one class about pricing our services and offerings, and during said class, the truth bomb about the fact most entrepreneur underprice themselves fell. 

One of the reason we all tend to underprice our offerings is that we have ALL been told at one point by someone that we were too expensive. 

This is gaslighting and it has to stop!

On the behalf of all creatives and all small business owners, I urge you guys to Just. Stop! Stop telling a business owner to their face (or in writing) that they are too expensive, because the truth is they aren't. 

It's ok to not being able to afford something, or not wanting to pay a certain price for something, what is not ok is putting the blame on the business owner for your decision not to purchase from them. 

Quite recently, I was checking a picture on The Holderness Family's Facebook page where they announce they have designed Christmas PJs and are offering them for sale. 
The backlash they got in the comments was wild! Too many flamed them for the price tag pretty much insinuating that they were ripping people off, others told them that if they planned better they could have offered them cheaper (but didn't give them a solution or the name of a manufacturer to do so), and many pretty much compared their high price to Disney's who are making much cheaper pj's and would not bankrupt a family.

We are living in a world where small businesses owners are constantly pitted against big manufacturer that print millions of t-shirts in a factory in China simply because people have been trained to accept "cheap" as the benchmark price for everything and also do not understand a thing about sales volume and profit margins. 

Price per unit decrease with high volume

When you see a mug priced for 10$ in a big box store, it's easy to think Society6 selling them at 20$ full price (but more often at a discount) is expensive. Or that the seller on Etsy charging 15$ plus shipping is ripping you off. 
The reality though is that the big brand store has ordered hundred of thousands units of that mug and is relying on sales volumes for profit. 
This means they can have a very slim profit margin, and still make it worth something. A small business owner CAN'T do that. 

Society6 which is a print on demand company that pays artists their due is a biggish company, but they print on small scale. They are not going to print 5000 units of each of their product and hold inventory in hope that will sells. They also do not own their own printing factory, they work with 3rd party fulfilment centers around the world that are fine printing 1 mug at a time. The printing service will charge them a high price per unit though because they are after all just printing one mug, with one specific design each time Society6 tells them to do so. 

Out of the 20$ MRP Society6 will pay the artist 2$ a mug, regardless of the price at which they sell the mug. 
As an artist, this means that I earn 2$ on each mug (10% royalty is a standard in the print on demand industry) even if they decided to sell mugs at 13$ during a promotion. Not all PoD companies are as generous as them here. With others I get paid my due on the actual sales price. 

Covering the artist fees is not the only thing Society6 needs to cover in their prices. They have employees of their own to pay, and for that, they actually rely on sales volume too. 

Now let's take an Etsy seller who decided to print their own mug and ship at their own cost. Even if the seller was holding some inventory, it would not be more than a 100 pieces, and that would be assuming there is a market big enough to make it worth it, it would still cost them a lot more per unit than it would costing a big box store to print 100k units.

The Etsy seller would also have to worry about proper packaging, and shipping all which will add to the price and they would have to top it all with a profit margin that make their time and effort worth something. Especially since they can't rely on high sales volume to make a living.

All this to explain you can't really compare a mass produced item's price to the one a small business will charge for something similar. 

It's ok to not be able to afford something

Once, somebody told me my prices were too high and I should stop promoting my products for that reason. I also had people telling me I have no "rights" putting some content behind a paywall on Patreon because there are some people in 3rd word countries that can't pay those prices. 
I asked them "Would you march into a Louis Vuitton store and throw a fit about how "expensive" they are?" 
I never got an answer, but I doubt they would, yet that same type of people think we small business owners and creative actually OWE them affordability. 

We all have a certain target audience, and if one can't or simply don't feel like paying our prices, it simply mean they are not part of said audience. Something that frankly, as an artist, I am totally fine with. 

Honestly, I'd rather be told "I love your work but I can't afford it right now" or "It's a bit out of my price range" than being told "You are too expensive" or "Are you kidding yourself with those prices?" or even "Get a real job and stop charging people for your art"

How you react about a price tag says a lot about who you are

Saying "You are too expensive" is a convenient way to blame someone for your own shortcomings, it becomes no longer your problem but the small business' problem. 
When I hear that, I hear a person who is unable to bear a shred of responsibility for their actions and choices. 

A person telling me "I can't afford it right now" is a person who understand that what I have to offer is not in their budget, but still respect and understand the value of my work. It's a person who even though they might not buy now, might buy later and is more likely to spread the word among their friends about what I do. 

One of the thing we all learned in that pricing class on the Creative Business Accelerator is that a person who says "It's too expensive" is also the type of person that would not even buy it if you were offering an on the spot 70% discount. A person saying it's too expensive is just looking for an easy way out without bearing any responsibility.  In short, they are very likely to be the type of person that would not buy it anyway, no matter what your price is. 

Sadly, it still hurts feelings

We small business owners are people too, we have feelings and we are taking risks in our business everyday, we show up even if nobody is around to see it. We put our 10000% into what we do. Most of us eat, drink, sleep and dream our business, we don't work on a clock. Sometimes we pull long hours doing what we love doing and like all people we want to feel a tiny bit of recognition for our effort. 

Phrases like "You are too expensive" or "Your prices are ridiculous" or "Who do you think you are?" hurt our ego. It's a crass punch in the gut, one that may make the person saying it feel better about themselves but leaves us doubting our own value. 

You may have said those words without malice, but it doesn't mean those words don't hurt. I get it though, we all grew up in a world where we got conditioned to accept "cheap" as a gold standard without looking at what goes behind the price. That doesn't mean it should keep on going. 

We need to unlearn that behaviour and replace the urge to say a price is ridiculous with saying "I am not the type who like to spend that much on xyz".

We all have different priorities in life really, and we all splurge more on certain things that others might not. 
Myself, I am more likely to splurge on a handbag than I am on a pair of shoes. I don't care at all about makeup (and don't own any) but I care about a quality face cream. I love looking at Louis Vuitton and Dior bags even though right now I can't afford to buy one. It would never ever cross my mind to even call those brands overpriced though, I know the level of craftsmanship that goes in them. 
We can still admire something we are not YET able to buy. 

Let's all remember that next time we see a price tag we aren't ready to pay. 

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