Okay, so it’s week 3 and you have taken my advice to get going on your website. You’ve accessed your resources and created awesome product pictures, but now what? We have products, we have a website, but do we know what to charge? There are a lot of expenses that we have to consider when we are coming up with our prices. Stay with me now, it’s about to get intense in here! A good way to start is to list out the supplies, the equipment, labor and the location costs. You can normally calculate your basic expense for a particular product by listing the blank products you need to supply such as a T-shirt and the paper and ink for sublimation.
Figuring in cost for equipment: Say you paid $500 for a heat press and you want to figure out how long it will take to recoup your money. If you add $2 to the cost of each T-shirt you sell it will take you 250 t-shirts to pay for your heat press. If you sell an average of 50 shirts a month it will take you 5 months to pay off the heat press. If this is acceptable to you then keep the equipment cost at 2 dollars per shirt. Any shirts you sell after that, the press is paid for. I would not recommend lowering your price of t-shirts after that because you will need to buy a new heat press eventually if that one goes out and a little extra profit is also really nice.
Location costs: A lot of small businesses are co-joining space with a personal residence or another business. This is a smart business plan. I once wanted to create a product line called “Top Floor T-shirts” because the space we were using was the top floor of our home. It was perfect for the sublimation products because all the heat naturally rises to the top and keeps the bottom floor cooler, I digress though. Often we do not think to figure in a location cost if we are using a room in our house or our garage. We justify this by saying we would have to pay for the space anyway. True, however that is space you could use for something fun like a woman cave! Is that a thing? Yes, yes it is, and it’s taxable. That means that you are already paying tax on it but you can get a tax write off for a certain percent of your home if it is used for your business and you claim it (sorry those pesky lawyers make me add this disclaimer here: ask your tax advisor as I am not a tax advisor and this is not tax advice). Also, if you did not have that space available you would need to pay for other space. This means if you do not include an amount in your products for location you are creating a false low for your pricing. This likely will not be sustainable if your living or other business situation changes.
Labor, the forgotten factor in a small or home business! If you are making products yourself you still have a labor cost! If you were not making products you could be working another job and getting paid; there is an expense even if you are doing the labor. An easy way to figure in your labor is to just multiply minimum wage by the amount of time it takes to make your product. Of course did you really get into business to make minimum wage?
Getting your pricing right is really important to maintaining a viable business! If you have stayed with me this long you are a rock star! So, always check your pricing to make sure it does include a profit. I like to be able to at least double my money to cover expenses and insure I am making a profit (raising 3 kids does not pay for itself, lol).
That’s all for this week, let me leave you with this. I’ve met so many small business owners that sell themselves short and undercharge to the point they are basically giving their products away. Do yourself a favor and do the research, calculate your costs and offer quality products that your customers will love, value and return for more.
Pro Tip #2 – Product Pricing
This week we are looking at pricing so our Pro Tip is going to cover basic price changes as well as some more advanced ways to work on your pricing, let’s get started!
So odds are you are already aware of how to change a price of a product within your shop, but I’m going to do a quick refresher for those that are just getting started. To edit the price of a product, open your website Dashboard and then click on Products to view all your products, hover over the product you want to edit and you’ll see a menu appear, click edit to open the product properties screen.
Scroll down the page until you see the Product data box:
As you can see, under the General tab, you have all the available pricing options. Just enter the price of the product where it says “Regular price ($)”, be sure the click the UPDATE button to save the change. That’s it, your product now has a new price.
Of course, running a store means having sales, offering specials, etc. Anything to entice your site visitors to not remain visitors but become paying customers. Notice you have some additional fields you can add prices to on this same tab. Leave the regular price (it must always have a price or the product cannot be purchased) but add in a Sale Price which will now show the regular price marked out and give the customer the new sale price. What even more, add a MSRP price which is higher than your regular price to show customer how much they save even at your regular prices from the MSRP. The purchase price field is there ONLY for you as shop owner to see and is never shown to your customers. Add the price YOU pay for the item and your shop can show you how much profit you made by selling the item.
Remember I mentioned sales? Did you know you can schedule a sale in the future and it will automatically activate and deactivate according to the schedule you set?
See that tiny link next to the Sale Price, click that to open the options for sale pricing. Two new fields will now appear under the sale price.
Add the date you want the product to go on sale and then the date you want the sale to end and let your website take care of the rest. Again, don’t forget to UPDATE or you’ll lose all your work!
BONUS TIP: Bulk editing product prices
Imagine your distributor lets you know the price of all cups are going up by 10%. The price is to much to absorb so you need to edit all your cup prices and increase them by 10%. Sure you could go one by one using the process above but if you have a lot of cups that’d be lots of work. No fear, there is an easy way to manage this.
Bonus Bonus Tip: This method works on more than just prices, you can bulk edit many other things using this process.
First, from your Dashboard, click Products>>All Products. Since we are concerned only with drinkable products let’s use the dropdown sort to filter out other products and only display our drinkables.
Select the Drinkables category and then click the button, Filter to apply.
As we are needing to select ALL our products in this category, just click the tick box at the top of the table in the header area to select all the products listed on that page. Note, if you have too many products to display on this page you’ll need to do this process again and again on each page until you get all your products.
You will now see that all the products on the page have a checkmark in the box at the beginning of the row.
Now the fun begins…click the dropdown Bulk actions and then select Edit, now click the Apply button.
You will now have the BULK EDIT screen. Be careful ANYTHING you change here will be applied to EVERY product we have selected before entering this page.
Since we are needing to change the regular price of these selected products, lets click the dropdown box labeled PRICE to take a look at the available options.
Notice there are 3 options we can choose from,
- Change the price, this option allows you to set a specific price. Say you want every selected product to be $10.00, you’d select this option and then enter 10.00 into the Enter price ($) field.
- Increase existing price by (fixed amount or %), since we are planning to up our prices this is the option we will be using.
- Decrease existing price by (fixed amount or %), this allows you to lower the price by a percentage of a fixed amount.
So we will select option 2 and enter 10% into the field to change the price of all selected items by ten percent. If you want to instead increase the price of the items by say $2.00 each and not use a percentage, just enter the 2.00 into the field without the % sign.
Take note of the other options you can bulk edit from this area, this can come in very handy when you need to make the same change to a lot of products.