If you’re struggling to figure out how to price on Etsy, that’s understandable.
Finding the right price isn’t as easy as crunching a few numbers. In fact, finding the right price for your product can not only make your product sink or swim, but it can also (and, in fact, should) have a bearing on the entire way that your Etsy brand presents itself to the world.
Some brands establish themselves on the market with a premium product. One that has no competition. Because the product is so unique and of such a high quality, that nothing comes close.
Other brands are built on the fact that they’re the first to catch onto a trend (we’re looking at you, fidget spinners). They make a wide variety of them available at an absolute dirt-cheap price.
Other brands sit in the goldilocks zone – ok quality at an affordable price.
Knowing these three positions, suddenly pricing a product on Etsy is even more challenging. But in this article, you’re going to see exactly that.
You’ll also see:
- How to price on Etsy
- Market vs competitive pricing
- Using Marmalead to find the best price point
Let’s dive in.
Market vs Cost-based Etsy pricing
There are two common ways to price a product on Etsy. They are the market-based and cost-based methods.
Cost-based pricing is used in many industries, not just Etsy. It’s the process of establishing the cost of a product based on how much it costs to make (both materials and time), and then adding a percentage profit. Profit margins can be adjusted to keep up with demand, move old stock or change a brand’s image.
If you’re not sure how to price on Etsy in order to establish the long-term foundations of a brand, market-based pricing is without a doubt, the best way to do so. That’s because the overall profit you want doesn’t affect the sale price, nor does the cost of producing the product. With market-based pricing, the overall profit depends on where you position your product in the market.
Position your product as a cheap bargain, and you may get more sales but make a smaller profit. High-end pricing higher profit margins but fewer sales – a great way to leverage the buying psychology of exclusivity!
You can learn more about the differences between these two Etsy pricing methods in episode 8 of the Etsy Jam.
Now you know the difference between the two most common Etsy pricing methods, here’s how to use market-based pricing to establish a price.
Position your product before your pricing
The first step in establishing market-based pricing for your Etsy product is to know how you want your product to be placed.
Is your product a cheaper bargain that’s priced competitively in order to sell more units? If yes, then your product needs to be priced in the lower end of the spectrum.
If your product is positioned as being more premium, then your pricing will obviously be at the higher end of the spectrum.
Placing products at either end of the spectrum has its pros and cons. It’s important to know that being ‘averagely’ priced isn’t always the best method. Most often, people want quality or they want to part with as little money as possible. Rarely is there a happy medium and it’s not profitable to find that price, either.
If you decide to price your product at the lower end of the spectrum, your goal is to move a lot of product (while making a profit) by selling at the lowest price on the market. When you achieve this, it’s an indication that your product is priced accordingly.
If you’ve implemented premium pricing on your product and find people are complaining of the costs, but others are still buying it, then your premium market-based pricing is pretty good.
How to price on Etsy using market-based pricing
Once you’ve established where your product is based, it’s time to assess your competition. If people aren’t buying your product, they’ll be buying the products of your competitors. Seeing what’s already out there is the best place to start.
Take a close look at products that are positioned at your end of the pricing spectrum.
For lower-priced products, assess what other value is added to the sale. It’s common for lower-priced items to be available in a wide variety of variants (such as color or sizes). These are often ready to be sent as soon as they’re paid for. Express shipping or free shipping is another way that lower-priced sellers compete against each other.
For high-end products, look at how the seller justifies the premium pricing. Chances are that at the higher end of the spectrum, you’ll be made to feel like you’re buying from an established brand. Rather than buying ‘just’ a product, you’re buying an entire experience around that product that makes you remember the name of that brand. This is a common way for high-end brands to establish that ‘premium’ pricing, as it also fosters return business.
Using Marmalead to find the best Etsy price
If you’re still not sure how to price on Etsy, Marmalead’s pricing chart and market position feature is a quick and efficient way to give you the information you need to effectively price your products.
Simply enter a keyword, and Marmalead will check the pricing for each and every product with that keyword. Then, you’re presented with a bar graph to showing the number of listing over the entire spectrum. This not only shows you how much each product is priced but also how much competition there is at that price point. After running Marmalead’s pricing chart and market position tool over a few of your core keywords, you may find opportunity by placing your product at the other end of the spectrum.
Learn more about Marmalead’s Pricing Chart and Market Positioning here.
If you want to use Etsy to build the foundations of your brand or turn it into an effective sales channel, implementing the right pricing strategy is crucial. Marmalead takes the confusion and the math out of doing that.