393 – BOOST – Pricing for Retail and Wholesale with Gail Berardo

Gift is Unwrapped.

Episode 393 Production time.

How is that figured out?

Cost-wise? Attention,

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Here is your host Gift Biz gal,

Sue Mohe.

Hi there.

It's Sue and it's your lucky day because you've landed on

another Boost episode.

This is a new show format that I've recently introduced.

A boost is your chance to listen in while I address

a current issue faced by one of your fellow handmade makers.

Have you ever stalled in one area of your business where

if you could just get past that block,

it would open the path to new business growth?

That's what this is all about.

To give a boost and clear the way for the next

big move.

At the end of the show,

I'll tell you how you can sign up for your own

free gift bus boost.

Today we're talking to Gail Baro.

Gail's been in business for quite a while at this point,

working it around her full-time job.

Now that she's retired,

she has more time to devote,

to build upon what she's already very successfully started.

I love this idea of developing and working on your brand

on the side with the intent of retiring into something that

you love.

We're gonna focus on doing just that.

Wholesale has been Gale's sales strategy,

which she will continue to pursue,

but she'd like to add direct to consumer sales into the

mix as well.

She wants to get out and interact with people.

Towards that end,

we get into a detailed discussion about pricing,

how to make sure she's set up properly for retail and

wholesale, and you'll hear a strategy of positioning pricing.

So it fits with Gale's intended lifestyle moving forward too.

Take note,

while we're talking about how Gail,

from the very beginning niche down to a very specific product,

this naturally directed her into her ideal wholesale targets and will

also serve her beautifully.

For this next stage,

let's listen together as I give Gail a boost.

Today we're gonna be talking with Gail Baro of Eve Michael

Designs. Gail,

welcome to the Gift Biz Unwrapped podcast.

Thank you,

Sue. I'm so excited to get into this topic.

We're not gonna tell everybody what it is yet.

We're gonna wait,

wait for a second.

Okay. But it's something that a lot of people either know

they aren't getting right,

are struggling with,

take a shot in the dark,

like all this type of thing.

So it's gonna be a great one to dive into.

But before we do that,

share with us a little bit about your business when you

started, how you've evolved to where you are today.

Let's go with that first.

I started about six years ago and I started immediately with

wholesale. Right now,

after everything has evolved,

I make little girl denim jackets.

They're all embroidered and embellished and handmade flowers,

hand painted sections of them and that pretty much it.

I also do adult jackets,

more artistic and more painting.

But my core thing is little girl jean jackets And they're

absolutely beautiful.

You sent me a download of your wholesale sheet so I

got a chance to see your work.

It's gorgeous.

Thank you.

You were alluding to that's what you're doing now.

What did you start with?

I started about six years ago thinking towards retirement,

and so I thought about doing bows.

To be totally honest,

I have been in some kind of artistic thing forever and

I did a lot of flowers,

I did bridal flowers,

all of that for quite a few years and whatnot.

And I thought,

you know,

doing little girl hair bows,

which were so popular,

might work well,

so it did ok,

but it didn't feel like it was going to be successful

enough. There are some major ribbon companies out there and it

just, I wasn't able to compete so slowly it evolved to

different things and the jean jackets have really taken off in

the last three years.

That's a great thing in and of itself,

is that you don't always land on what you want to

do for your business right away.

Exactly. You know?

Cause part of it is what do you like working with

making selling?

You know what energizes and excites you because if you start

a product just because you wanna make money and your heart

isn't in the product,

it's never gonna work.

Cuz you're never gonna be passionate enough about it to put

in the time.

So true.

Yeah. So I think that's great that,

you know,

you tested out a few things and you landed on the

jean jacket.

I love that you've got a very unique and wonderful style

and I,

it's so oriented to children,

so that's perfect.

And I think that one of the things you have going

for you already,

there's a couple of things,

but since we've already talked about it a little bit,

is the fact that you've niche down to that it is

specifically children's gene jackets.

Yes. You add in adults also,

but your true focus is children's jean jackets.

Yes. I've been lucky enough to have a few really good,

they're high end boutiques that the jackets are not cheap to

purchase. Like they sell them at a decent price.

So I'm able to sell to the wholesaler at a decent

price and they mark them up considerably obviously.

They mark them up a hundred percent.

Yeah. All right,

so we're going to talk about that,

right? For sure.

But so you've have not had a lot of trouble getting

into upscale children's shops?

No, and it's been great.

Yeah. So I mean,

you've validated your product right from the start because you've got

small businesses who want to buy it and sell it in

their boutiques,

so that's amazing.

And so have you just retired now?

Just two months ago.

Okay. So exciting.

It is.

And so care to share with us what your full-time career

wise, I was the executive assistant to the chairman of surgery

at the major hospital in the Detroit area Medical.

Okay. And that sounds like you needed a lot of organization

and coordination as skillsets for your job.

Oh, yes.

That's wonderful too,

because that you'll be able to apply as you continue to

build your business too.

Absolutely. Yeah.

And so share with me a little bit of how much

time you've been putting into the business,

you know,

where it's been and how you've been servicing your wholesale accounts

up until the point that you retired.

When I started doing wholesaler,

my entire little business,

I immediately went into trade shows,

small local trade show that they had twice a year.

And that was the way that I got most of my

little account.

So it was a trade show in terms of the people

who were walking the show were boutique owners.

They weren't customers.

Exactly. And I also would basically cold call,

I called many,

many, many boutiques to see if I could drop by,

show them some of my things.

I had no problem traveling two hours to see a boutique,

and I got sales every single time.

Oh wow.

So in person selling is good for you?

It is,

yeah, it really is.

And I have done craft shows 30 years ago for another

product, so I have no problem meeting people doing that.

So it's been good.

It's been very good.

And it's slowly,

I mean,

I'm in the Michigan area,

I have boutiques in Florida,

I'm in Indiana,

Ohio, so it's nice.

Yeah, it's worked out well so Far.

And it also sounds like the in person,

whether you're selling to wholesale,

where you're walking in and they're getting a chance to see

the jackets,

I think really helps towards the sale.

Right? Completely.

Yeah. And then you've done face to face to consumer,

which is also awesome.

And I know we're gonna talk about that a little bit

too. What do you specifically want to target in on today?

All right,

so I know my boutiques,

I know my product,

all of my raw materials are upcycled.

All of my jean jackets I buy used,

I wash,

you know,

do whatever to them.

After that,

I don't change buttons,

I do change the label because it's my label.

But that's part of what's important to me is to upcycle

and be a little gentle on the earth.

So with that though,

there's no guarantee that someone will buy when they purchase a

jacket, other than purchasing a size that I always tell 'em,

You'll get the same look,

you won't get the same jacket.

I can't guarantee it.

Right. And it's important.

Again, most of my,

all my customers are very happy with being able to do

the upcycle,

the recycled type of things.

Right. Where are you finding the jackets?

Off and on?

Thread up.

I have hit every Salvation Army and used clothing.

I try everywhere.

Right now I probably have a hundred little jean jackets in

my workroom,

so I constantly purchase so that I'm not low on my

stock. And then after that,

everything is made to order.

So you don't run dry on jean jackets?

For sure.

No. Although I have noticed that the pricing has gone up

considerably. Even for used jackets,

when I first started,

I could get a jean jacket for five to $7.

They're up to 10 to 12 now.

That's the nature of the economy right now.

Right? Oh,

is it ever?

And You need to apply that to your numbers as well.

Unfortunately, we all do.

Or you're not gonna have a business,

or you'll just be churning the product and breaking even if

you're lucky.

Exactly. And that's not what I want.

Yeah. So we wanna target it on pricing,

right? Yes.

I have a simple question.

It's, I sell my jackets for 35 to $37,

depending on quantity Wholesale.

You're talking wholesale pricing right now?

Wholesale. But when I wanna go in person craft show,

all of that,

I know that my boutique sell them for 70,

80, $90.

Okay. Which is wonderful.

But is it ethical or good business to undermine my boutiques?

I don't want to go to a craft fair and sell

them for $60 when I know that they're selling for 70,

80, 90.

Yeah. But I also feel that my market for craft shows

is not going to be as open to 70,

80, $90.

I may be wrong and I hope I'm wrong.

Yeah, you may be wrong.

And I do think it's part of a strategy in terms

of what your pricing looks like when you're selling direct to

a customer versus when you're selling to a wholesaler.

You had mentioned to me in some of the pre-information that

you provided that you're also now starting an e-commerce site.

So I think we'll talk about that too.

So your wholesalers will see you and see pricing that you

are offering to the general public,

and we're gonna cover all of of that.

But I think the very first thing is not as much

from an outside look in what will the market bear,

but we need to start with what should you be pricing

at based on the costs of making and everything,

Right? What are your costs initially?

And from there,

the numbers kind of lay out nicely.

Okay. So have you ever done that analysis in terms of

really looking at your product and how much it's costing?

I call it build of materials.

Yes. I definitely,

I know What's included in that,

Included is the jackets,

which I have at,

I priced them all when I'm figuring out my costs all

at $15.

I thought you just said that you are getting them for

five or $7.

Yes. But I can't guarantee that.

So if it's not always a guarantee,

I feel that it's smarter for me to look at it

at a $15,

which is extremely high.

That is the top that I will,

I don't get any of them for $5 anymore.

They're always about 10,

10 to 12.

So 15 is not crazy.

Then the material that I use for applique,

for embroidery,

for thread,

for paint,

I seriously break it down into every single thing.

What I don't think I'm good enough at is my time.

Okay. It takes a couple hours to make a jacket.

And now,

don't get me wrong,

I can batch so that I can paint five jackets at

one time.

You know,

boom, boom,

boom, embroidery.

There's no batching.

I have a number of embroidery machines,

so I can do two to three at a time.

But I know it sounds ridiculous.

It sounds like you should be able to throw it on

an embroider machine and walk away.

There's no throwing it on and walking away,

it's just not done Right.

That's right.

Okay. That's pretty much,

And as for shipping and whatnot,

that is included in my,

I charge shipping to my customers,

to my boutiques.

Okay. All right.

So if you think of the jackets that you offer,

some of them have the,

we call it an apple,

and then it's embroidered around the A.

Some of them you add a little bit of paint in,

et cetera.

And flowers that I hand make Yes.

That you hand make.

Ooh, I gotta look at that.

Okay. All right.

So if you were to just a gut feel now,

Okay. If you were to think of,

let's just say five jackets that you make or 10 you

tell me which is better.

Well, we could double it.

So let's just go with five.

What percentage are those different types of jackets?

Because obviously production is different for each of those.

So if you were to sell five jackets,

if you think of all your sales,

so not just a single shop,

but all your sales,

and I know this is just a gut feel.

How many of them have those handmade flowers that are applied

versus applique versus paint and stitching?

I would say 60% have have handmade flowers and lace.

But the handmade flowers,

yeah, all of this,

because it is little itty bitty baby jackets or children's jackets,

they're all very small amounts.

So when I make handmade flowers,

I am able to make a hundred or 50 and that

will last a lot.

Ok. I will put three or four on them and I

do, I think what I sent you didn't represent front and

back. I do front and back.

No, I see front and back.

I see front and back.

And I'm looking at the ferry ones,

which is probably,

Yeah, those are your handmade flowers.

Okay. So you're batching,

so that's good.

You're batching,

these are so pretty,

you're batching some of that.

Okay. So let's stick with this in the pricing idea.

So if we were to talk about,

let's just go with the percentages.

So 60% include handmade flowers and then where's the other 40?

How does that play out?

The other 40 will have just paint or that just,

some of them will have like my little sailboats.

How many would have just paint?

Just paint.

None. Okay.

None have just paint.

They will have just embroidery.

But no flowers,

no crystals,

no rhinestones.

How much would be embroidery?

Only 20% maybe.

Okay. And so then the other 20 is embroidery and paint?

Yes. Okay.

An idea for you in terms of figuring out production and

you might actually have to physically do this,

you know?

Okay. But if you were to make,

let's say,

because you can batch and when you batch,

are you batching,

not the individual,

but when you're actually putting it into a jean jacket,

are you batching three at a time or comedy?

Oh, I batch only the paint that I will put on

it. So if you'll notice some of the corners or whatever

there's paint like medallions or whatnot,

I will batch that only each jacket I do individually up

to embroidery I have to do individually.

I can't really batch them.

And as for doing the lace and the flowers and the

rhinestones, I usually do them.

I can do two at a time,

but that's about it.

Can't batch big time.

Okay. So we're back to then really backing certain elements of

the production as much as you can.

As much as I can,

which is not a Lot.

Okay. So then,

because where I was trying to go with this is how

much time does it take when you have the handmade flowers

versus the embroidery only versus the embroidery and paint?

See where I was going with that?

Yeah. And then I was trying to,

let's say handmade flowers was two hours,

cuz you referenced that earlier.

But embroidery only per jacket is one and a half.

The embroidery an entire is about,

I would say embroidery only per jacket is probably about an

hour. Okay.

By the time doing all of the stuff to it.

So, And is it true then that the handmade flower one

is double that two hours?

The handmade flower one?

Actually no.

I mean I suppose if I took,

I don't think about that at all.

And I'm actually making a jacket because I've made the handmade

flowers always ahead.

I have an entire containers filled with them.

All of the additional embellishment really only it takes about another

hour because not only I don't just glue it on,

I then hand sew it on so that if a parent,

which I'm assuming most of them will need to wash it

at some point the flowers won't come off cause they're only

glued. So I glue and stitch all of my stuff.

So let's call that production one and a half hours.

Okay, that's good.

Just for,

to put something on paper,

you know.

And then what about embroidery and paint?

Embroidery and paint painting,

if I,

my batch,

I can do quite a few in about an hour And

then you go back an embroider on top of that.

Then I go back an embroider and a lot of this

is in stages.

So the paint I do one night or one day,

go back the next day,

do the embroidery and then finish it up later that day

or the next day.

So two things,

and this may be something just to think about as you're

doing production because these might not be the right numbers but

Right. They might be,

you know,

so it's somewhere to start,

you know,

like if you have a number on paper,

then you can say,

yeah, okay,

true or false,

you know,

but at least you're starting with some type of a target.

So based on the conversation that I just heard from you,

embroidery only takes about an hour all told given the batching

and non batching and whatever you're doing.

And then the embroidery and paint and your handmade flowers takes

between an hour and a quarter to an hour and a

half. Yes.

That's good.

If you were to try to separate them down just to

their own elements.

Right, Right.

Correct. Okay.

So currently you are pricing at a single price to wholesalers,

right? Correct.

This is just food for thought.

You might want to consider your embroidery only to be one

price and the others that have more embellishment to be a

little bit more because your production time is more.

Ok, there we go.

Yeah, Just a thought.

If you don't,

then I think if you decide no,

I wanna just price everything and make it easy and everything

one price,

then you can make more margin on your embroidery only and

a little bit less on your other ones if you were

at like one in a quarter hours for everything.

So that could be,

that's a decision point for you and only you know how

you feel about doing that.

But it might be nice,

especially if there to have those two offers,

you know,

like more the standard embroidery and then the one that's a

little more embellished because I think you might be leaving money

on the table if you price it all at the same.

And you also might be losing some wholesale or retail as

we or direct to consumer.

Cause as we talk about that,

because you don't have another option for them if everything's priced,

let Say.

Oh okay.

Right. Okay,

I understand.

Yes. Okay,

so that's production.

So we're talking either for a production price having two different

prices of your production cost,

which ultimately end up being a different sale price or Right.

Averaging it at like one in a quarter.

If you in the end decide that that's right for production.

Okay. Right.

Okay. And so those are the elements that you're currently including

in your price,

right? Correct.

Yes. Okay.

Let's go back and I wanna review this for a second.

I know with the cost of your jackets you're saying 15

and giving yourself a buffer there.

I would rather you look at your re like as close

to possible as your real costs as you can.

So I would bring that down to 10.

Okay. Okay.

And you'll hear why in a second then something that people

forget to add into their costs is acquisition of that product.

Okay. So if you're buying and they're shipping it and you're

paying for the shipping to come to you,

Yes, I'd buy enough every time for free shipping.

Perfect. Okay.

So that's fine.

What about if you are resourcing locally and you're driving to

get it?

Yes. Now that's something I don't take into Consideration.

Okay. So you could,

you know,

depending on how much of that you do,

you might have to consider that.

And it might be,

you know,

you pick up 20 somewhere averaging all of that out.

It might only be like a quarter,

you know,

like 25 cents.

But you wanna make sure that you're thinking about that as

a line item of how you build your pricing.

Because if ever where you're getting the jackets decides we're not

doing free shipping anymore,

then you're gonna have to think about that as in relation

to your price.

Right. You're right.

So I would do your jacket at 10 right now it

sounds like acquisition cost isn't really that much.

No. But consider it also,

what about the cost of back to materials?

Cuz we didn't finish up on that.

The paint and the thread.

Like you've got your jacket as 10,

what's your other costs?

My other expenses,

what I paint,

embroidery thread,

the way I break it down is the cost of the

jacket. Then the paint,

which I have,

like I said,

it depends on what I'm doing,

but paint I put at a dollar per jacket,

which is again,

it's really only,

it's pennies.

It couldn't be more Than,

Yeah you wanna put it in,

You know,

I do.

Okay. The embroidery thread,

again, you get a lot of embroidery out of us full

of thread.

So I consider that a dollar.

Also. Now if I do any heat transfer,

which I do very few,

I do it for a specific customer.

When I make specialty jackets or specialty t-shirts,

I can,

that's, I added $3 because it's,

it's a pretty Expensive,

So that's a special,

that's a custom price product.

So we,

that's, we won't worry about that for today.

Yeah. Okay.

And then your flowers And my flowers are probably 20 cents

each and I put,

so probably 60 cents to a dollar.

Okay. So we'll just say a dollar,

let's just round it all out to a dollar for that.

Okay. Production time we've talked about.

Then I want you to think about margin for you.

Okay. And the margin portion is the money that you're gonna

be able to use to reinvest in running your business.

Exactly. You're talking about putting up a Shopify site,

any an email program paying for entrance in craft shows,

materials that you need,

just like paper for your copier if you need that.

Yeah. All of those things have to come from somewhere.

And if you don't build them into the price of the

selling of your product,

where's it gonna come from?

Right, exactly.

Yes. And then money for you.

Right? Which is partially production since you're making,

cuz you're reimbursing yourself for your time in.

But you also should have some upside on top of that

because you're not just your time either.

Yes. You wanna think about that as well.

Just a little bit on the top side of every single

product you sell,

it might be $2,

it might be $5.

That's something we can get to in a second.

But you should have that as a line item.

So to review,

when you build up a price,

it's the cost of your materials for you,

it's your jacket,

the paint and thread and fabric,

any other enhancements that you use,

then that's one.

Two is acquisition,

which we're saying right now is kind of minimal for you,

but you wanna keep that in there.

Exactly. Third is production time per piece.

And this is never gonna be exact obviously,

but you can get it pretty close.

Right. And then margin,

which includes running the business and a salary for you.

You could even break out margin ads,

business expenses like overhead and then payroll or like however you

want. But I'm just making it simple and saying margin is

two things.

It's number one,

acquiring money to run the business and then also a salary

for you,

which is separate than paying yourself back for producing the product.

It's in addition to that Now production time,

how is that figured out cost-wise?

Perfect. Cause you're leading right into what I was gonna talk

about. Oh,

okay. The way you wanna think of production time is how

much would it cost you to hire somebody in to produce

the product instead of you.

Okay. Now obviously you are the designer,

you are the creator to truly pay for your time.

You would be more expensive than someone that you would be

bringing in training them to do any of the production.

Correct. But this is the way that to really zero in

and decide a cost per production.

I mean,

Gail, seriously,

you know,

if you start growing too much,

you doing them yourself are limited no matter what you do,

there's only a certain number of jackets you'd ever be able

to make.

Yeah. There could come a time,

and I know this is a business you're retiring into,

so you can judge how people wanna grow It.

Exactly. But you might make the flowers and let someone else

run some of the embroidery machines or do some of the

painting or do some of the packing and shipping or something

like that.

You know,

At least Yeah.

Portions of it.

It's not like they'll start making the jackets.

They might.

Right. So this also helps set you up so that if

you do want to grow,

you've got the money to pay that employee.

But because you've put money into the margin,

you're also paying yourself.

See how that all together.

Ok, that makes sense.

Yes. All right.

So if we were,

and you'll have to,

after we're done talking here,

go back and decide if you like these numbers and you

might adjust these numbers,

but this will help us get to a real true cost

for you with business development and overhead and all of that.

All right.

So let's say your jacket is 10 cuz we've averaged it

at 10.

Let's say acquisition is,

so I wanna put a number in there.

So let's say 50 cents for each piece.

Okay? Okay.

And Then your time,

again, this is a decision point if you want to break

it into two prices or not.

Right. But Your time,

I don't know,

I like to use a base of $15 an hour.

Okay. It's way under pricing you,

but if you price your time too high,

you're gonna overprice your product for the market.

Exactly. Yes.

So how do you feel about saying 15?

Yep. That that'll work.

Okay. So remember if you decide to go with two prices,

your embroidery only jackets would be at 15,

but your other two would be at 22,

right? Cause you're saying one and a half hours.

Yeah. Okay.

Now don't freak out as we build this up,

but let's just put in,

So let's back it up and let's say you're only gonna

go with one price.

So let's average it between the 15 and the 22,

let's say 18.

Okay. Okay.

So that's 18.

And then in terms of margin for you,

let's put it at,

for each jacket,

I don't know,

$2, two 50.

Okay. But let's do two 50 cuz then we're gonna end

up with a good even number.

Okay. 11.

So that's,

is that right?

Let's see.

Okay, so we are at $31 if I did my math

right. Yeah.

$31 a jacket is your cost.

Oh okay.

To produce a jacket.

This might be like a reality hit.

Well when I'm selling them for 35 or 37,

that Is okay,

well hold on.

Just this is just a number to know.

Okay? Yes.

Okay. And one way,

and have you,

have you heard of benchmark pricing before?

It's been so long since I did anything with sales.

It's been a long time.

I know the word,

but I don't Know.

Okay, so what benchmark pricing is your cost to produce the

product And then normally what you do is you double that

when you go to wholesale and then you double That wholesale

price again to get your retail price And you would pull

out the two 50,

let's say you don't include your margin in here because your

margin comes in when you're doubling Or Right.

Okay. But then that puts you at 15 or,

or let's see,

28, 30.

So it's pretty much or 28 50.

I'm sorry.

So this is giving you kind of a look at really

what your real costs are because probably you haven't been thinking

about your production time before in terms of paying for it

and charging for It.

No, I haven't.

That's exactly what over like that's 28 is the $15 that

I have been thinking that it's about.

Yeah. So hold on.

If we were to run this,

knowing these numbers,

cause there's another step here.

So it would be 28,

50, 57 and one 14.

And what these numbers are is 28,

50 is your cost to produce.

57 would be if you're gonna follow the benchmarking,

what you would sell to wholesalers,

they typically would double that.

Exactly. And as would you to sell direct to consumer at

114. Okay.

I can't imagine someone being willing to pay that.

And I like my work.

That's a lot.

Yes and no.

I mean it depends.

You're already talking upscale boutiques.

I am.

Okay. I am.

So, So now there is other ways to work with these

numbers. You're the business owner,

you can decide what your numbers are,

but these are reality numbers based on the conversation we've just

had. Okay.

Yeah. So here's where you can play with this a little

bit. There are different ways to get these numbers down.

Can you acquire jackets?

Not at 10,

but at nine or eight.

And you said you used to be able to get them

at five.

So is 10 really the number,

even if you really look at it in average at all

in in today's day and age it might be At 10.

Definitely. There's the odd one that I can get.

I start,

there are a few that I can get less,

but in general there are a few that I have to

get at 12.

So This is another thing about pricing.

You never ever,

if you get a big deal like that,

you've made your pricing and it's based,

based on the $10 a jacket as that portion of your

price. If you get a deal and you're able to get

50 jackets at five,

they'll lower your price.

I don't lower mix,

never. I don't,

I don't ever,

Yeah. Now if you wanna make us have a sale,

a certain type of a sale,

that's fine,

but you stay with your higher level price.

Right, Right,

right. Well and I give the discount to wholesalers with if

they buy five or more,

then I will lower the price.

And when I'm at a trade show,

if they order that day,

I will give them a deal for that day.

Right, right.

Well and well worth doing that because when people walk away

your probability that they're gonna come back and actually buy drops

at least by 50.

Exactly. Exactly.

Exactly. It works.

So this is a realistic look Gail,

at the pricing and from here you can make smart decisions

of how you want to work your business.

The other thing I wanna make mention of with you is

I don't know how you feel about wanting to b bring

in employees.

You know,

if you're retiring,

you have a life too that you finally get to get

to in addition,

right? Like this is part of it,

but you don't nec you don't necessarily want to now jump

into a whole nother big career.

Maybe you do,

maybe you don't.

Right. That's exactly where I am.

I was a few weeks back at a trade show,

it was called the Philadelphia Candy Show and some people were

coming to the booth and we were talking about the product

that I sell with my other business and we were talking

and we got into this conversation a little bit and virtually

she was growing out of loving her business because she also

was doing this as a retirement.

And I'm like,

nobody says you need to grow bigger.

Like if you are making enough money and you like where

you're at and you're enjoying what you're doing,

I give you permission just to stay where you are year

over year and be successful with that.

And she was like,

I so needed to hear that.

So I'm saying that to you Too.

My sister's biggest concern for me is that it will take

off crazy.

And I said no,

it's my option.

Whether it does,

if I'm,

they know.

Yeah. And I'm gonna give you something to consider here.

If you run with the prices that are realistic prices,

if you wanna go with benchmarking,

you are upscaling your product.

Yeah. Right?

Yeah. And limiting some people who are going to buy,

but that gives you correct margin on the products that you're

selling. Right.

And having less production that you need to make.

See, Okay.

Yes, I agree.

You're right.

You're right.

So something to think about there.

And I'm not saying to do that with your existing wholesale

accounts. Like if you raise your prices,

honor your prices to them,

especially if they're already paid for shipping.

Cuz that,

you know,

we all know that before enough.

So since you have a handful and you've worked with them

for quite a while now,

like I,

I would that to them.

But as you're moving forward,

you know,

and this is again a judgment call for you,

but it allows you to put less time into creating,

even though I know that that's part of what you love,

making more off of each piece and not slipping yourself into

that frenzy.

Really good idea.

And is it OK to sell to different shops,

different prices?

It's ok,

right? If you have an explanation for it,

the wholesalers who have already been with you up to this

point honoring the prices or maybe a slight increase cuz your

materials have gone up,

you have an explanation and a reason.

You know,

they've been with me for six years time in because sometimes

people will talk with each other,

you know,

it kind of depends.

Like if you open up to doing things in different states

or something like that,

you wouldn't have that issue.

But you need to do what's right for your business yet

have an answer for why,

you know?

Okay. So like that,

again, I'll go back to my show because at the show

we'll have a lot of customers come to the booth and

say hi.

And you know,

we think we're pretty friendly,

you know,

they wanna,

they have questions and they're talking.

So customers will talk to each other.

And I have a rule in that business that the only

time we discount product is when we're at a show period.

So when people are talking with each other,

they, someone might say,

Oh, I got it at this price.

And another person might say,

gosh, I got it at a different price.

And if they come to me I can say,

Cuz you purchased online,

this person was actually face to face at a show,

which is where we discount our,

like it's an explanation,

right? Yeah.

So just to have the answer to that question and very

easily it can be existing people before I reset my pricing

and now is the perfect time to reset pricing because everything's

going up,

you know?

Yes. So I'm feeling like we can leave the pricing conversation

at that for now.

Okay. How Does that sit with you?

Does you have enough information?

Yes, Yes.

My only question is in person,

can I?

Yeah, so let's talk about that next.

Okay, So this would be the pricing based on benchmarking,

which I think now,

now you can always compare these numbers against what you feel

is reality,

right? Like if we got to a gene jacket being $150

in the markets that you sell in,

you would kick back and say,

Sue, that's unrealistic.

That's not gonna happen.

Right? So you Exactly.

You can look at these numbers and have faith that these

are the numbers,

but change how you actually do sell accordingly.

That's your choice.

Yeah. What the market will bear.

Yeah. What The market will bear.

But because of what your life goals are,

push the market a little bit.

Know you are reducing your overall sales and even if like,

listen, a company can sell a million dollars in revenue and

not make a penny and you could sell 50,000

and make 20,000.

Yes. Yes.

You know,

it all depends on how your prices are.

That's why it's so important to get realistic on these numbers

and then you can decide what to do.

But just then you have an informed choice of how you're

gonna set your pricing.

So I opened up an Etsy shop probably two months ago,

six weeks ago,

just a few items at the $70 price that the most

of my boutiques are selling at.

Nothing is moving.

I get lots of looks.

Is it okay?

That's what I mean.

Like is it okay,

I know my boutiques will be able to look at Etsy

and see Michael designs are less than what they are in

their boutique.

Any suggestions?

How do I,

Yes, suggestions.

Number one,

don't put your best stuff necessarily on Etsy.

Now, first off,

you have to make sure you're working the Etsy platform properly

and that's way more conversation than we're gonna do here today.

Just because you put it on Etsy doesn't mean it's gonna

necessarily sell.

It's kind of like when you start your Shopify,

like you've gotta be getting people in,

et cetera with that.

I agree.

But to answer your question a little more directly,

just put a couple of things there and that's it.

Okay. And maybe put only the embroidered ones that are less

expensive to make.

Okay. And similar designs,

You know?

Yes. Yeah.

And that might price it into what would sell on Etsy,

but so that kind of thing so you're not comparing apples

to apples.

Okay. Then the other thing I'll say is as you're walking

into craft shows Have Different levels of pricing of jackets based

on the embellishment.

I will,

that is a very Good idea.

Like you could make some jackets that have just the tiniest

bit of embellishment and sell 'em for less.

Cause your production time ends up only being half an hour.

Nothing. Yeah.

40 minutes,

Right? Something like that.

So that you could have a couple of different levels and

then of course talk about customization,

adding people's names and all of that then could either be,

depending on the shows that you go to,

like let's say you go to a show where there it's

once a month or you could say,

I'll have it for you at the show next month.

Or they can pay shipping for you to send it to

them. So thinking through,

you can think through shows a little bit differently than wholesale

and make things that are only available at shows,

which also then okay.

Helps you with that comparison with your wholesale accounts.

Okay. Okay.

Makes sense.

Yes. That's a,

Yeah, that's a great idea.

And adult jackets too,

there. I do have adult jackets that I haven't been doing

that long,

but I do more custom.

Most of them are at as a request.

I have quite a few Christian jackets that are asked that

I get asked to make with crosses that are embroidered and

whatnot on the backs.

So, so far I haven't really pushed my adult jackets.

I would have those on display,

maybe even two or three of them on display.

Okay. That could be sold.

And I see no reason why you don't price those at

like $127.

Oh, okay.

Okay. Right.

See what happens.

Test the Market.

Yes. Worst case you put 'em back in the car on

the way home.

Yes, exactly.

Right. I mean,

you might be surprised.

Think about it.

Women will spend that kind of money and I don't think

that that's overpriced for the market at all.

Depends on what the markets are that the craft shows are

in. Yes.

So I have a client who sells her handmade shawls.

She hand dies and makes the yarn and her go for

230 to $500 at shows.

Wow. More artisan shows,

right? Yeah.

She selects the right shows and she's in a similar situation

as you,

like she can do this,

but not as her full time right now.

And so she's got to limit,

and quite honestly,

the quality and the style and what she's doing is worth

every penny,

you know,

of her Shas.

Right, Right.

So, And that's the other thing.

You have to have the mindset that you're worth it.

Yep. Sometimes that is a difficult mindset,

but Yes.

But look at how you built up the pricing.

You're like,

what we just talked about.

You're not pulling the numbers out of thin air,

you know?

No. These are real numbers and it's,

and they're supporting a local artisan.

And we could go on and on with some of that.

Yes, yes,

you're Right.

Ok. So any,

just to finalize this whole conversation on pricing,

any other questions that are coming to mind for you right

now? None.

Not really.

You've hit everything.

Thank you so much.

Okay. You are so welcome.

And what are your next steps now?

What are you gonna do?

I actually,

I, the next step is,

what I had already had in mind was to go into

a fall show,

fall custom show,

and figuring out the pricing was my biggest concern on what

I would do with the fall art fair.

So that's what I'm gonna do.

And I'm gonna do some adult check.

It's more adult check and Have a lower priced one too

there, you know?

Yes. A show only one that you can whip out.

Yes, yes,

yes. So,

You know,

and some of that is a test,

right? Seeing what the market will bear,

what people are attracted to.

Bear in mind that it's Christmas,

so there are going to be more people who will pay

more because it's a gift ver,

you know,

or for themselves.

I mean,

I shouldn't say that.

They'll pay pay more as a gift and not for themselves.

We Yes,

the buying.

Buying in general.

Yeah. But,

so there's a great opportunity there.

I would also,

and let's not get into that for this for the sake

of time,

but as much of your website as you can have up

with the things that you want,

have them there because Okay,

you know,

people might like what you have,

but it's just not the style that they're wanting.

But then they would be able and collect emails at your

shows, right?

I, yes,

I Do that.

Okay. And then,

then you'll be able to send them somewhere online where they

can see things similar to what you have for wholesalers,

but then you'll be able to,

to drive people over there for direct to consumer.

Okay. Okay.

Thank you.

So you're wonderful.

You really are.

Thank you so much.

It is my pleasure.

Where can people who are listening look for your products?

Thank You,

Eve Michael,

Custom designs Eve Michael,

what did you say?

Custom-design.com. Okay,

perfect. And what is your shop on Etsy?

My shop on Etsy is Eve Michael Designs.

Okay. Best way to find them.

Find it,

because Etsy is so difficult is to search for fairy jackets.

Wonderful. Perfect.

Okay, well this has been such a great conversation.

And honestly,

Gail, like I think that we're gonna help a lot of

people who are listening because this whole pricing thing can be

a struggle.

But yes,

you know,

like I said,

if you drive down to get your best estimate of what

these different elements are,

then you still get to decide in the end what you're

gonna price it for.

But you're coming from a much stronger position to understand and

to speak better,

right? Like knowing these numbers,

you're gonna be able to talk much more confidently when you're

presenting the product.

You know truly how much it costs.

You're right.

You're right.

So wonderful.

Well, thank you,

Gail. It's been a pleasure talking with you,

and I look forward to seeing where you take this.

Thanks so much.

I'll keep you informed.

Okay, wonderful.

Bye for now.

Thanks. Bye bye.

If you haven't already reviewed your pricing to the detail that

we've covered here,

now's the time to do it.

Or if it's been a while,

please revisit it.

Especially with our rising costs.

You wanna make sure your prices for both wholesale and retail

are in line and you're not spinning your wheels at break

even. It's very easy to let this slip leaving you without

dollars to invest to grow your business.

Re-listen to this podcast if necessary and apply our discussion to

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