Reference Pricing and Perception: Turtle Wins The Race Home-Based Business Podcast

When you set your prices you have to keep your profits in mind, but you should also think about what your customers think is the "normal" price, then adjust your marketing if needed.
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This channel is for home-based creative businesses and anyone who sells products online and specifically on Etsy. I do Etsy tutorials and share Etsy tips to help small business owners get their businesses to where they want them to be. If you have questions about Etsy SEO, how the Etsy search algorithm works, selling on Etsy, or how to start an Etsy business and sell successfully on Etsy, post a comment or a question in the community tab!

[@TessieDobey]

I will put myself out there. When I first began selling my products, I had a different label for each type of product: face wash, face oils, serums, etc. And no one purchased anything. I began looking at other shops and bigger brands and I knew what the problem was. Not to mention my pictures were horrible!

[@ecouturehandmades5166]

Etsy bots cannot tell the difference in materials to allow that new pricing guide to be even remotely close. Etsy wants me to lower my prices to a third of where I have them and I'd still be higher priced than most of the same sort of item. Only if my cashmere is free and I would make $2/hour (not bloody likely!) and the buyer pays separately for shipping.

[@KellyDannemann]

This is the same thing I am running into, everyone else is selling heating pads, no washable covers, which add up in price fast, no aromatherapy or essential oils, and Etsy is telling me my range price compared to other is low. Mine is too high, but they are not even comparing me to the right type of merchandise to the right type of merchandies, they are comparing an apple to an orange.

[@piotrpiogrys1075]

I have generally two types of product . One is at similar price like other similar products prices and the second is more expensive because it needs much more work and time. People looking on the more expensive product and going to buy the cheaper version of another supplier:) So I am thinking or to completely remove the cheap version or that expensive version.

[@falcieridesigns]

Reference pricing is really hard because you're constantly told to drop prices, offer free shipping, run to the bottom! And under cutters are a nightmare! And you're told if you don't do that, you won't make sales. Plus there's the consumer mood, especially now. And many home businesses don't accurately monitor their ins vs outs to know when they are selling at a loss. And of course if you are a creative business it's really hard to be objective about the finances. It took me years to master that!

[@KaraBuntin]

Absolutely. It's not easy when Etsy is telling you to have sales and lower your prices and give free shipping. I feel like they're basically taking advantage of people who don't know better at this point.

[@DesignCutters]

I got the "invitation" to try out the new Etsy pricing tool. I tried it and my initial reaction was - oh wow - there's an average price a lot higher than one of my good selling items. But when I looked at the photo examples that Etsy put in the comparison, some were not even the same category of item as mine. So they need to fine tune it more for accuracy on comparing similar items. I did raise my price on some of the items I have in the category I chose, and left other listing prices untouched. After about 2-3 weeks so far none of my increased price items have sold. What I want to know is who decided the reference price for a burger with 1 side dish in a tavern/pub is now 16.99 to 18.99 and a large pizza is now over 25.00 ?

[@KaraBuntin]

Nobody decides it, that’s just the price and whatever people see first becomes the reference price. That’s the thing about pricing things, the reference price is usually just the first one that someone sees so they think that’s “normal” because they have no other point of reference.

[@taffniebogart4232]

Recently, yesterday I second guessed my branding by including one photo with a white background in hopes of being more “regular”. The mixture of vintage I sell is based on quality and uniqueness. The goal is to read like a coffee table book with juicy items but that said these days there is almost nothing that is rare or scarce. More than ever customers are shown what is now perceived as quality the white background. Not sure if I will continue with the one white background or no. Trying to be less unique or quirky is difficult since that is what I value and trying to be true to my brand. Your comments in this video make me feel supported thank you💎

[@conniemann4944]

Really like this video. My problem is that my product will be Graphic T-Shirts and there is really a cap on that. No one for example will pay more than about $30 tops for one so the QUANTITY that I sell is where I’m going to make any profit.

[@KaraBuntin]

And that's why there's such a glut of shirts online right now, everyone is working toward volume. It's a self-defeating cycle.

[@AuthorADHay]

Etsy is recommending I lower my prices to less than a fiver. This is because a lot of the book cover designers on Etsy use canva and charge less than £15 per cover. Pricing this low doesn't even cover the cost of purchasing the required image licences.

[@KaraBuntin]

Ignore those pricing suggestions, they're ridiculous!

[@leannfrobom847]

Thank you!!