Do you WANT to raise your prices for your creative products or services, but find it hard to actually do?
You are not alone … many creatives struggle with raising their prices or fees!
You might worry that nobody will buy from you anymore, or that there is already so much competition out there you will price yourself out of the market.
Is it time for you to raise your prices? Here are 8 good reasons to do it:
Reason 1: You don’t need to have a reason to raise your prices!
Frankly, the only reason you need to raise your prices is …. that YOU have decided that you need to earn more from your creative skills and that you have been underselling yourself and have had enough!
YES, simply because YOU are worth it!
No need to defend yourself or explain why you want to raise your prices. It is nobody else’s business but yours.
Stop under-valueing yourself!
Of course, it’s courteous to let your clients know in advance. It’s a great ‘excuse’ to get in touch with them to inform them that you are planning to raise your prices. You might even get some extra orders and you are building a trustworthy long-term relationship with them.
Reason 2: You want to earn more & become profitable
You might have realised that you have been undervaluing and underselling yourself and have decided that you want to earn more money.
Increasing your prices is the Number One thing you need to do if you want to create a more profitable creative business!
When you raise your prices it often makes a big difference to your bottom line, but actually not impact that much on getting fewer sales. Creatives are often worried, but raising your prices by say 20% will very unlikely result in far fewer sales. Do your sums and predict what will happen if you would raise your prices by 10%, 20% or even more.
Reason 3: Your business costs have gone up
Have your material, living and studio costs risen recently? It’s very likely!
Are you making sure that these extra costs are covered? If not then you are losing out and your profits are getting hit.
Due to the current economic climate and annual inflation, nearly every business has had to increase their prices. Especially if you are importing goods and materials to the UK then you will have noticed price increases, due to Brexit and Covid. Also, gold prices have dramatically increased – very important to be aware of if you are a jeweller!
Reason 4: Reposition yourself better
What kind of creative business are you creating? Where are you positioning yourself in the market? Do you want to be a one-star business selling very affordable creative giftware or stationery products? Do you want to be a three-star business in the middle selling more one-off craft products? Or are you aiming for the top as a five-star luxury business selling stunning products worth thousands of pounds or dollars?
If you want to reposition yourself in your market then adjusting your prices is only one of the decisions you need to make. You also need to think about why people would spend more or less money and what your work is worth. You need to make changes to your branding and how you are perceived. You’ll need to improve your profile and customer care too if you want to be able to charge more.
What price do YOUR clients expect to pay?
Because: Your price tells a story! It sets expectations.
If you charge too much and your work isn’t worth it then you won’t sell.
But if you lower your prices and don’t charge your clients enough then they won’t actually buy more. No, instead they will think: ‘What’s wrong with this?’ as they often know what the going price is or what to expect.
Reason 5: You want to work fewer hours, but earn the same
You are constantly busy, overwhelmed and overbooked already, and want (or need!) to start working fewer hours.
Then it’s a good time to start looking at raising your prices or fees, to work smarter and stop faffing and procrastinating, or to add other income streams that are more profitable and earn you more money to increase your salary while working fewer hours.
Do you know which creative products or services, marketing channels or income streams are the most profitable in your business?
When was the last time that you checked the actual costs and income from each of your creative products or services? Do you know which products make you money and which ones lose you money?
And if you want to make serious money then start to look into royalties and licensing, as that can be one of the biggest money spinners! Even on a part-time or freelance basis.
Reason 6: You have become better known
What’s one of the main reasons that other creatives can charge much more than you?
Often it is because their profile is higher!
Creatives who have become better known, have won awards, have taken part in better events, who speak at conferences or who have been featured in the press can raise their prices much easier.
In fact: clients expect you to!
If you are more experienced, have become quicker or more effective in your work, and your credibility has increased, then it’s expected that you charge more than somebody who has only just started.
GET INTO ACTION: Is it time that you raised your prices in line with your profile? Or what can you do TODAY to improve your profile & credibility?
Reason 7: You want to start selling to retailers
When you start selling to shops and galleries you often need to increase your prices by default!
The reason for this is that most retailers will charge between 200 – 300% commission on top of your wholesale price to get to their retail price. They need this commission to cover their own costs.
One of the big challenges for creatives starting to sell wholesale is that they then need to increase their own price point too so that it is in line with what their potential retailers will charge. If you don’t raise your own prices then you won’t get a lot of wholesale orders.
This is often a major issue for many creatives who want to start selling to retailers as your prices might not stack up and your work would become very expensive indeed! Therefore, I often recommend that you wait two to three years before you actually start selling to retailers, as by then you will have become more efficient with your time and better known.
Read this blog post if you want to find out more about the different pricing terms and how to calculate your wholesale price.
Reason 8: You’re planning ahead
Are there going to be some big changes in your life or business soon?
If you are currently working from home and you want to move to your own studio or a larger studio and your costs (especially your overheads) will increase dramatically, then you will need to plan ahead.
Do you have to charge VAT in the near future? The introduction of 20% VAT on your creative goods and services will have an impact especially if your clients are consumers and not businesses because the latter can claim the VAT charge back.
Read our other blog post about 8 ways to increase your prices confidently and without losing clients.
Have you recently raised the prices of your creative products or services? What was the reason for increasing them? And what was the experience like for you? We would love to hear from you in the comments below.