In all honesty, if a new small business owner says they have a grip on the cost of pricing or how much to charge for shipping they’re lying. I can tell you the truth: over the last four years pricing has been a constant struggle for me. Especially since I run a niche business aside my peers who sell wholesale items or design their own crafts. At this moment, I am having a little bit of clarity. I thought I’d share some thoughts with you about how I price my items, and what works for me. (This will be lengthy).
First, if a person has been in business longer than five years, then (yes) they have a grip on pricing and shipping (at least I hope so). They should be really turning a profit by that point.
Pricing my items has been the biggest struggle for my business-life. Most people are buying items at wholesale from vendors, so the mark up equation is rather easy for them. Or, they are the designer themselves and can multiply cost by quantity by other factors that give them a listing price. Shop ICB on the other hand, is an online women’s RESALE BOUTIQUE. Meaning, I go shopping 3-4 times a week or month to source merchandise. These item’s prices can range from 99 cents to $75. Everything is different and no day of thirfting is alike. I can go to several stores and find nothing, and then I can come back two days later and find everything.
In the last couple of years, more and more individuals have opened resale boutiques (more power to them). However, I find it odd when they price items at less than $25. There is absolutely no profit in that cost. I understand wanting to have lower prices, and feeling as if that will drive customers in, but it’s all about having the right customers. (If a person only shops with you because you are cheapest or running a sale they are not the ideal customer for growth & expansion). Cater to those who spend money without a promo code or needing low prices. Remember your target demographic can be the billionaires or millionaires of the world if you market yourself right. Why be the Dollar Store, or Walmart of your industry when you can be the Neiman Marcus?
After having conversations with my Etsy-Austin community, and long debate, Shop ICB is increasing their prices by 15% as of June 1st, 2013. I will state that the current prices on items will stay the same but new merchandise will be priced higher than what items have been in the past. I’m here to run a business, and a good business makes profit. I am not a non-profit, and Sallie Mae wants her check every month. I am the curator of pieces that my customers wouldn’t normally find when they are thrifting or shopping–or if my customers are not thrifters themselves, I am one for them. This is my passion, and my vision for my business.
Shipping costs is like an ugly step-sister. Firstly, USPS and I are at a CONSTANT war with each other. Last December, they raised their prices and there is talk that they will raise them again. *Deep sigh and rolls eyes* For awhile, I tried shipping with UPS because of the perks, but the extra costs are not worth it for me at this stage. When Shop ICB is at the six figure level, then I might look back into it. At this vary moment, I offer free shipping, but I have not seen an increase in sales because of it. Probably two years ago, Eboni and I were on Twitter talking about shipping costs and how outrageous they can be for the customer. We were talking about Victoria Secret then, (yes, I have a really great memory. It comes in handy) and it slightly changed my perspective. I can see both sides of the equation when it comes to shipping and shipping costs. I know it’s not cheap to mail things, so thank goodness for the flat rate that USPS offers. Ultimately though, it’s not enough to fix the problems at hand.
In the shipping/soul-searching process, I went to look at what my favorite stores were doing. Some offer free shipping with a minimum purchase amount. Others charge standard amounts, and still others charge no matter what but give incentives when you spend a certain price. For example, at Nasty Gal if you spend over $150, you receive free over-night shipping. With that in mind and after a heavy debate with myself, I decided to leave the cost of shipping up to the customer. One of my favorite business owners wrote a post about this here. I feel, at this time, it’s right for Shop ICB.
At the end of the day, I am a business owner and need “coins” to grow my business. It takes money to expand, and if I’m spending $500 a month out of pocket on shipping, I will not expand. It is time to do what’s best for Shop ICB I still love my customers, but they should understand that I need to grow. So, that is what I think about shipping and pricing (at least what I’m willing to discuss publicly).