There is a point on the road to financial success where almost every artisan has to come to grips with an agonizing decision for which there is no single good answer.
What brings it on?
As an artisan, you finally arrive at this point by creating work that people get excited about, start buying, and telling their friends to buy while it is still available at a bargain price.
You have created something that is not only remarkable, but is recognized as being more valuable than the price you have set on it. If you are selling at craft shows, you see this development as soon as it occurs. Your new pieces start moving off the display tables almost as fast as you can put them out.
You have that incredible elation that comes with finally getting it right. Customers love your new design and actually buy it! Your heart fills with joy. You may actually be able to make a career out of your craft work, after all. A brighter future seems to be opening up before you.
If you have placed your work in a gallery or store, you are pleasantly surprised when you are given an order for more pieces. If the earlier work had been placed there on consignment, you might even find the gallery or store is now willing to buy your production.
You are now starting to see the rewards for all of your hard work and you start producing the next round of pieces to sell. You throw yourself into a flurry of activity, buying raw material, setting up a more efficient workspaces and producing new work at the highest rate you can manage.
Somewhere during this mad rush, it begins to dawn on you that your bank account is still going down, even though more money is coming in than ever before. There is this chilling realization that it is costing you more to produce these treasures than you are taking in. You are losing money on every sale…
You must make a decision. You cannot continue doing what you are doing. You must either raise your prices or lower your costs. There are major difficulties with either choice.
The choice will depend on your particular craft work and how much labor goes into the final product.
In the case where costs can be reduced by product redesign, you must deal with the problem that a slightly different, and less expensive, design will be perceived as less desirable than the original design which attracted the attention of buyers.
The analysis of the dilemma and various solutions for it merit a separate treatment in a series of later posts. Stay tuned for more articles on this vital topic.
Meanwhile, feel free to suggest your own solutions to this dilemma.