Pedddle founder Nicki recently had an in-depth IG Live chat with Catherine from Future Retail, an expert in how to price your products – highly useful for market stallholders.
Catherine explained that there are 7 key steps in finding how to price your products. Find out more:
- Find your closest competitors. They should be of a similar company size, offer similar products and offer a similar level of manufacturing and quality.
Start with your 3 closest competitors – don’t bother looking at supermarkets and mass producers, look for competitors who are similar size of business to you, and have a similar quality products of products. Don’t compare them, just look objectively at their prices, which will help you work out how to price your products.
2. Decide how your pricing is going to compare.
Find out where the value is in your product. Are people paying for the time it takes to make, the quality of the materials and so on. Avoid self-devaluation, try and be objective as possible.
3. Ask your customers/ideal audience what price they would pay for similar items that you make.
Survey people about your products. For example, ask people about the last time they bought a t-shirt for their child, and how much they actually paid (rather than asking questions like ‘what would you pay for this item).
You can ask family and friends for feedback, as long as it’s accurate and you’re asking your target demographic. You could ask people using an IG poll or on other social media platforms, by asking people what they paid last time they bought a product similar to yours.
4. Set a style of pricing.
There is a phrase, ‘the confused mind always says no’. Give a simple pricing structure so that your customer always knows exactly where they stand.
For example, use £5/£10/£15 or £6/£9/£12 type structures. Keeping pricing simple helps the customer, and helps you to easily work out money when you’re selling at market.
Structure your products, for example you might sell small candles at £10 each and large candles at £15 each. Create a framework of pricing and slot your products into it.
Pick a pricing style too – products ending in 99p are often considered slightly less premium than round numbers, and are difficult to sell at markets due to giving change.
5. Is your pricing structure logical?
Line up your products – do they increase in price in a way that seems fair and understandable to customers? If they increase in size this can be simple to work out, but if different or more expensive materials have been used this needs to be obvious.
6. Who is your ideal customer?
There are people will always think your products are too expensive. By working out exactly who your IDEAL customer is, you can find out exactly what that demographic is willing to pay. There’s a big difference on getting consistent feedback from your ideal customer and them saying your products are a little expensive, than one random person walking up to your stall and criticising your prices.
7. How much is the event you’re selling at worth to you?
When it comes to your next market or event, get an idea of how much you want to sell and the profit you’d like to make from it. You can then work out the stock levels you need, and how to price your products.
For example, if you want to make £100 from an event and make £10 profit per item, you need to sell 10 items in total. If it’s a 5 hour event, then you need to sell 2 items per hour. You don’t want a completely empty stall at the end – ideally you want around 30% of stock left, so that your stall doesn’t look empty and you don’t miss out on any potential sales. In this instance, you’d then need to bring at least 13 items to market.
Working out your profitability in this way gives you a focus, and helps you assess what you need to bring to market.
Should I consider VAT Registry?
Structure your pricing as if you have to pay VAT, don’t simply dismiss it! If you do then have to become VAT registered at some point, it’s not as much of a knock to your pricing plan and your finances are more protected.
Is it OK to have different prices at market than in your online shop or website?
Growing trust in your business is vital, and the best way to do this is consistency! It’s important to show your customers that you are a serious business, and if they see you at market they can easily look you up. If they see that your prices are different each time, this can put customers off.
HOWEVER – you could get around this by using ‘special offers’. Perhaps create a special promotion for a certain market, such as ‘spend £25 and get a free tote bag’, or different discounts to create a buzz and encourage people to buy at market. A ‘flash sale’ could also work (especially if you want to get rid of end-of-lines) but be careful – keep your pricing as consistent as possible.
Should I put cheaper items nearer the front on my market stall?
What do you want to sell the most of? Small products are nice for add-on purchases or for customers to easily see, pick up and look at, but think of a focal point for your stall – what do you want to sell most of? What is your best seller? Highlight those products, and perhaps put higher priced items in focus, then your lower priced items can compliment them and may be easier to upsell.
What are the best kinds of product promotion?
There are 2 main kinds of promotion, either trying to clear stock and free up cash, or pushing top-line sales. You are most likely to sell your best selling products with these.
Here are some ideas to maximise sales at market:
- Lead with your best seller – could you have a ‘Product of the Month’? If you state clearly what your best-selling product is, people are likelier to buy it. Give customers the impression that it’s in demand and they should buy it now so that they don’t miss out!
- Don’t overcrowd your stall – piling on the products will simply put people off and give them the impression they have to wade through piles of products. Keep it simple and stylish, without feeling empty. Creating a little space on your stall gives it a more ‘premium’ feel.