How To Increase Profits with the Best Pricing For Retail

Keep your expectations realistic to secure the highest returns 

Without a careful, methodical approach, it can be difficult for makers (and indeed small businesses) to find the right balance when it comes to pricing their products. Let’s take a look at the considerations and contributing factors, so that this critical part of running a maker business can be controlled to work in your favor.

If you’re making as a hobby, then profits may not be such a priority – but a business cannot be sustainable if it does not turn a profit.

Setting a price for your products

In the creative marketplace, there are 3 key components to consider:

  1. Your cost price
  2. Your wholesale price
  3. Your retail price

This is the simplest breakdown, where the cost price refers to the sum of all the cash costs that go into making each product; the wholesale price is the cost price plus the amount you want to earn for your idea and your time (this can be seen as a ‘creative fee’, but we’ll get to that later); and the retail price is made up of your wholesale price plus the retail margin.

When seen in this way, a general guideline can be followed with the ratio of 1:2:4 where $1 of cost will have a $2 wholesale price and a $4 retail price.

Looking at it from the other direction can also help, as the focus on starting with the final selling price has a stronger connection to the reality of your target market – ie, the price of competing products. There is no point working out a price based on your own production costs, only to find that you are no longer competitive in the marketplace once your product reaches retailers.

Therefore, the simple equation looks like this:

Profitable Retail Price = 2x Wholesale price = 2x Total Production Cost.

How do you calculate your Creative Fee?

The tricky part, particularly when you are just starting out, is how to account for your creative spark and your design/assembly/packaging/marketing/etc time. How long do you spend assembling each product? What about all those trips to the post office? Every moment you spend doing ‘work’ should be accounted for, and given an appropriately proportioned value to insert into your calculations.

There is a handy Ponoko walkthrough on how to calculate these figures that can really help to prevent you from falling into the common trap of under-pricing your products.

Tough negotiations with retailers

Selling direct from your bedroom home office is one thing, but when retailers put the squeeze on you for tighter and tighter margins, the figures you carefully worked to when just starting out can suddenly leave you operating at a loss!

The Ponoko Cost Saving Guide uses a set of laser cut coasters to simulate the full process from initial design through to high turnover retail product. It makes for interesting reading, with a guided navigation through all the considerations that contribute to product pricing.

These include:

Minimum Order Size
Most Profitable Order Size
Minimum Wholesale Order Size
Tough Retailer Negotiations 

Knowing where your boundaries are in terms of lowest acceptable price and also highest realistic goals before you engage in large volume orders can make the difference between whether you actually realise a profit or not.

Making a Profit

Profit is very important, if you are seeing your making as a business venture.

There is no rule that you have to make a profit! It is totally ok to be making for the joy of making, but consider that without profits from your efforts, it can be very difficult to continue your passion for making things for others. When you make a profit, you are also creating new possibilities for yourself… so without a profit, you are not going to be running a business for very long.

Once dollars are involved, rules become very important. In Chris Anderson’s 10 Rules For Maker Businesses, profit heads the list, and with good reason. Reading through these articles will give you many tools and insights that can help to set and maintain realistic goals for your maker business.

“…if you don’t get the price right at the start, you won’t be able to keep making” – Chris Anderson

Let us know in the comments below what your personal experience has been in balancing the tricky task of how to achieve the best pricing for your retail products.

 

10 Rules For Maker Businesses

Ponoko Cost Saving Guide

Stop Under-Pricing your Design Products

 

 

How To Help Your Client Launch a Kickstarter Campaign

Head off Crowdfunding questions with these useful tips and resources

kickstarter-help

Crowdfunding campaigns give entrepreneurs, artists and businesses a unique opportunity to test the viability of their ideas. Yet for many, the thought of running a Kickstarter campaign can be a daunting prospect.

So how can you help de-mystify the process, and give your client the tools and support they need to embrace all that Kickstarter has to offer? Let’s take a look at some of the contributing factors that enable campaigns to reach – and indeed exceed – their funding goals.

Choosing the right platform
The first question to ask is whether or not this method of raising funds is actually suitable for your business proposal. Each crowdfunding platform has its quirks and benefits, and in the example of Kickstarter, many submissions do not even pass the approval phase. It is well worth taking the time to identify which crowdfunding option best suits your business model and potential project outcome.

Don’t be dazzled by dollar signs – just because there are campaigns raising millions of dollars does not mean that every campaign will be an overwhelming success. For the majority of campaigns, a few thousand or even just a few hundred dollars over the target amount can be a big deal.

Be prepared to work hard
Although crowdfunding has been shown to be surprisingly lucrative for some, successful outcomes are not guaranteed. It takes more than just having a bright idea; you have to know your project very well and be prepared to put time into every stage of the funding process. Understand that for every hour you spend (and there will be many!) on preparing the campaign, there will be just as much time required to maintain and promote the project through to completion. Yet even then, your task doesn’t end when the countdown stops. Assuming you are sitting on a pile of money after a successful campaign, you will need to get moving on production and manage the distribution of rewards to your backers.

There is a misconception that a crowdfunded campaign is something that can be done on the side, in your downtime or on the weekends. This is simply not true… one thing that all successful campaigns have in common, regardless of funding levels or project outcomes, is that the campaign itself was a full-time commitment.

Engagement 
There is a strong social media component to the Kickstarter process, with communication and personal interaction playing a large role in backer satisfaction. It can help to remind yourself that Kickstarter is not an online store, even though some backers continue to treat it like one. Integral to successful campaigns is the way people love to feel like they are involved in making things happen. This is a different consumer experience than traditional online shopping, and with careful planning you can use that to your advantage. Choose a variety of rewards including smaller contributions that can help keep people interested in your progress, even if they aren’t in a position to commit larger amounts of money during the campaign. These potential future customers can become informal brand ambassadors through their own social media activity, expanding your reach before the campaign reaches its conclusion.

Be realistic
Not all campaigns are successful, and that is ok. The reasons why a campaign does not reach its funding goals can be quite varied, and are sometimes just as mysterious as to why other campaigns dramatically exceed expectations. When setting up a crowdfunding campaign, plan out how you will navigate through both failure and success, so that your business can continue to evolve beyond the campaign timeline.

Assistance
Don’t be shy – a Kickstarter campaign is a lot to take on, and it is perfectly ok to seek out help. In fact, many services are popping up that enable a streamlining of each aspect of the campaign. Gathering and processing information beforehand will help to protect you from nasty surprises and also empower you to fully exploit successes and opportunities should they come your way. Here are a few to start you off:

The Ultimate Guide to Crowdfunding
Presented by Shopify, the ecommerce solution of choice for many successful campaigns. This thorough walkthrough over 23 chapters covers all the key considerations to be aware of before taking on your own Kickstarter campaign.

How To Make a Successful Kickstarter Campaign
Using the Pebble Watch as a case study, this detailed investigation looks at how a 24 year old guy’s project with a goal of $100,000 became a $10 million record-breaker.

Tools for Kickstarter: Planning Calculator
A handy tool from Reuben Pressman, you can generate a quick overview of whether your numbers will all stack up. The calculator also includes a valuable Incentives component that will help to resolve the allocation of backer rewards.

Social Media services: Backercamp
Communication and Marketing for your campaign will get a huge boost if you call in the experts to lend a hand.

Manage your Mail: Green Inbox
With so much content flooding your clients’ email and social media, direct personalised messaging gets through to people and saves you time.

Look your best on camera: Elevant Productions
The influence a refined video clip has on campaign success rates is huge. Get it right first time for maximum impact on the small screen.

Case Studies: Success Stories
Also from Shopify, this breakdown of eleven campaigns highlights what they did right and what they did wrong, providing many valuable insights.

Analysis and Infographics
In-depth analysis of campaign metrics, trends and a very handy infographic that helps to navigate The Untold Story behind Kickstarter Stats.

The task of setting realistic goals, achievable rewards and establishing effective communication with backers is often more complex than people first anticipate. By investing a little time in making the most of these resources, the entire campaign experience becomes a whole lot more manageable. Don’t underestimate the impact that thorough preparation can have. By approaching your campaign with the knowledge that you are prepared for any surprises that may pop up – whether they are positive or negative – you will be ready to rise to the challenge.

Are you using the Ponoko Personal Factory to produce rewards for a campaign? Let us know in the comments below and we’ll discuss the best way to help you reach your funding goals.

3D printed exoskeletal support

Exo-Skeletons no longer mere sci-fiMagicArms 3D printed exoskeleton

In the realm of science fiction (Aliens, Halo, Iron Man, etc) exo-skeletal suits have long enabled humans to exert super human force and endure arduous conditions. But for Emma Lavelle, a young girl that was born with a condition called arthrogryposis – wearing a 3D printed external support structure is a reality to enable her to carry out everyday tasks that able bodied people would perhaps take for granted. (more…)

Artphones

How would a class of 8-9 year olds re-design walkie-talkies?Artphones

The Artphones project was part of Bobby Genalo’s Masters thesis at NYU’s Interactive Telecommunications Program. His project looked at the maker as consumer with play as an educational tool to assist the design process. In Genalo’s research he sampled two groups, a class of children and a group of adults. In each group he encouraged novel creative thinking about what would be an interesting portable personal communications device. The school group’s ideas were realised with the help of a Makerbot Replicator. (more…)

3D printing community survey

Your chance to be a 3D printed statistic

What do we really know about 3D printing? Perhaps it’s time to find out what’s happening out there, and you have been invited to help put those juicy numbers together.

Backed by the P2P Foundation, Peer Production is currently running a survey with the goal of providing insights about 3D printing communities to the people who are actually doing the printing.

It’s only 20 questions long and can be completed in just a few minutes. So if you’ve dabbled a little in the world of 3D printing and would like to contribute, head over to the P2P Foundation survey where your experiences can be turned into numbers for the inspiration of the broader community.

The 3D printing community survey closes on May 15th, with results to be published soon after.

via Statistical Studies of Peer Production

Would you like vector engraving with your espresso?

Cafe in Tokyo serving up coffee and laser cutting!

laser-cutter fabcafe

Japan is the source of all that is weird, wacky and wonderful in integrating culture and technology. Since opening on the 7th of March, FabCafe in Shibuya-ku, Tokyo brings the world lattes with laser cutting! (more…)

Ceramic tiles printed with your images or patterns

A custom ceramic printing web service.

ImageSnap will print any digital image you provide onto the ceramic tile of your choice. They offer a variety of sizes in both glossy and matt finishes. You can order just one tile or order a large quantity at a discount. A single tile would be an unusual way to present a photo, or order a whole set with a custom pattern for your next home improvement project.

PotteryPrint: the new 3D printing iPad app for kids

With the right technology, 3D printing is child’s play.

PotteryPrint is a truly exciting new iPad app that lets children use a virtual pottery wheel to create completely unique works of art ready for 3d printing.

The PotteryPrint team is currently seeking funding through Kickstarter to take their prototype to deployment.

They’ve got 20 days and $10,000 to go. You can support the project for as little as $1, and they’ve got some great pledge rewards including a home-baked dozen of your favorite cookies!

I talked to Brian, Cameron and Shlok from PotteryPrint to find out more about this app, their inspiration behind the project, and their thoughts on the intersection of technology and childhood education.

First up, can a kid really use a 3D modeling app?
Kids can do amazing things if given the right tools, but until now the majority of 3D design software has been created using traditional CAD-based software which is often complex and takes some training to use effectively.

The amazing thing about tablets is that the touchscreen interface just clicks with kids. I (Cameron) have a two year old and four year old — both can easily navigate the family iPad: pointing at something comes far more naturally to children than using a mouse. The combination of touchscreen and the malleability of clay makes PotteryPrint immediately accessible to kids. It calls on something natural, something primitive. Your hands, making something.

(more…)

Global Village Construction Set

Another wildly successful Kickstarter campaign: 10 days still remaining

We first came across Marcin Jakubowski’s incredible Global Village Construction Set (GVCS) back in April, following his well-received TED presentation. The concept of GVCS is one of those super-simple, too-good-to-be-true proposals that has real potential to change so many lives.

What is it all about? Imagine a modular, DIY, low-cost, open source, high-performance platform. One that makes it easy to fabricate all of the 50 different industrial machines that it takes to build a small, sustainable civilization complete with modern comforts.

The aim of the GVCS is to lower the barriers to entry into farming, building, and manufacturing. Its a life-size lego set that can create entire economies…

Like all good farmers, Marcin and the guys from Open Source Ecology have certainly been busy.

Opening their project to the hands of the public with a highly successful Kickstarter campaign, things are looking good for the first set of prototypes that have been developed.

Click through for more information about the campaign, as well as a deeper look at the Global Village Construction Set.   (more…)

Ring and spaceship making apps for 3D printing

Design it online then print it.

Dolf Veenvliet, also known as macouno, created two making apps that lets you design a ring or spaceship online then immediately upload it to be 3D printed. The ring app uses a series of sliders to change various features, and the spaceship app randomly generates a ship based on your name.
(more…)