I’m personally not a big fan of price promotions for handmade products, for various reasons.
Firstly, discounting sends out a certain message about your products: I’ve got left over stock, it’s piled high, it’s all about the new season, this isn’t “the thing” any more.
Secondly, it hacks away at your profit margin, which may be slimmer than you would like to start with.
Thirdly, it sets a dangerous precedent – we have all been conditioned by retailers, and in particular online retailers, to wait for the next price promotion: there will always be another 15% off and free delivery around the corner, so why buy today?
Fourthly, you are hopefully working hard to demonstrate to your customers why a handmade product is worth a premium. We know you can’t compete on price with mass produced products, so you have to have a really strong added value proposition: your products are better, and therefore worth more, because of the detail, the quality, the uniqueness, and the heart and soul that you poured lovingly into their design and manufacture. That is why they are worth a premium, and your real customers will appreciate that.
So, for those reasons, I don’t recommend you build discounting and MASSIVE SUMMER MADNESS sales into your business strategy. (You weren’t going to, were you, I needn’t have worried.)
However, you are competing in the real world, against companies who do discount, in a market when it’s not easy to get people to part with their money, and you have a living to make. So what to do?
If you have stock that is ageing, seasonal, or failing to move for another reason, you may have to consider putting it on sale. Now might be a good time. People do love a bargain, and there is no doubt that discounting does stimulate sales. Stock that has been hanging around for months or even years is not good for your cash flow or your energy, so a cheeky discount may get things moving again.
On the subject of cash flow, this can be another good reason to hold a sale: if you can see funds starting to dry up, and are worrying where you will find the cash for the next month’s bills, emergency measures may be required. You may have to park your pride and profit predictions for a short while and use a sale to avert a cash crisis.
Don’t just hold a sale because everyone else is doing it. If you are happy with the level of business you are generating, then fine. But if you do feel under pressure financially, you can still hold a sale without losing your dignity or damaging your brand. All in the best possible taste.
Avoid falling into furniture warehouse speak: “MUST END SOON” and “PRICES SLASHED” are probably not on-brand, so make sure you communicate your sale to your customers in your usual tone of voice.
Think of clever ways to promote your discounts – perhaps you only offer them to your top customers as a thank you, thereby keeping them exclusive and creating goodwill among your most valuable audience. Rather than applying blanket discounts to everything, create some promotional bundles: three cushions for the price of two, or buy a necklace and get free earrings. These offers add value for your customers without feeling cheap.
Consider partnering with a magazine or blog to create a reader offer. Again, this gives an element of exclusivity, and can also promote your sale to a wider audience.
Finally, give people a clear timeframe for the offer. They need to know it’s not open ended. In other words: “MASSIVE SUMMER MADNESS MUST END SOON!”.
If you are running a sale, please feel free to post a link to your site in the comments box below. We will be covering pricing and selling in more detail on the Create a Craft Business e-Workshop, which starts 8th September.