How do you, really you, set your item's price?

I’ve been running my store for a while now. I have a few accessories up, mostly glasses, nothing fancy. Lately I did some scripted doll keys. So, it’s not like I’m not making new items or anything. But, now, I’m wondering about one thing. How do I set my price? (O.o)

I know pricing should match the market, but I think that only counts when your products match the market level of quality. So, I do what I can to be well below that. (^_^)

The thing is, I have friends telling me that I’m pricing badly. I remember putting my glasses out initially at my friends’ advice of L$200 and made no sales. I dropped the price to L$125 and made no sales. I dropped the price to L$75 and made no sales. Finally I dropped the price to L$25 and I’m making about a sale per week. Should I pretty much just shift my prices around until I get buyers? (O.o)

Another thing my friends told me was that if I were to price low, I need to price VERY low. Their opinion of the matter is that there is this window between a real solid purchase and an impulse buy where people simply won’t buy stuff. (>_<

Namely, if an item could be valued at L$150 I should charge L$300 because the extra price gives the item a certain assumed quality that the lower price wouldn’t convey. It was also their opinion that if I were to price low, I need to price VERY low so that the item could be an impulse buy for people who are unafraid to toss a little money here and there regardless of if they want something or not. (=_=)

Of course... I’m confused. (>_<

Could there be this psychological window of being too expensive for an impulse buy yet too cheap for an expectation of quality? (O.o)

How many of your friends are running profitable businesses?

it's all the damm freebies out there. why buy when you can get it for free?

That's a tough question and I'm certainly no authority on the subject. I price my work in line with the current market because I feel that my work is at least as good as that of my competitors. After looking at your stuff I'd say it looks pretty good to me, so don't underprice yourself too much regardless of what your friends say because you've obviously put some work into what you sell.

Perhaps the price itself isn't the only factor to consider. I have one store that is in a beautiful location. It's huge, nicely designed, and the other people in the mall who have shops there have commented on how nicely it turned out. Thing is, that mall is totally dead - I mean totally. When visiting there i'm usually the only person on the sim. In a case like that I don't think lowering my prices would help any.

Also, this.

My personal experience is that the market for small-scale sellers has completely changed.

I used to sell a few items at between L$150 and L$200. Not a lot but a steady trickle of sales. Now my sales have dropped to zero - in the same location, with newer, better items at about one quarter of the price. I also have a barrel of freebies for sale at L$0 and, by contrast, that goes quite well.

I price my items with the hope of selling some. I'd rather sell 4 houses at L$50 than none at LS200! In the case of clothes, I make them for myself and sell copies as a spin-off.

My conclusion is that for a lot of SL residents, the difference between a bargain and a rip-off is the difference between L$0 and L$1

Trouble with things like glasses there are hundreds of ones out there ranging from free to 500L and because its a fairly small accessory unless you zoom in on someone standing still you cant see much difference between the 1L ones and the 500L ones.

Often the difference is in the scripts, I recently bought a pair of primoptic ones not because of the look but rather because they have great scripts for changing color, tint, frame, lens, etc, heck they even have flight assist!

No one "needs" glasses in SL, so its just a fashion accessory. and you have to make something unique for it to sell.

Just making knock off raybans is not enough because no matter what you set your price at someone else is selling a set of knock off raybans cheaper.

One thing you need ask yourself is "would anyone buy this at all?". Someone might pick up a bit of junk for 10L, but go much beyond the upload cost of a texture, and you run into what I think of as the "OMG, I need that!" impulse buy. The range can vary for this, but I think of it as between 25 -200 Lindens. Above that, people will think about it, possibly save for it (or not buy it at all ). Below that, they might pick it up because it's near free.

But in that range, while it is an impulse item, you need to be competitive in quality. Put another way, if I want a nice necklace for a dance, having twenty junk necklaces won't do me much good. I want one nice one. It doesn't matter to me whether it is 50L or 200L, I want to look nice and that's in my "impulse" range. If I can't find something I like in that range, I'll shrug and grab a freebie.

Does that make sense?

I too find it a pain to decide on a price.My village is set up to sell from LS10 to LS995 but I have a lot of stuff at 50 and that goes well.I think the freebie thing is now way out of hand and needs some serious culling.
I recently stopped giving freebies on Xstreet. I know buildings fun but why give it away .If I make something new and it took me time and effort I charge a bit more and if it doesn't sell tough.
You can't cover the whole market.I have spent weeks planning and creating something new and unique and didn't sell one for weeks.Then I will knock something up in minutes and it flies out the door.
If there is a golden rule I want to hear it.

The answer to that is, everyone may already have the freebies. I buy to be slightly different. It's an acquisition thing.

Immy, I will go and check out your glasses -- assuming there are any for geeky guys. I'm wearing the same ones I had since I was a month old.

Good responses so far. Thanks. I'm feeling a bit better about my mindset over pricing and a bit less "guilt tripped" over my decision to go "cheap". (^_^)

Maybe a follow up question... For those of you selling items: How often do you find yourself shifting your prices to see if it affects sales? (^_^)

I got tired of trying to figure out what the best price for each thing I put out was.

So I decided to be consistant, and priced everything at 100L each, did not matter if it was a piece of jewelry I took months to make, or a quick shirt in photoshop, each item is 100L (even existing fatpacks that I kept in store are 100L)

So much easier and much easier for the shopper too, to know that each thing is 100L no matter what it is.

(I have not made anything new since Jan, but am still getting sales here and there. I so need to get back to making stuff, did start a pair of prim toe shoes... but got sidetracked because I need the script for color changing them)

also still have not finished redoing ads and permissions... I am such a procrastinator heh

just caught up with the thread here, saw mention of freebies, yeah I agree, tooo many freebies in world however there is nothing we can do about it.
Even if everyone stopped giving out freebies, the existing ones are still there.

I do have some stuff on xstreet for 1L but they are only available on xstreet, and they help cover the xstreet fees on other items that sell there.

every little bit helps

I recently shifted sari prices down because a) the economy sucks and b) I've got more competitors than I did a year ago. I have a certain point where I'll go no lower because then the consumer impression of "value" counteracts the impression of "quality." i.e. For some reason, if I go to a shop and see a dress that I like, and it's super cheap, like L$75, my instant reaction is "BIAB" and I steer clear. I'd rather pay L$200 for the same outfit if it doesn't scream BIAB to me. On the other hand, I've been to shops where dresses are priced upward of L$1200 and those are rare purchases. I'd have to be really sure that I wanted that L$1200 dress. *shrug*

For objects like sunglasses or other accessories, I'd make sure that the quality is in the detail. Show lots of close-ups in your photos, add some scripts like Primoptics does (someone else mentioned them) and find a price point lower but not ridiculously lower than them. They have the name and the quality that accompanies it, and people are willing to pay for the name. If you price your glasses at L$10, people are going to think you've somehow copybotted someone else's design... if you price at, say, 75% of Primoptics, people might think that they're getting a good deal.

Finding a niche is important too. Do you want to do all sorts of stuff, or just glasses? Or is your theme "a little bit of everything?" If so, potential consumers might be a little confused. If I go into a shop that sells shoes, skins, dresses, and purses, I sort of wonder exactly where the creator's strength really lies. That's just me, though.

Sorry for the essay.

[Edit: How you display your wares makes a difference too. For accessories, I always enjoy seeing a rezzed copy inworld that I can zoom in on, rather than just pictures.]

I suppose that it depends upon your market. I have a small niche market, with less than 300 customers making purchases in almost two years. However, every week at least one customer spends around $L10,000 in my shop. Thus, my three shops just about cover the shop rentals I pay, and recently, the tier fees on my island (and main store).

When I price an item, I compare it to similar, and set at about the same price. I calculate that the price should be about $L100 per hour of actual work spent in research, making textures, , making and marketing. Interestingly, this always works out at about the same price as similar items are set by other designers. It is pretty poor hourly pay, but I charge about 10% of my 'normal' RL wage per hour to do special commissions in SL.

My customers do buy a few cheaper items (my cheapest is $L99) but they do seem to be individuals with private sims in SL, and they seem to prefer to buy from a limited group of designers. But they still have to watch their prim counts! Making my items any cheaper does not seem to increase purchasing. Publicity drives seem to have no measurable effect either. Most purchasers seem to tp in from my profile, so they are clicking on an item they liked inworld. TG my profile is set to show 'in search'.

I know that when i first came to SL, i was very keen to visit money trees, do trivia, and sit in camping chairs for a few lindens, as i REALLY wanted to be able to buy the lovely things i saw for sale. This drove me to go premium and then to put money into my account. So whilst there is a market for very cheap (or freebie) items, as ppl develop their preferences in SL, they do like to pay 'fair' prices for the goods here.

So if you are making a rare or unique quality item, price high. Value your own work and the effort you have put into it. Other people will value it too.

Best wishes from Ainee Kohime

So it's you're the one that wears the same glasses as me!!!

For my poseballs I price just a little under what my most popular competitor charges, not only to be cheaper but also because my stuff isn't up to his level yet IMHO (although animations are a matter of taste and I do get the very occasional glowing review).

I also sell a frivolous, primmy (22 prims) script-heavy toy that is fairly unique and IMHO (again) way cooler than the 1 or 2 similar products I've run across, and I charge L$750 for it even though it is frivolous and doesn't really do all that much, certainly nothing useful. I figured fans of the genre (it's inspired by a well-known series of movies of a dark, twisted and violent nature) would want it regardless, and I priced it so everybody and their brother wouldn't end up with one... appealing to folks who see themselves as connoisseurs maybe? Plus people living on the cheap won't have a 22 prim toy sitting out anyway.

I agonized over the pricing at first, since SL sales and the micropayments involved are clearly a numbers game, a game of volume, but I guess I chose well since it continues to sell and having it hosted rent-free at a couple of friends' shops when I was starting out allowed me to buy my first mainland 1024 with nothing out-of-pocket and ongoing sales covered my tier until I expanded into other areas.

I carefully consider the market segment I'm aiming for, the prices of competitive items of similar quality, and the time and effort it took me to create the item.

Then I pull a number out of my ass.

LOL. I didn't see that coming!

I would recommend you price it to whatever the market is set to or a little lower but not too low. When I shop for something specific and teleport to several stores I see what the average price is and start expecting it to be that way.

Ever heard the phrase whatever the traffic will bear?

Hey I do the same thing except all that crap in the beginning

Interesting topic for me to come across tonight and thank you for posing it, Immy.

I have the opportunity for a second "satellite" store although it may well turn into my flagship store due to size and some other factors. The man who owns the sim is somewhat of a land baron in niche markets, is quite successful in RL, and on top of that has exquisite taste.

After looking around his sim and choosing my new location I asked if he would like to see my satellite shop and a few of my products. After a few moments he said "May I give some advice to you?" I said certainly and he said, "I suggest the Revlon Cosmetics principle. If you price things too low, people do not think they are valuable. And if you package them beautifully, they are "worth" more. That is the Godiva Chocolates principle."

I told him I had debated this internally and read both schools of thought on the forums. After speaking with him, though, I plan to raise my prices a bit and work on the "packaging."

It really is hard to know where to start though.

Posted this before reading other responses so going back and eager to see what others think on the topic.

My take on the higher prices is that what holds true in RL doesn't always hold true in SL.

Most people know that once something is made, then it is just a matter of selling "copies" of it, it doesn't cost extra each time it is sold, for materials, and such.

So the higher price and pretty packaging to me, doesn't mean squat.

I look at the item, to see how well it is done, how well the seams match etc.

I have seen some very pricey shoes, when inspected closely, are misaligned, and just not good enough to warrant such a price (in my opinion), I have also seen clothing that are from some well known designers, with high price tags, that when inspected closely, the seams are off and they just look unfinished. (not stuff I bought, stuff I seen on other people, ask where it came from, is it mod, etc (no mod determines if that was how the designer intended it to look, of if it is mod, then the wearer may have made changes, most often it is no mod)

sorry for rambling... I guess what I am trying to say is... price and packaging might draw some folks, who will think the product is awesome, until they unpack it, and if it is not up to their expectations (which is hard, as we do not know what anyone expects), they will be sorely disappointed.

Which I guess is why it is so hard to come up with a price that "fits", which is why I went with the single price structure, a one price fits all theme.

When I first started SL I was amazed at the prices I saw on things. Of course when I started to make things, I thought I really should follow suit...I still giggle when I look in my bargain basement and see one of my earliest outfits with a $300L price marked on the box. What was I thinking?

I have heard before that if your prices are too low, people automatically think your stuff is junk, but what good does it do me if people think my stuff is NOT junk but I still don't sell any of it? I don't remember who said it, but I read a quote from someone a while back that went sort of like "I would rather see people wearing my stuff than just wishing they could afford it". I thought a lot about it, and decided that I really had to agree with that. So I lowered my prices and my sales tripled in the first month and have grown upwards ever since.

There will always be people who look at my things and think "That is probably not good, or it would be sold for more" but to be honest, the high rollers are not my market. My market is the 'regular' people, and there are a heck of a lot more of them

Do I sell things too cheaply? I have been told that I do. I don't care though.

I put up some items up on Xstreet for L$0 and L$1, which I thought was really silly but they are well put together and with good texturing, they are tools like a knife, an axe, a sickle, and even a dowel a few prims each, set to 'copy' only, the freebie knife goes like hotcakes and I have received requests to sell these items at 'full perms' which I have at L$100 each much to my astonishment. This also actually generated a very large increase of traffic and sales of other higher priced items, although nothing is over L$295. And again the item I have set as the highest price is becoming my best seller, which is a 'pray pose', a sign of times maybe?

I also do it this way. And I take lot extra time to make sure my item is totally unique from any competitive items in most cases.

That is where textures come in...the more unique the texture ...then those that copy my ideas cannot quite get the same look. But I also have many items where I buy the textures in-world...I believe in supporting SL texture makers as it can save me many hours then when I have to make my own.

There are many items that just sell in SL...no matter that there are many stores with the exact item. For instance...for the Valentine's season a popular Texture seller (where I spend huge amounts of lindens) sold a pack of Valentine trees that blink colors. The script to change the colors is included in the pack. One particular tree in the pack...it was covered with these large cute teddy bears all over it (but in my opinion the silliest thing I have ever seen) sold like hotcakes two straight years in a row! The first year I thought it was a fluke...but set one out this year anyway for 100L. I sold at least 2 a day and sometimes up to 5 of them for 3 straight weeks before Valentine’s Day!! I am still amazed by that...but there is no accounting for what tickles peoples fancy.

I have very few items under $100L...in fact that is the average price of my items with one of two items at $50L. The more work I put in them...the more I charge. I have only a few items at 300L or above though. For my type of items...$250 seems to be the limit on which people will still buy things on a whim...more than that and they will go shop around first.

I do not sell clothes though so I have no idea what the average price is for them. I do know if I find something I really like... I hesitate once it is above 350L (excluding evening wear). If more clothes sellers sold demos and I could try them on first...then I would pay more. But too many times I buy something and when I try it on later...I have to trash it because it either looks nothing like the poster or it is no mod and I hate changing my avie's shape just to get something to look right.