Pricing: $20.00 Or $19.99?
Sunday February 4, 2007
This is a fantastic article about pricing for craft fairs. We have always used whole numbers when pricing for shows, however a lot of crafters use 19.99 or 19.95 instead of 20.00. The author explains that since craft show buyers are typically not fooled by knocking the penny or nickel off the price and that since providing change for the transactions can be tough, you should use whole numbers in your pricing for shows. Any thoughts?
Comments
I understand the theory behind dropping the penny - people like to think they’re receiving a deal, however, anyone who makes things to sell will know when they look at other people’s work what they are doing with the price. Personally, I’d rather pay the $20 and know I’m dealing with a seller who is confident about their product, and respectful of me as a buyer. One penny isn’t going to make or break the sale of a good product. And yes, its much easier to make change. If a customer thinks its a better deal at $19.99 or $19.95 as opposed to $20, they may not be the customer you should rely on. Handmade work should be priced well and at a solid amount - if its truly on sale, then a $20 item marked down to $18.00 would be more appealing to me.
absolutely agree.
Should be taken into account the search issue. Much easier for the customer to search for whole number, like 30,40 etc…
I agree, this ends confusion for the customer and the artist..I like to go a step further..I include tax, rounding up to an even amount..in my pricing..the customer likes that also!
First, I want to remind crafters that it is illegle in most states to include sales tax in the price of an item. I know that everyone does it. Most of my items are a single price so I charge 7.62 and when I add .38 it comes out to 8.00 and I have made it an even number, satisified the sales tax rules and have a happy customer. They laugh when I say the price is $7.62. At first they have a strange look but then they usually laugh and say it is fine. My prices are posted. I know that this sounds like a fine point, but I am finding that sales tax officials are showing up at some craft fairs.
I’m so old I can remember when Tennessee first got a sales tax, 1% at the time. All the newspaper ads suddenly started advertising things for 99 cents, 1.98, or whatever so merchants didn’t have to fool with change. Including it may be illegal, but there have been times when we’ve been swamped and would have lost a good many customers if we’d had to calculate and fumble with change. Fortunately, Tennessee has a fairly high amount of revenue one has to exceed before having to pay sales tax. It’s a big help to new people getting used to waiting on customers and handling merchandise and money.
I will agree with the folks who go for even $$. The only time I vary from that is on some less expensive items that are priced at $7.50 or 3 for $20.
Have never had a customer question my pricing (except that it seem to be too low for the amount of time spent)
I use round numbers and include the tax in the total price of the item at the time of sale. My experience at craft shows has been that people will refuse to pay the tax. They will tell you that so and so down the way didn’t collect tax and they aren’t going to pay it to you. And, I understand that in a way. If everyone collected it then there would be no dispute. But, there is no consistency and the buyer thinks you are trying to rip them off if you try to collect and others don’t.
I live in Colorado and all of the shows require sales tax to be collected, so, customers are okay with that. But, including it in the price isn’t feasible, unless I wanted to reprice my items for each show as every city or county here has it’s own tax along with the state tax. Thus, the amount I must charge to collect taxes changes from show to show. (Did I mention that it’s a pain to have to figure a different tax rate all the time?!)
I price my items in whole dollars and have not had any problems.
I noted that PopsShop commented that customers have told him/her that they are not charging enough for their product. Take that to heart. Customers are not trying to pay more for no reason. They notice the value of what you do and you need to do likewise. Raise your prices some. I’m willing to bet it won’t hurt your sales a bit and you’ll be making more of what your time and effort is worth. I’ve talked to many artisans and crafters who are charging too little. Many times, it makes your product seem cheap and low-quality. Don’t do that to yourself. Charge accordingly!~
I do both craft fairs and I also have an online site. As such, I price my items either .95,.98,.99, etc. This way, I have only 1 product with 1 price in my computer. Saves me alot of time rather than having the same product priced at different prices. I also charge sales tax on top of this price. I do not include it in the sales price. While it takes some time, and I warm my customers beforehand, especially if they are charging something, they do not complain. I think it’s because they love the product and realize I am a small vendor with limited resources. Also, I have worked only the small craft fairs, not the larger ones. That may make a difference, too.
The premise of $19.99 versus $20.00 isn’t necessarily one of “saving a penny”, it psychological–people look at $19.99 as cheaper than $20.00–not just the saving of one penny. Psychologically $19.99 or $19.95 is paying “considerably less” than paying for the same item rounded to the whole number. That’s been a marketing ploy for years in the psychological game of business (I’ve worked for years in marketing, read and participated in numerous surveys on marketing tactics). People can logically see the savings of only a penny or nickle, the mind perceives it more acceptable to spend $19+ than putting down a $20 bill. As a matter of course I usually price in whole numbers because of the inconvenience to me of having to figure on the odd cents–but that’s the purpose of the $.99 and $.95 tag on the prices.
I price my items ending in .95, .75, etc. I have done craft shows for several years and find pennies do matter to the customer. I am working with a price range of $1.50 to $8.45. I agree it’s a psychological game, but that’s the way people are. I also charge tax on top of my price. A few people are impatient, but most are not surprised. We are retailers, after all, and should act like them.
Strongly agree…When I am very busy at shows, it is much better to keep whole numbers.
look i have not ever been a whaterver you call it i think they should say the price it is because when you buy it you do not get what you wanted but dat is all i gots ta say. P.S. THIS IS DUM. P.S.S. DID I SAY THIS WAS DUM