How to Price Your Products Like a Pro
One of the most challenging topics for new Glowforge users is how to price products.
Especially when you’re just starting out, you may not be as confident in your abilities as you’d like, so it can feel awkward to decide how to charge.
Let me just say that while there’s no magic formula (though some use formulas to help), you are almost certainly pricing yourself too low.
The tendency is to wayyyyy undersell yourself. Then, if/when you make tons of sales at your way too low prices, you create a ton of work for yourself, but little to no financial progress.
In fact, if you’re not careful you can find yourself working for free or even losing money.
I see posts all the time in the Glowforge groups on Facebook where new creators are begging someone to tell them what they should charge for their products—some formula that will allow them to always sell a ton while still compensating themselves fairly.
That formula doesn’t exist. Some like to calculate 3x materials cost plus a set rate per minute of Glowforge time.
That’s a good place to start, but here’s why I don’t love it: it leaves out several important factors, like quality, ideal customer, and a little something I like to call the ‘pain in the ass’ factor (some products are just no fun to make).
It also leaves out the specifics of your own situation and goals.
When I started my business, I knew that creating products for customers meant time away from my daughter—and my daughter is pretty much the best, so I knew my prices would have to be on the premium side to justify time away from her.
So how did I set my prices?
Well, I always made a sample first, and then charged exactly as much as it would take for me to be delighted instead of irritated every time my Etsy sale notification went off.
That meant that sometimes, I did not offer a product because I knew the market would not bear the cost that I would have to charge for it to be worth my time.
I found that if I priced my products too low, I started to grow resentful of sales coming in—the amount of work it took to make each product just wasn’t worth the time, effort, babysitting cost, and time away from Freyja.
Instead, I decided that I would rather make fewer sales if that meant that each sale was a joy.
Let me be clear: I did NOT do this at the very beginning. I would hear my sale notification go off, and a wave of dread would wash through my body. That was a sure sign that I was not charging enough. Over time, I raised my prices to a level that I was comfortable with.
‘But Jac, we need a formula!’
Okay, fine, here’s how to always find the perfect price for any product:
Your prices must be high enough to fairly compensate you for your labor and talent, and low enough that enough people will purchase.
Sounds simple, right? Let’s unpack that a bit.
You’ll need to price your products high enough that you’re still paying yourself fairly even after you factor in your material cost, wear and tear on your Glowforge, and packaging and shipping costs.
Other things to factor in to determine whether your prices are high enough:
How much do you enjoy making that item?
I happen to loathe painting. For me, a painted item is going to cost wayyy more than an unpainted item (and in fact, I quickly stopped offering painted products at all—pro tip: don’t offer things you don’t want to make).
How much post-laser time does it take to assemble?
Some products are ready to pack and ship as soon as you weed the masking (you are masking, right?). Others, like my wall hangings and bow holders, take some time to finish and assemble. Include that time in your assessment.
What are your longterm goals?
Some people just create for the joy of creation, and don’t need or want to start a business as such—they might be able to price their products to cover just materials and shipping.
But if you’re reading this, that’s probably not you. You want to build a longterm, sustainable business that can help support your family, your life, your travel, etc.
It’s your responsibility as a business owner to think strategically and price your products in a way that allows your business to continue to exist year after year.
The bottom line? You want your prices to be high enough that you are delighted every time that Etsy sale ca-ching sound chimes from your phone.
If you find yourself feeling resentful or overwhelmed instead, it's a sign that your prices just might be too low.
But what if your prices are so high that nobody buys?
Honestly, that's a win in my book. I would rather not make a sale than sell something for less than it's worth. Your situation might be different than mine, though—and that’s fine!
You do want to make sure your prices are low enough that you are making enough sales.
To do that, you need to figure out what 'enough' looks like in your business.
When I was just starting out, my business was just for extra spending money.
I didn't want to sell 100 products per week, because I didn't actually want to make 100 pieces every week—it would have been way too much with my day job and taking care of my home and child.
In fact, I intentionally stopped growing my shop's Instagram account when I hit about 500 followers, because I had more business than I was comfortable with. (Note: if you find yourself in a similar position, raise your prices $5-10 at a time until sales slow to a rate you are comfortable with.)
Set a target for your income each week. Let’s say that you want to make $200 in revenue per week—that’s such a realistic goal even for a newbie.
Consider carefully how best to make that $200: many new creators set their prices super low, and hope they sell enough to hit their goals. You could certainly do your best to make 40 $5 sales each week—but actually, making a $50 sale isn’t necessarily more difficult than making a $5 sale. You would only need 4 $50 sales to hit your target each week.
Or perhaps your goals are not based only on revenue, but actual profit—even better. You will likely make significantly more profit on 4 $50 items than you would on 40 $5 items.
Consider my mirrored acrylic/white oak bow holders/wall hangings:
Product Costs Breakdown:
$8 wood
$1 acrylic
$1 macrame rope
$2 packaging
$5 shipping
$2.25 PayPal fee or $3.60 Etsy fee
$19.25 or $20.60 total cost
After a little trial and error, I settled on $68 including shipping for my bow holders, regardless of whether I sold on Etsy or in Facebook groups.
I purchase all my wood from Smokey Hill Designs, and all my mirrored acrylic from Cerulean Tides, and I generally buy 20-40 pieces at once so the shipping cost is spread out.
I end up paying about $8/sheet including shipping for 1/8” white oak. I don’t use a whole sheet of wood, and usually cut several other projects from the same sheet, but let’s count the whole sheet anyway.
I pay $17/sheet of mirrored acrylic, but since I can fit many bow holders’ worth of letters on one sheet, my cost per bow holder is about $1, give or take.
I order my 3mm macrame rope in large rolls, and use about $1 worth on each bow holder.
Then, I use a $.50 12” pizza box from Webstaurant.com and about $.50 in tissue paper (which I buy in bulk on Amazon) to ship. I include a $.30 business card. Let’s add another $.70 for my shipping labels and tape just to be safe.
I use Pirate Ship to get the best shipping rates, and usually spend $4-$5 to ship.
I spend around to create a really premium product. It takes me less than a minute to customize each piece with the child’s name. Bow holders generally take less than 20 minutes to engrave and cut, and about 10 minutes to assemble.
I generally batch my orders and do each step at once (future posts can cover workflow optimization if there’s interest).
I make about $48 per bow holder for a product that I really enjoy putting together. When I post in the right Facebook group, I can make up to 40 sales at once of these bow holders (I usually cut off orders before it gets to that point, though).
New creators often blame their prices for low sales.
They think that if they just sell for low enough, people will buy.
They lower their prices on items that aren’t selling and wonder why people still don’t buy.
It’s definitely possible to price an item too high for your market. You will start to get a sense of what prices your market will bear as you spend time getting to know that market.
Do you want to sell large nursery name signs? Go research your market! Jump on Etsy and search for ‘large nursery name sign’ and see what people are charging. But really check—don’t assume the low price on the search results page is the real page. That’s usually for a tiny version. Click on many products that have a similar vibe to what you’ll be selling, and put in the dimensions and number of letters to see what they are actually charging.
You don’t have to charge the same as everyone else, but use it as a gut check. Were you only planning on charging half that price? Reconsider. Were you planning on charging twice that price and can’t imagine selling your products for less? Pick a less labor-intensive product to offer.
Do you want me to walk you through pricing your own product?
Download my pricing worksheet below and go through every step—don’t skip anything, it’s all important.
There’s no magic formula, but with a little thought and effort up front, you can make sure that your prices are fair to you and to your customers.
