How to Raise Prices on Your Jewelry Supplies and Maintain Customer Loyalty
Whether it's due to tough economic conditions or the rising cost of manufacturing, there may come a time when you need to increase the price of the wholesale jewelry-making supplies that you are selling to your customers. As a consumer yourself, you don't like to see a rise in prices, whether it's at the grocery store or your favorite clothing retailer. However, changing trends in the industry may force you to make these adjustments in order to maintain your bottom line.
Many beading business owners who are new to the industry may feel like they're risking losing sales and cheating their customers out of good prices. However, there are many consumers who are not only loyal, but willing to pay a few extra dollars for good quality, according to the New York Times.
"I learned it's a misconception that if you raise prices too much, you’ll have no business," Mark Kronenberg, who runs a tutoring service, told the news source. "There are many customers who shop based on quality, not lowest price."
If you're in a jam and thinking about raising the prices for your beading products in order to get over temporary financial difficulties, there are a couple of ways you can do so without losing customers or having a negative effect on your reputation.
1. Let your clients know that a change is coming. The American Express Open Forum reports that before you make any alterations to your prices, it's important to inform your customers what's coming and cover your bases. Consumers appreciate honesty, whether you have to be frank about increasing prices or cutting back customer service measures.
Even though it can be a tough decision to increase prices on your clients, especially when they have been loyal since the beginning, these are inevitable issues that you will be forced to tackle as an entrepreneur. In the end, you will have a better idea of how to handle tough economic conditions in the future.
However, you might want to keep in mind that your customers are likely to not be very tolerant of the idea of a price increase to begin with, and if you don't execute your plan efficiently, they might leave. The goal of keeping your clients in the loop should be to justify your rise in price with valuable information.
"If your idea of 'reasonable profit' isn't reasonable or if the price increase makes you more expensive than the (otherwise identical) competition, customers will bolt big time," BNET columnist Geoffrey James told the news source. "They'll figure that the real reason for the price increase is that you're too stupid to run your company efficiently--or that you just want to remodel your kitchen."
2. Do a little cost-analysis before raising your prices. In order to make sure that your reasons for increasing prices is truly justified, do the math. Entrepreneur.com recommends considering how much it costs to produce your jewelry, the dollar amount that is representative of what the item will be valued and how much customers will be willing to pay.
If you can find a way to lower your production costs, you can make more of a profit on your items without dramatically increasing prices. When it comes to judging the value of your pieces to consumers, listen to your clients. When conducting sales, pay attention to the feedback they give you. This is a cheaper alternative to bringing in a marketing team to do your research for you.
3. Don't increase your prices all at once. If you have reached a fork and the road and determined that raising your prices is inevitable, Cox Small Business advises to do it in small increments. Customers who come to your store and see that your beading increased in price by 40 percent over the course of a week are more likely to turn away from your business.
Instead of risking losing clients, take it slow. The news source reports that raising your prices steadily by approximately 10 percent margin should be enough to keep customers satisfied while you maintain your overall bottom line.
4. Remind customers of the reasons for your price increase. One of the easiest ways to smooth things over with clients who might be irked about a price increase is to remind them that there is a good reason behind your decision. While the obvious is to maintain your profit, you might want to inform them that the rise in price will also allow you to create better quality jewelry. If consumers know that their dollars are going to a good cause, they will be more likely to stick around.
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