The Pricing Dilemma

Coffee in the New Orleans skyline mug, "Cloudy This Morning" by George Winston on iTunes. Yes it's Saturday, but I'm working so why not blog too? Four kilns fired yesterday, four will fire today. Becky painted the new back wall display. Patrick from Taylor Kinzel dropped off the pedestals I lent them for the glass show. I ordered the foamcore to cover the front (unpainted) of the backwall display and ULine will deliver it Monday. In short, everything is getting done unless it's done on a computer (except blogging--somehow I keep up on that).

The website languishes with articles unwritten and an online ordering system for galleries as yet undone. The ERP system has stalled again. V is on vacation for a week and I need to get the iMac set-up for her in any case. (I no longer have two Beckys, I have a Becky and a Veronique--or V. As Becky H's real name is Veronique T and she uses it professionally, I am getting used to calling her V--her preferred nickname.) More importantly I have not done the annual review of my pricing in preparation for the start of the show season.

Out of curiosity I looked over my wholesale price sheets since 2005 and compared them to Bullseye's price sheets for the same time period. Given that I use entirely Bullseye glass in my production work, it seems only logical that my pricing should be at least loosely tied to theirs. Freight costs are another expense, but I don't have those so readily at my fingertips. I also have to consider my stand costs as they are the only other significant material in my pieces.

It has been my policy for the past several years to keep my prices as low as I could, but I was surprised to find that I have only raised my wholesale prices by an average of 5% since January 2005. Bullseye has raised glass prices 20% in the same time period (to be fair, 10% of that increase took effect in November 2008 and is one of the primary reasons I am considering raising my prices this year). Stand costs have increased 30% since 2005. As I went from stands mass-produced in China to stands handmade in the US during that time, I consider myself lucky my costs only increased 30%. But they are likely to go up again this year in step with rising steel costs and I need to be prepared for that.

So what do I do? A 10% price increase would be reasonable in a stable market, but the marketplace is very uncertain and potentially unstable right now. The news abounds with stories of people taking 30% (or more) salary cuts just to be employed. Is it even rational to think of increasing prices now, or would a better business strategy be to tighten my belt a bit more and keep working on growing the customer base and not on growing the income? This is the time a business or economics degree would be handy. French and linguistics don't get you very far in the world of finance--and both autodidactic glass artisanry and do-it-yourself business ownership are only worth a hair more. I bet Warren Buffet or someone like him wrote a book on the subject, but I'm not going to get it as it would only put me to sleep. Economics does that to me--one reason for the lack of the aforementioned degree.

I need to mull some more, but I have to make a decision by Thursday as the new show season starts Friday and the pricing for the year needs to be in place by then. What to do, Who to ask. Any advice?