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Want to make more money selling the products you already have online? Of course you do, who doesn’t?
Today, let’s talk about static pricing vs dynamic pricing. This may sound complicated, but you come across dynamic pricing in the real world every single day.
Table of Contents
Basic Definitions of Static Pricing vs Dynamic Pricing
Static Pricing
A price is determined and the price stays at a set rate the entire time a product is for sale.
Dynamic Pricing
In contrast to static pricing, dynamic prices fluctuate based on the demand of the product.
Real Life Examples of Dynamic Pricing
Like I mentioned above, we are surrounded by dynamic pricing in our every day lives.
- Hotels – As the amount of rooms available for certain days decrease, the prices for the remaining rooms are increased.
- Airfare – As seats on planes fill up, the pricing for the remaining seats are increased.
- Sporting Events – The more in-demand a sporting event is, the higher the price for tickets (World Series, Superbowl, or Stanley Cup)
Examples of Static and Dynamic Pricing in Your Craft Business
This is what a chart looks like when a small business owner uses static pricing. You’ll see that no matter what time of year it is, the business owner offers the same price on their product.
This is what a chart looks like when a small business owner uses dynamic pricing. You’ll see that in busier periods, the business owner raises the price of the product. In contrast, in slower times, the price is decreased.
How to Use Dynamic Pricing in Your Craft Business
It’s easy to implement dynamic pricing in your craft business: When your business is busier or your product is in demand: Raise your prices. When your business is slower or your product is not in demand: Lower your prices.
The Benefits of Dynamic Pricing
Obviously, the benefit of dynamic pricing is that you increase revenue and profits by raising the prices during the right times. The change is quick and easy in your Etsy or online store, and no other details with your product changes. I call that a win for craft business owners!
Real Life Craft Business Examples
Dynamic Pricing for an SVG Cut File Bundle
Let’s take a look at another chart. Let’s pretend that I’m selling a bundle of SVG cut files with a summer theme. During the months of January through April, this bundle is not going to be in demand. I set the price at $10.
But, during the summer months (May through August), I price the bundle at $15 when the SVG cut file bundle is more in demand.
Look at the chart:
Dynamic Pricing for a Christmas Sign
Instead of an SVG cut file bundle, let’s look at a wood Christmas sign. In this case, in the month of December, you’ll see I’m selling my sign for its highest price $60. You’ll also see a high price in July, during my Christmas in July sale. But look at September. You’ll notice an increase in pricing when my sign design went viral and it was in high demand – so I raised the price. Finally, in January, I lowered the price to clear out the extra signs I had.
Look at the chart:
Do You Need to Announce Price Changes to Customers?
Could you imagine if every store you shop at sent an email or posted on social media when they increased the price on something? Oh my! You would be inundated with messages and posts!
No, you do not need to announce price changes, or even justify your pricing to customers. If a customer has an issue with the price, they aren’t the customer for you.
However, if you want a bump in sales before you raise your prices – you could offer some information to your customers. For example, you could post on social media: “Tomorrow is the last day to get XYZ widget for $40.”
Need help pricing your products? Read an article on How to Price Your Handmade Products.
Since 2015, Christine Schinagl has been helping crafters start and run craft businesses through her blog, Cutting for Business. As a Silhouette and Cricut crafter herself, she has a unique take on what works and what doesn’t work in the craft business world. She also enjoys teaching other crafters how to create digital SVG designs, available through the Design with Me series.