I’ve talked about pricing on Cutting for Business before (see this post and this post), but today I’m going in a different direction related to pricing. As a small business owner, you need to understand the difference between something called static pricing and dynamic pricing. Why? Because it will help you make more money in your Silhouette or Cricut small business.
Basic Definitions of Static and 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 – Prices fluctuate based on the demand of the product.
Real Life Examples of Dynamic Pricing
In our everyday lives, we are surrounded by dynamic pricing.
- 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: Raise your prices. When your business is slower: 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 Silhouette and Cricut small business owners!
Save the image below to Pinterest and help out another business owner.