Pricing 103: Strategic Pricing, Tailoring Your Rates for Different Selling Channels

Following up on our two previous posts about pricing, Pricing 101: A Guide for Aspiring Knitwear and Crochet Designers and Pricing 102: Finding Your Sweet Spot in a Diverse Market; we are closing out our three-part pricing series with bottom line numbers!

Today we’re crunching the numbers to answer the age-old design question... Should you offer different prices on different Selling Channels? Let's explore this together, and hopefully, it will shed some light on this sometimes daunting topic and help you make informed decisions.

Evaluating the differences between each Selling Channel will help you make the most informed decisions.

We’ll start by looking at the cost of listing and selling on each Selling Channel. We'll compare popular sites like Etsy, LoveCrafts, Ravelry, and Squarespace, giving you a comprehensive picture to base your pricing decisions as we walk you through each step of this pricing exercise. 

Note: Some Selling Channels use more plugins and have additional costs and fees (like Shopify) that make them harder to evaluate on the fly, so make sure to take the time and calculate what the costs are for any options you’re considering. 

Note Note: Check the date of the last update to this post. Selling Channel fees are constantly being changed and that could shift how you look at the below data.

listing fees

A listing fee is defined as the cost to list an item in the digital shop or marketplace.

• Etsy - $0.20 for each item listed, expires after 4 months, $0.20 on each item that sells for duplicates through their auto-renew policy. 

• LoveCrafts - free to list 

• Ravelry - free to list

• Squarespace - free to list with Basic Commerce plan.

transaction fees

A transaction fee is charged by the site, payment processor or both, in exchange for processing the sale. 

• Etsy - 6.5% of the price displayed on sale

• LoveCrafts - 4% + $0.35 (USD)

• Ravelry - charges 3.5% commission if you sell more than $30 worth of patterns in a month. If you sell less, you will only pay the PayPal processing fees (2.9% + 0.35%)

• Squarespace - $0 monthly with the Basic Commerce plan, but requires transactions through Stripe (this varies by country, in the US Stripe charges 2.9% + $0.30 per sale). 
  

monthly site costs

These are costs associated with holding the site, but not with generated listings. 

• Etsy - free to create a shop

• LoveCrafts - free to create a shop

• Ravelry - free to create a shop

• Squarespace - $27 per month for Basic Commerce plan

There are probably some other fees and such we could evaluate here (different payment processors, like Stripe or Paypal, have their own fees), but to keep it simple, let’s just stick with these for our comparison. 

Now, let’s generate the other parts of our equation–a monthly amount of patterns sold, and the cost that pattern is set at–to determine whether you’d list for the same across all sites. 

Let’s say that you sell 5 different patterns in your shop, and each month you sell about 100 patterns total. You sell each pattern (all 5 styles) for $10. 

- On Etsy, you would pay $0.20 per listing, so $0.20 x 5 styles = $1.00 to list, but when sold, you’ll need to pay the $0.20 per sale as if it was an individual listing. $0.20 x 95 = $19. Then you’ll be charged a transaction fee of 6.5% on each of the 100 patterns. $0.65 x 100 = $65.00, plus the listing fees ($20), brings us to $85 on Etsy out of $1000 in sales. 

- But on Squarespace, you don’t pay anything for individual listings, but you’ve paid $27 for the month of sales. Stripe also charges you 2.9% + $0.30 per sale, so you’ll add $0.29 x 100 = $29 and $0.30 x 100 = $30, to total $86 for the month out of $1000 worth of sales. 

As you can see, these are highly variable numbers, and many of them are dependent on additional factors, like your location, whether or not you need to collect VAT or additional taxes, and how many listings you create or how they are sold. What’s important here, though, is to evaluate if you should list your patterns on these sites for different costs.

- Etsy takes 8.5% of your sales or $0.85 per pattern. 

- LoveCrafts takes 7.5% of your sales or $0.75 per pattern. 

- Ravelry takes a 3.5% commission if you sell more than $30 per month + PayPal fees

- Squarespace takes 8.6% of your sales or $0.86 per pattern. 

When we look at the numbers small like this, they seem pretty close. Where we really start to see differences in cost is when you look at this on a larger scale: 

• Etsy in 1 year takes $1020 of your $12000 in fees. 

• LoveCrafts in 1 year takes $900 of your $12000 in fees. 

• Ravelry in 1 year takes $420 of your $12000 in fees (+ Paypal fees).

• Squarespace in 1 year takes $1032 of your $12000 in fees (plus site costs).
  

Now, let’s see if adding this fee into the pattern cost makes a big difference: 

• By listing on Etsy for $10.85, 100 patterns sell for $1085. The fees remain the same ($0.20 per listing, $20 total) and the transaction fee goes from $65 to $70.52. You pay Etsy $90.52 in fees and net $994.48 instead of $915 for the month. This amounts to a difference of $79.48, and over 12 months, a difference of $953.76. 

• Let’s look at what this same product would cost on Squarespace. If we raise your price on the pattern to include the fees, you’ll sell for $10.86, similar to Etsy, and the total each month is $1086. For Squarespace, remember our estimate was based on two parts, the website maintenance fee ($27/month) plus the transaction fee. Squarespace calculates fees based on the cost of the item, plus a flat $0.30 fee per sale. 2.9% of your $10.86 pattern is $0.31, plus the $0.30 makes your cost per transaction $0.61. Add in your monthly fee ($27 / 100 patterns) and you’re adding $0.27 more cents, for a total of $0.88 per pattern and $88 per month. This amounts to $998 net per month (versus $914) and saves you $1008 annually. 

While it’s easy to look at the numbers and say “Wow, $1000 a year is totally worth calculating this for each of my Selling Channels”, it’s also easy to look at those numbers and decide that it’s not worth it to alter your pricing site to site. 

Throwing another wrench in the factor is WHERE you are selling. When you do your market research on pricing you will find a different median on each Selling Channel. This should be factored in when thinking of your target audience.

Now that we’ve walked you through the benefits of price adjusting here are a few reasons you might NOT make your pricing variable across platforms: 

• You want to keep things as simple as possible for record-keeping purposes. 

• You want to provide consistency across your brand for your customers. 

• You frequently use dollar amount discounts instead of percentage-based discounts (dollar amounts will be more impactful on some platforms than others). 

• You don’t like doing math…honestly, fair but it shouldn’t be the only reason you’re leaving money on the table.

  
  Whether you choose to have variable pricing or it makes more sense for you to keep it consistent, remember that gosadi is here to support you. Our user-friendly Selling Channel specific, pattern listing process allows you to update and experiment with ease. 
  
  Rather than running from Selling Channel to Selling Channel to update your prices across all of your listings, gosadi allows you to manage it all in your Pattern Library. Ensuring you can adapt your pricing strategy whenever you like. After all, our goal is to be the best tool possible to assist you in reaching your business goals!