A recent topic of discussion in the hooping community lately is under-charging for products. More specifically, hoop shops that are charging only for the price of materials (or less than that). This article is going to provide some insight on how this is damaging to everyone, and damaging the shops that are charging low prices. This article will also touch on why it is a good idea to charge a decent amount for hoop services (such as classes) as well.
You should be compensated for your time and effort, even if you feel you should sacrifice them for the beginning of your new business opportunity. Burn-out and exhaustion is going to hit you hard if you continue to charge such low prices for so much work. You may not even realize how much work you are going to have to do. Especially if you are really great at making hoops and people get word of your low prices, you may be facing a challenge impossible to overcome. Best case scenario, you get popular and you will have to hire people to keep up with demand. How would you hire help for your shop if you can't afford to pay yourself, due to the low prices you are asking? Once your prices go up to where the others' are, will you still have customers? We are looking out for you and trying to help you see things that you may not be expecting!
Katie Emmitt has been running her own hoop shop for years, Kemmitt Hoops
"Things you're paying for (or paying for partially) when you purchase a hoop from a small hoop-shop business (AKA reasons why hoop shops aren't "rolling in the dough")
-Taxes and Etsy/PayPal fees
-The tubing plus the shipping for getting the tubing to the maker (which can be applied to EVERY item on this list since 99% of my supplies are bought online)
-The material for the insert/connector
--- And just for shipping ---
- Tape or Zip ties for coiling down the hoop for shipping
- Extra clear vinyl tape to send in the package (at least this is something I do for friction fit hoops)
- Ink for my Printer to print the shipping label and invoice and instructions
- Paper for my printer to print the shipping label and invoice and instructions
- Polybag mailer
- Cardboard (and the shipping on this is incredibly expensive)
- The actual cost of shipping the package
- Packing Tape for taping on the shipping label
- Gas to take the package to the post office
And this doesn't include things like, well, LABOR, and the years of time I spent perfecting my technique, as well as all of the tools I need to complete the hoops: Tubing Cutter, Rivet Gun, Drill, Drill Bits, electricity to charge my drill and computer and printer and dremel, sharpies for writing on invoices and packages, my computer, Internet, printer, Exacto Blades and my exacto knife, hole punch, Dremel tool and bits, sand paper, my car that takes me to the post office, time I spend marketing and expenses that go along with that, the monthly cost of having my website plus the amount I pay yearly for my domain name. Plus probably other things I'm not even thinking of at the moment!
Just like any small business there are a lot of costs that aren't immediately seen, especially by the consumer! Next time you wonder why you're paying $30 for a hula hoop and $10 for shipping, think about this!"
Take Katie's words into consideration. When you charge too low for your products, you are forcing others to sacrifice compensation for their hard work and materials.
How Customers are Affected
Customers and their feelings should be considered as well. We all know how Walmart and department store hoops originally taught them that hoops are $3-$5 right? Well, we have been getting somewhere over the years and they are becoming more aware of what it really takes to make a good quality hoop. They are starting to learn that those hoops are cheap, made as a kid's toy, mass produced and break easily. Do you want to confuse them more and bring them back to having an unrealistic and inaccurate idea of what hoops cost to make? Charging far too low will bring them back into being confused about why most places are charging what they charge. Allow them to know what it really costs to prepare, make (and often package and ship) that high quality hoop!
Talking from experience trying to run an etsy shop selling hoops, there's a chance you may have bitten more off than you can chew. My experience was years ago, before the hooping community exploded with large numbers of shops. Competition was really rough back then, and it is about 3x worse now in 2015. I had a lot of confidence in myself and my abilities. I thought I could be one of the best hoop shops out there. I barely had any money to start with but I had faith that I could make it work. I assumed that with each set of hoops I sold, my shop could grow larger. I had my prices as low as I could get them and still break even. Reality hit me hard after a year and a half of persistent trying. I then realized that I did not even like making hoops. I was burned out from making zero profits after expenses. I would have been in the hole if I were to have continued and bought more supplies to make more. So, I took the last bit of hoops I had, sold them and had a little bit of money to buy my dignity back. I felt so awful about the failure, but I am now doing bigger and better things in so many ways! Failure is essential to success.
Classes and Performances
Please also keep these things in mind when providing services such as classes, workshops or performances. Don't allow everyone to get comfortable expecting them for free or cheap. If you teach the public or other hoopers that those things aren't worth very much, they will happily remember that and set a boundary for what they will and will not pay for services from others. Many of them will refuse to pay a professional because they found someone who told them that "hooping is a passion, not a job" or something similar (which has happened to me many times). Average people won't understand the hooping industry the way we do. Don't do that to your fellow teachers or performers. Make it a fair playing field and be kind. Don't under-cut, don't talk down on hoopers that charge for services and be considerate. If you absolutely MUST provide free or cheap services, try to let it be known to your audience or hiring person that it isn't typical to find and that professionals deserve fair payment for their services.