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My parents had been running their own tailor shop in the 80's, barely making ends meet, pulling in less than $20K a year. It wasn't for lack of business, fathe
by crispyambulance 7y ago
My parents had been running their own tailor shop in the 80's, barely making ends meet, pulling in less than $20K a year.
It wasn't for lack of business, father was a master tailor trained in Italy and capable of elite bespoke craftsmanship. They had as much business as they could handle. The problem was that they were charging what they thought the work was worth rather than what their customers were willing to pay.
At some point, during the Reagan years, my mother had an epiphany and jacked up the prices massively, far beyond what my father thought was remotely reasonable. The result? Even more business, more pressure, more return customers. That put me and my brother through an expensive college.
There's something about high rates that makes customers feel more important, it's a status-thing and it also propels them to take you more seriously even if they have you do low-value stuff.
- prof1le 7y agoThere were mentioned studies in the book "Influence: The Psychology of Persuasion" that mirrored what your parents experienced. Long story short, a jeweler was trying to move some turquoise and told an assistant to sell them at half price while she was gone. The assistant accidentally doubled the price, but the stones still sold immediately. Turns out there's a phenomenon where humans automatically associate price to quality. So getting charged more means we think we're getting better quality, regardless of the actual quality
- kevin_thibedeau 7y agoSame for brown diamonds.
- crooked-v 7y agos/brown/"chocolate"/
- lazyant 7y agoblack pearls too no?
- zrobotics 7y agoHonestly, you don't even need to specify 'brown', regular diamonds would apply. DeBeers has some awesome marketing, diamonds are one of the least beautiful gemstones.
- groby_b 7y agoBeauty depends entirely on the cut. (If you haven't seen diamonds with "old european" cuts - late 19th century, essentially - you should. They are so much more beautiful than the sterile modern cut ones)
- deleted 7y ago[deleted]
- stronglikedan 7y agoBut also, charge accordingly, if you don't have to post your prices (as your parents probably did). A lawyer is likely willing to pay a lot more for the same website than a tailor shop, and I'll gladly take both of their money.
- crispyambulance 7y agoYes, "charge accordingly" means different things to different customers. My parents never advertised their tailor shop, it was all "word-of-mouth" business. After the pricing jack-up, every customer got charged what my mother felt they could pay (with a very loose regard for consistency and some allowance for negotiation). I used to think that was sketchy. It wasn't until much later that I realized that B2B enterprise sales people do that stuff ALL THE TIME even with their onerous kpi's, forecasting and fiscal quarter expectations!
- zamadatix 7y agoThat big business does something isn't and indicator of whether it's sketchy or not. I wouldn't even say the comparison maps 1:1 anyways.
- crispyambulance 7y agoYou're right but whatever it is, that's what "brings in the bacon" for a lot of businesses.
- nateferrero 7y agopricing is an entire industry of it's own, with conferences and such I see it like advertising - one part of the chain of value, and ensuring that a responsible and fair transaction occurs Production: control of how something exists Project management: control of when something Advertising: control of how you become aware of something Pricing: control of how you take ownership of something
- TeMPOraL 7y ago
- mywittyname 7y agoIf you respect yourself, then you'll respect your work.
- Bokanovsky 7y agoThis is a classic example of a Veblen good [1]. "Veblen goods are types of luxury goods for which the quantity demanded increases as the price increases, an apparent contradiction of the law of demand, resulting in an upward-sloping demand curve. Some goods become more desirable because of their high prices." The suits are expensive, so they must be good. It's also a status signal to others that you can afford such goods. (Edit minor typo). [1] https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good
- __jal 7y agoFor anyone interested, I highly recommend _Theory of the Leisure Class_, in which Veblen developed the notion: http://moglen.law.columbia.edu/LCS/theoryleisureclass.pdf http://moglen.law.columbia.edu/LCS/theoryleisureclass.pdf
- wallace_f 7y agoIt's worth asking if most of what society is doing is prestige-seeking? Conspicuous consumption is undeniable when looking at some goods and services, but what about the ordinary, say university?
- otakucode 7y agoConspicuous consumption and its ilk have a very poor status in sociology. Thus far, wealth inequality and displays of it are the only things actually shown, when all societies are considered, to always increase violent crime. Even poverty has no effect except in situations where it is juxtaposed with wealth. There, it irresistibly tends to violence. (Source: 'Nine Crazy Ideas in Science', chapter 1, which was actually about gun ownership rates and violent crime levels but which mentioned the finding about wealth inequality after dealing with the original issue)
- androidrebel 7y agoExcept that violent crime in the US has been falling for decades...
- deleted 7y ago[deleted]
- conanbatt 7y agoIts not the same customers. Welcome to marketing!
- biztos 7y agoI'm not sure this is totally applicable to say a tailor shop, but I do wish more craftspeople would try charging more money for quality work. For example say I want some shelves built. If my shelf-builder charges $X that's fine, but what if I would happily pay $2X? On the one hand, I might be personally miffed to know I'm paying 2X instead of the X someone else is paying. On the other hand, I'd probably be the more satisfied customer if I don't know (or have the discipline to ignore) the price gap, because the shelf-builder is probably going to give extra effort in hope of getting more jobs from the 2X clientele. It would be interesting to explore what would make your 2X client feel good even if they know they are paying double. And would that scale to 4X or 40X clients?
- sundvor 7y agoThere must also be the satisfaction derived from keeping a quality craftsperson in business, in face of the cheap-shot mass manufacture that seems to happen everywhere.
- antt 7y agoI met a welder who had hourly prices above work samples. The $300h one looked like a piece of art. The $20h looked like sea gull crap landing randomly around the piece.
- projektfu 7y agoBravo, but the article was about being placed at a typical rate on a 20 hour job that became a 300 hour job. Here's an article about what you're talking about: https://hbr.org/2017/10/why-you-should-charge-clients-more-than-you-think-youre-worth https://hbr.org/2017/10/why-you-should-charge-clients-more-t...
- gus_massa 7y agoThis reminds me one of my favorite comments of patio11 https://news.ycombinator.com/item?id=4477088 https://news.ycombinator.com/item?id=4477088 >> Frew, who apprenticed with a Savile Row tailor, can — all by himself, and almost all by hand — create a pattern, cut fabric and expertly construct a suit that, for about $4,000, perfectly molds to its owner’s body. In a city filled with very rich people, he quickly had all the orders he could handle. > You don't have to be Wall Street to figure out the bleedingly obvious solution to being a starving artist who has so much work they have to turn work away. Raise the prices. Then raise the prices. Then when you're done with that, raise the prices. > At some point you'll be too expensive for the typical businessman, which will make you absolutely crack for a certain type of person common in New York, thus defeating all efforts at being less busy. So it goes. I guess you will have to raise prices.
- chaiii 7y agoI wonder if it's sustainable though. If you keep raising the prices and people buy what you're selling, and then eventually realize the quality isn't up to par of what they're paying for.
- evrydayhustling 7y agoNo matter what you think you are selling, you are always selling the buyer's experience. And for some work, framed the right way, high prices improve the experience.
- otakucode 7y agoI've a friend who has run his own small IT business for a bit over a decade. When I talk to him and he mentions how much he charges, I always tell him it is far too low. He sees it as being easy for him, so he doesn't think he should charge much. I've tried to explain to him that when the plumber comes over, you're not loading that guy down with quantum physics work... he knows how to unclog your drain or run a new water line. That's easy for him. He charges a high amount because his services are valuable. And I, for one, am happy to pay that plumber the high amount. It saves me having to invest far larger amounts in learning and tooling up to do it myself. I've worked alongside him a few times on projects that his clients had which required coding work alongside the hardware and sysadmin stuff, and each time I've had to badger him into charging double or more than what he wanted to charge. And of course the customers paid for it, because it was still a good deal and I could show them a conservative estimate that said the system would pay for itself in savings in under 2 years. When freelancing, those are my favorite contracts. Where you can show to the customer up-front that you will be saving them money in the long run. It's always much easier to sell them at that point, and I think the amount its going to save is a pretty good proxy for the value of the work.
- fencepost 7y agoSteer him to /r/msp or to Karl Palachuk's books. If his prices are that low he could likely increase by 25% or more and not lose any clients - and even if he did lose some odds are good that they'd be his cheapest and worst ones. If you double your rates and lose half your customers, congratulations! Now you have the same revenue plus available time to go find more customers fine with the higher rate.
- m463 7y ago"I don't want some small-time amatuer working on my $5000 power suit!"
- RantyDave 7y agoThat's no amateur, that's an artisan. A craftsman. Your personal tailor.
- antt 7y agoIf you want to be paid more: ask for more. It is astonishing how few people do.
- EGreg 7y agoAre there any examples of this but with virtual things? Sites, apps, digital goods? Some status thing? I can understand when it comes to physical goods.
- 55555 7y agoOne day randomly in the 80s IIRC, Rolex tripled their prices, and they haven't lowered them since. The same watch cost three times as much at retail one day than it did the day prior.
- Phillipharryt 7y agoAccording to ABlogToWatch, you're completely incorrect. https://www.ablogtowatch.com/rolex-prices-past-60-years-revealing-analysis/ https://www.ablogtowatch.com/rolex-prices-past-60-years-reve... It's a pretty stable increase, and adjusting for inflation it's actually a fairly low increase for a product that has improved over time.
- 55555 7y agoThanks, my bad.
- bparsons 7y agoIt is a rule of thumb in any client or contact work that the less you are charging them, the more difficult and demanding the customer will be.