Underselling: Why Discomfort is a Terrible Pricing Strategy

Tara Gentile, Scoutie Girl, pricing for small business, cpalmer, origami money heart{image credit: cpalmer on flickr}

by Tara Gentile of Scoutie Girl + Tara Gentile

We’re going to talk about something uncomfortable: money.

More than just our daily dealings with money, we’re going to talk about how you price what you sell.

I’m going to assume for a moment that you’re a woman (and, if you’re a dude, just keep reading because this all likely applies to you) and that, as a woman, you feel a deep, unapologetic connection between what you offer and who you are. As nurturers, mothers, sparks of the divine feminine, we are programmed to think of what we birth as a part of us.

Yup, I said it – your business, products, or service is your baby.

You gave birth to it and now someone has asked you to put a price tag on it.

And perhaps more than anything else before in your life, you just don’t want to. But without a product or service with a price tag, you don’t have a business – you have a time waster (AKA hobby).

There are numerous ways to determine a price for what you sell. You can generate a wholesale price by adding the cost of labor to the cost of materials and doubling it. You can determine what you need to make per hour to pay the rent and buy ramen noodles. You can check out what others are charging and price yourself well below.

Regardless your method, the number you come up with likely still doesn’t “feel” very good. You probably still think it’s too high – “you” couldn’t possibly be “worth” that.

So you abandon the formula and pick a price that represents what someone “reasonable” would pay.

Nota bene: the quotations mean I’m being a just a bit sarcastic.

Underselling – yourself, your customers, and your colleagues – is a big problem. It’s just wrong, philosophically & financially. It will ruin you, anger your customers, and frustrate your colleagues.

So how can you get your head around charging a higher price for what you do?

Be kind to yourself.

Underselling yourself means that growing & maintaining your business will be as hard as it possibly could be. Forget market factors, customer issues, and supply problems, underselling yourself makes it nearly impossible to carry on with a business over the long haul. All the other pressures of running a business are magnified.

  • Relieve your anxiety. In both your personal life & business, your anxiety levels go way up when you’re underselling yourself. You end up feeling like everyone is out to get you – but you just don’t know why.
  • Create an ideal work environment. When you undersell yourself, you have to produce more than is possible in working a reasonable period of time. This is often confused with “growing” a business – marketing, communication, customer service – but you need to charge enough to cover your time for those parts of your business as well.
  • Build something sustainable. Your business feels like a race that never ends. You’re not prepared for expenses as they come up. You have no cushion to purchase the coaching, supplies, or support you need to move forward. Pricing appropriately means you’re ready for what comes your way.

Ultimately, underselling yourself is a sure way to see your business collapse. That’s unkind to you as a business owner and, when we’re talking ethics, we have to be aware of how we treat ourselves. Mindful earning is a way to be kind to yourself.

Be kind to your customers.

We assume our customers want low prices. But for as many people as shop around for the lowest prices, there are at least as many who shop around for a great fit, a perfect package, or a personal connection.

  • Do the best work for the best price. It’s okay to add value into your products or services – versatility, for instance – but that value is worth something. Having a reasonable price means that your customer gets your best work and not something much less.
  • Maintain a great relationship. When you price responsibly, your customers end up being people you look forward to connecting with. You don’t resent them or blame them for the failures of your business. Instead, you celebrate them for making your business a success!
  • Deliver what was promised. Just as underselling means you’ll be overworked, customers often get less than was promised when you price too low. You run out of time, you fail to meet deadlines, you can’t produce to your high standards. The customer deserves what you promise so price accordingly.

Your customers deserve better than bargain basement. And they’re willing to pay you for what you do best. You just have to ask for it.

Be kind to your colleagues.

Some of the greatest losers when it comes to underselling are your colleagues. They work hard to build customer bases, reputations, and fantastic products. But when you decide to compete on price, they may feel forced to alter their business to keep up with the market.

  • Maintain a market that competes on need rather than price. There will always be different needs (beginner to expert, pretty to edgy, blue to green) and a huge variety of businesses can operate side by side without ever needing to compete with each other.
  • Support others bottom lines while creating your own. Seek out similar businesses to yours that offer similar services in a different style. What do they charge? Are their customers happy? Consider how your pricing stacks up to theirs.

It’s true that paying special attention to underselling will mean that you will raise your rates to levels that are uncomfortable to you.

It’s also true that, until you become more comfortable with your life as an entrepreneur and money in general, you will be uncomfortable with your rates no matter how low they are. Selling what you love is hard.

Discomfort is not a good pricing strategy.

Kindness is.

Be kind to yourself, your growing business, your customers, and your colleagues by learning to respect your product & it’s price.

Tara Gentile is a coach & teacher who empowers passionate people produce & profit. Discover her unique philosophy on creative entrepreneurship at taragentile.com.


  1. Stacey says:

    I know I’m not pricing my work the way it should be. And every time I read a post about pricing strategies and how underpricing hurts more than helps, I say I’m going to fix my prices. And I have yet to.

    Tara, I think you’ve finally pushed me far enough to actually do it and do it right. Thank you 🙂

  2. Amen to all of it! I’m currently in the midst of this struggle trying to package and price some new projects I’m working.
    I definitely think some of my struggles with appropriate pricing go back to childhood and the issue of money (or lack thereof) in our house. To this day I still feel like I have to justify every dollar I spend (even if it’s just to myself), so therefore I’m cautious about charging too much for items because I assume so many others think like me. Even though they don’t.
    Not to mention if I’m charging appropriately, then I just might make MORE dollars- lol!

  3. Gaia says:

    yes!! What a great article! The idea of building something sustainable is SO important. Especially because most creative’s work is so intertwined with “real life,” you really want to build a career/company that supports you in a holistic way.
    Sing it, lady!! thanks for this.

  4. What are you in my head? Freaky – exactly what I”m struggling with!

    I’ve been battling this for over a year now – I have a price now that is still high (double/double theory), but have come to realize that I need a wholesale price to sell to stores and a retail price to not compete with the stores on my site.

    A HUGE comfort right now is that I can create a sale price and that price is both in my comfort zone, still makes me money, and who doesn’t like a sale, come on 🙂

  5. lesley says:

    thanks for shedding a little more light on the topic, tara. there are SO many posts out there about pricing, it gets a little overwhelming.
    i think there are so many reasons i charge what i do, but you’re right, one of them is because i always wonder, who will pay this for my items? or, rather, would *i* pay this for my items? it reminds me of something you said in a post ages ago, *i* am not my target customer.
    anyhow, thanks for this post, i really do need to do some more work on this. and yes, please, no more underselling. this is rampant, especially on etsy, and it just hurts everyone.

  6. Melissa says:

    What a timely article to read. I’m weighing a wholesale opportunity, and I came to the site to look for advice, and saw this article. Ahhh, perfectly written! I need to pin this up near my sewing machine! Thank you!

  7. Jessika says:

    Thank you all for your great comments! I was really excited when Tara said should would write about the ethics of underselling for us-who better?!
    This is something I have also struggled with & it’s a very fine line. Since I dye all my own wool & stitch everything by hand I have had a hard time pricing to reflect the huge amount of time I put into each piece. Its funny because I have no problem charging a competitive rate for my design & marketing work. But my handmade work is something I have really struggled to attach a monetary value to. Thank you for this fabulous post Tara & for bringing the idea of kindness into the pricing equation.

  8. MOXIELisa says:

    Pricing has always been such a hard thing for me and it’s nice to know there are others out there that struggle with the same thing. I have learned to become more comfortable with my skills and products, which helps tremendously when pricing.

  9. Ez says:

    This is such a fantastic and well-written article about a topic that is generally much easier to avoid than confront. I couldn’t agree more with the “Be Kind to Your Colleagues” portion (and all of what you shared really). Thank you so much for posting this!

  10. Alexis Neely says:

    Tara, thank you for writing this. The key I’ve found for me (and the whole way the money map came to be) was by me needing to understand what is the least I could charge w/o underpricing myself. So many people out there are teaching “charge as much as you can” “how you can increase your fees” and while I think that it’s very important to claim your value, it’s equally important to know how little you can charge and still be sustainable.

    That way, you never undercharge and you can increase your fees as you feel more and more value from what you do and the outcome/experience you deliver.

    Love to you,

  11. Devon Smith says:

    Thank you! This is a great article. Running a business being an Artist is particularly hard for pricing… I see so many people underselling themselves, or (particularly with prints) selling cheaply made things that it effects how people view your prices. Sometimes I worry my prices are too high – but I’m barely covering costs.

    It’s a tricky thing, running a business. I hope everyone reads this and takes it to heart.

  12. Tara, as always, brilliance! What I love most about what you’ve said is how underselling affects so much more than just the seller and buyer. It frustrates me to see people try to copy and then undercut in price, but I’m as pained for them as for me because I know they’ll either work themselves to death or go out of business, or both.

    There doesn’t need to be a WalMart in the independent arena. Cheap stuff is easy to be had anywhere else you go, so I hope people will read this (and your other linked articles) and really take it all to heart.

  13. Derek Lau says:

    Well put ! I started my business in 2006, and got very frustrated in 2008 with the amount of money I was making compared to how many hours I was working (labor plus account management, networking etc). In 2009 I increased my rates by 250% (from 40/hr to 100 hr) I had one main client that always paid up front so I kept his rate at 50/hr, and charged all of my new accounts 100hr. This allowed me to hire another editor and gave me more freedom to do work when busy – or go make sales when things slowed down. This year I raised our hourly rate to 120 and kept

  14. Derek Lau says:

    -kept my main client’s rate at 60hr. Now i have 2 full-time employees (which can add a different type of stress 🙂 and a studio for us all to work in. The point is that I would have been spinning my tires, working crazy hours and not have continued to grow without the price jump….I was scared to do it in 2009, but it almost seemed like the companies I wanted to get business from took me more seriously with the higher price tag !

  15. Thankyou. What i liked about this post is that you address the fact that it is something that is in your head and ways to get around it as opposed to just saying its bad and leaving it at that.

    Thankyou. this is something i constantly struggled with you have put it in a way i think i can get my head around it .

  16. This is such a good article – thank you. I am constantly struggling with pricing. I sell handmade invitations and cards that take a lot of time to make yet I’m always comparing my prices to other cards that are just printed- not embellished. Most of my customers feel that the cost per card should go down significantly if they order a higher quantity. But for me more means more work. Thank you again.

  17. Jeanie says:

    I tackled my pricing structure last weekend. I decided to use a formula suggested on Crafting an MBA (as wholesale is starting to appeal to me as an option). I’m probably still underpricing my time, but I was brave enough to correctly price some of my items. I keep reminding myself when I shop in a retail store I’m always drawn to the item with the bigger price tag. Yet I had to knock it out of my head that lower prices are good for *my* products. Crazy thinking. I think this will be an ongoing battle to find the ‘comfortable spot’. I think as long I’m revisiting the issue often I can avoid underpricing as my confidence in myself grows.

  18. Wow, I’ve heard this advice a few times over the last few months and I have agreed, in principle – but your points about how you will run out of time and underservice your customers totally got my attention – my business has been suffering from this issue and I don’t really think I made the connection between that and my pricing until now. My sincerest thanks for this post – I couldn’t have read it at a more perfect time!

    Much thanks,
    Christina 🙂

  19. We have raised our prices and it has not effected sales. I believe you have to consider your target market. My market is not going to buy a chair at a big block store so I’m not going to price to compete.
    When talking wholesale numbers I feel people aren’t even doubling labor and materials. It is mental, so be kind to yourself and just do it.

  20. This was an eye opener for me. For an item that is hand knit, I think it is hard to price what the item you made is worth when time is considered, no one would be able to afford it. But I do agree, I need to increase prices and not undercut myself or my colleagues.

  21. It’s funny. I am (was…) a soapmaker. I am also an aromatherapist. I specialized in handcrafted 100% natural aromatherapy soaps that got media exposure in places like Martha Stewart Living, writers from the NY times, and more. I say this not to brag, but rather to say that I had a product that got a certain level of attention. Eventually, despite all this, I wasn’t earning any money. So I raised my prices – $7-8 a bar typically, and $9 for the very premium soaps. Then I was able to wholesale and still earn money. Remember – I was using costly raw materials – essential oils – and doing a fair amount of wholesaling, and my wholesalers were charging far more than I was for my product and being quite successful.

    Evidently, I OVERpriced to the external world because I arrived at what was a fair price, given my expenses and my desire to eat things other than ramen noodles. I got paranoid. People thought I was a snob. Expectations of me went through the roof. People got rather snippy with me. Eventually nobody bought and I went out of business. By this point I was burned out, exhausted, and resentful. Same result as underpricing.

    As a compromise, I tried offering a lower priced range of soaps. They didn’t move.

    Why didn’t I drop my prices again? Think about the statement THAT would have made. Besides, if I dropped my prices again, it ended up being the same financial result as going out of business.

    So, I think there’s a middle ground. Don’t rip yourself off, but don’t price yourself out of the market either. And some things, evidently, won’t bear the price points required to sustain an artisan. I miss my soap company 🙁

    • Jessika says:

      Just to jump in Michelle, I am sorry you had such a hard experience with pricing & with your business. Maybe now that you have taken a break there is an opportunity to relaunch and rebrand your business so that you can essentially start fresh with a new market? Since there is obviously a demand for your product & you have gotten media attention I would think there is still an opportunity to build a successful business. I hope you manage to find a pricing structure that works for you & that allows you to eat more then ramen noodles!!!!

  22. Thanks, Jessika! What I took from my experience is that we do have to be careful when we honor ourselves by pricing our products to earn a fair wage – we have to consider our market and, importantly, we have to be honest about what we’re willing to sacrifice to earn fair pay. I’m willing to bet that when you raised your prices, you lost some customers, but gained others. We have to be willing to take these risks for the betterment of our businesses and our own personal happiness. I’m still looking at the other mistakes I made and, once I have let my feelings sort themselves out a bit, I may indeed try again… for now, I am happy to support all of you as you forge ahead with your beautiful and VALUABLE work.

  23. maike rinaye says:

    Great post. Thanks so much for sharing. As a small business owner who just started up, pricing makes me CRAZY… it’s easily the part of business I hate most. Your post though, encourages me to know that I did spend the time scoping things out, and I can stay priced right where I am, not just for me, but more especially for my customers, so they can get the absolute best service possible.

    Thanks again!

  24. lulu says:

    Great article, and perfectly in line with what another instructor said at a workshop I recently attended. You’re helping me to figure out this whole pricing mystery. I wonder to myself, though, if artwork is / should be priced differently?

  25. Thanks so much for this candid and informative article. My family is always telling me -Make sure you are not underselling yourself, they see how hard I work at the creative idea stage, then actually making the creation, the photos that need to express the piece and then the story to go along with it. All that takes time, so it is hard to put a dollar amount on all of that. The bottom line is the connection you make with your customers, you want it to be a very good expierence so your reputation is a good one. That’s what I am working on building for my business.

  26. Glenda Hopp says:

    Thanks for the supportive post. I recently had to rethink my pricing and tried every way I could not to raise prices. But when I really looked at my expenses and the time I spend on things like photos and managing my web site, they had to go higher. Now I can offer discounts or free shipping from time to time and not just break even.

  27. Kate Kiley says:

    Wonderful article and right on target! As women, I think we’re not as comfortable talking money as most men – and that gets us into trouble. Thanks for reminding us that our work is every bit as valuable and we deserve equal compensation – now I just have to put that theory into practice in my own business and life!

  28. R.Shelly says:

    This is a really great post for me to read right now. I recently started posting artwork once a week on my blog to try and raise money to go to an artist residency that I got into. I priced the work really low and felt really awkward about it. The work didn’t even sell at that price. I realize now that it may not be the best way to present myself. This post makes me want to try a different approach that I will be proud of.
    Thank you.

  29. elizabeth says:

    Thank you!! I constantly struggle with this and often end up juggling my prices around. More information on such a grey subject is always helpful!

  30. Donna Petersen says:

    Thanks so much for a great post. Just starting out with Etsy and finding it hard to price things. This post is just what I needed. I never really thought before to consider all my time I spend on the item, from creating, gathering, photos and listing, etc. Your point about how you will run out of time and underservice your customers got my attention. I need to be kind to myself, my business, my customers and my colleagues.

  31. LeAllyson says:

    I really believe I need to raise my prices. My concern is how do I do that? Do I slowly change my pricing by a little bit each month? Do I just make the change I think needs to be made all at once? Do I leave what I have for sale now alone, and increase prices on my new items?

    I want to be mindful of the expectations people have from their past experience with me, and yet make progress to the right pricing.

  32. Anna Gray says:

    Thank you for an excellent article. I totally agree with what you’ve said. I do price my work correctly, to cover overhead expenses as well as direct ones, and I do severely hate to see somebody who values themselves below zero point. After that customers come to expect me to do so (which I’m not going to :)). To me, it is as simple as that: you want to do it for free – keep it a hobby! You’re in business – then charge for your work!

  33. Candi says:

    Excellent advice! Right now I have my items priced a little to low and they are not moving that great, so I am going to raise my prices so that my wholesale prices can be at 50% of my retail pricing.

  34. Pam says:

    I think you hit the nail dead center when you said that it’s hard to sell my babies! that explains why I have always in the past either given away or taken just the cost of materials for my work! I was finding good homes for, rather than selling, my ‘labor’.
    Brilliant article. Thank You!

  35. Amy says:

    Well said this was a refreshing and great article! I really enjoyed it and think so many photographers need to read this. By working together and educating the industry we can bring the value back to hiring a professional photographer.

  36. sara says:

    thanks so much for this! your article has given my partner and I the courage and motivation to start charging more for what we make… we’ve been trying to compete with large outlets, so afraid to put off potential customers with what we’d be hesitant to spend (however nice the item – we’re very broke!). This means that despite hours of labour we’re still selling at high street prices. now I get that the average Etsy shopper (where we sell) is cool with spending a little more, that’s why they’re on a handmade site.
    never again shall we undersell! 🙂

  37. Shelley says:

    It’s so true that pricing makes us uncomfortable. It’s easy to under price to try & attract sales, but really this strategy doesn’t seem to be working & even if it did, I’m not doing myself any favors. I’m not paying myself & more customers wouldn’t change that (0 x 10 = 0, 0 x 100 still = 0) Thank you for the reminder that handmade is worth more & we should be pricing to market to those willing to pay for that extra value.

  38. I agree with every word. “Selling what you love is hard” – and sometime you feel it’s priceless. I’m making jewelery for a decade and still find it hard to price or sell them.
    Thanks for the tips and for the excellent post!

  39. Joanna says:

    Great article! I have only been able to learn about this (and am still learning) over time. I have seen that by raising the prices on my items I have changed my customer base for the better. When I only charged very low prices, my customers were people (like me!) who were scouting hard for a bargain, or didn’t have much money and often ended up feeling badly about spending any money at all. I got too many requests for returns or complaints. Once I raised my prices, things improved dramatically. I now seem to have a different set of customers. They are happy to pay for whatever it is they want, and are much less likely to have any complaints. I still need my partner there next to me to remind me not to under-value the items, because I can still feel uncomfortable pricing things for so much higher than I would want to pay, but it is hard to argue when I can such a big improvement. We are making more money, and doing less work, as we don’t need to keep the volume of sales as high as we used to. Don’t use your self as a measuring stick. Your marketplace is worldwide when you sell online, and just remind yourself of all the people out there who would be willing to pay a fair price for your items.

  40. You’ve hit it on the head with this, Tara. As an artist and business owner, it frustrates me no end when my colleagues charge less than living wages for their work, driving the price down.

    And from the other side, I have to say I have always ended up regretting it when I’ve undercharged out of hunger or desperation.

    I think pricing is one of the hardest things we do. It takes a lot of tweaking and trial and error. Not to mention consulting with colleagues — often a friend can screw your head on straight when it comes to pricing! (It’s a lot easier for me to advise someone else on price than to set my own!)

  41. Fab. article. Great advice..just hope I can follow it!
    It is very hard to price my creations. I have tried searching similar shops carrying similar items, made with similar materials. They are usually priced higher than my items, and they are selling more than I am. I take pride in my designs and workmanship. I have quality items, many very unique. Just shows you how right on your article is.
    Now to build up some confidence in myself!
    Thank You!

  42. This is a great article.. I know a few friends who simply price their work under that of their colleagues…it may work for now, but it is not sustainable in the long run and it diminishes quality. As a designer, I struggle with pricing every day- you stated so well in your article, our service/product is connected to us, making it difficult to put a monetary value on.

  43. Zoe says:

    Very encouraging article, thanks! As a new business owner, putting a price on my products was initially difficult since I had always considered what I did a hobby. When you love what you do, price doesn’t matter, hence the starving artist. I’m getting much better at it, trying to find a happy medium, not over pricing nor underselling.
    Thanks once again for writing on this subject!

  44. Cara says:

    Thanks so much for this post. I think every maker I’ve ever met at shows struggles with this issue. I have raised my prices to a point I feel comfortable with, but I know I will have to continue raising them (or offering higher end products) to sustain my business. I second the person who said that they feel OK charging a high fee for other types of work, but not for crafts. I never have a problem asking $50 an hour or more for freelance work. But I think that’s because I’m getting a check from a big company rather than an indie store owner, who I know personally. I’d like to hear more from really successful etsy sellers on how they came up with their prices and stuck to them.

  45. Stasya says:

    But without a product or service with a price tag, you don’t have a business – you have a time waster (AKA hobby).

    Great line! Personally, my Etsy shop IS kind of a hobby instead of a business – I donate 20% of my profits to charity as well – but I can totally understand not undervaluing my items.

Comments are closed.