We had a strange email come in a couple months ago. Actually, we get strange emails quite often, and if you buy me a drink one night I may share some of the better ones with you. But this one has stuck in my mind because it’s related to the topic of today’s post.
This person was writing to say that she had just discovered Oliver + S patterns. She wanted to buy six of our digital patterns right away, but she didn’t want to make the whole outfit included with each pattern. She only planned to use the top or the bottom of each, so she was asking that we split these six digital patterns in half for her and sell her just the half she wanted at half the price.
When I replied that we couldn’t do this, she fired back an email asking what the problem was. They were just digital patterns; it should be easy to do! I told her that wasn’t the case, and I pointed her to the Oliver + S Singles that are available. She responded that she wouldn’t be purchasing anything from us afterall.
When it comes to shopping, there are two types of people: those who want more for less and those who recognize that less can actually be more.
This person obviously fell into the first group. When I think of these people, I think of the audience of dedicated consumers that Walmart has cultivated and trained. These shoppers care more about quantity than quality. They focus first and foremost on cost because the lower the price, the more they can afford to buy.
In the other camp are people who focus on quality rather than quantity. They’ll shop carefully, looking for the best product at the price they can afford. They’ll spend more when they spend, but they’ll buy fewer items. They’ll also take greater pleasure in each thing they purchase and will hold on to what they buy for longer, making more use of it over time.
Most Oliver + S customers fall into the second group, and that’s why this email exchange has stuck with me. That’s not how most customers approach our patterns. Our typical customer doesn’t buy six patterns at a time. She purchases one or two. She’ll spend her time working through them, and will usually sew from a pattern several times. She’ll make each of the views. She may customize the pattern and make something original. Perhaps she’ll pair one of the separates in the pattern with a separate from another pattern to make an interesting outfit. She’s not a disposable crafter. She’s a deliberate sewist. She recognizes and appreciates the quality of the product, and she values the time she spends sewing because it’s (most of the time) a frustration-free experience.
At least, that’s how we hope people use our patterns. We know we don’t sell the cheapest patterns on the market, but we’ve never intended to compete on price. Instead, we want to compete in the market (and win) on quality—quality of the product, quality of the support we provide for it, and quality of the whole experience it allows our customers to have when they use it.
I’m writing about pricing today because in our recent survey we received many comments related to it. Pricing-related feedback fell into a few general categories.
- People commenting that the pricing on our patterns is too high
- People not liking the fact that there is a size-range split for each style; they would like to get the whole size range for the same price
- People not liking the fact that our digital patterns are priced the same as paper patterns
We don’t take our pricing lightly. If you took the Creativebug “Building a Creative Brand” course you heard me talk a lot about pricing—and making sure that you price your product appropriately. Pricing is one of the Four Ps, and it’s one of the most important things to figure out when launching and running a business.
We’ve always treated pricing accordingly. We look at pricing each time we release a new pattern or a new collection of patterns, but I don’t think we’ve ever shared our thinking about pricing with you. Your survey comments on pricing have made me realize that it’s time to do that.
But first, let me provide a little context. When Oliver + S launched in 2008, our patterns were priced at $15.95. For that price you received a pattern sized from either Birth-24 months or 2T-5. Each and every year since then our costs have gone up, but over the last seven years we have only increased our prices once. (And when we did that we decided to hold the pricing on our backlist patterns steady at $15.95.) We have been able to keep our prices down by finding efficiencies in our operations and through growing the volume of patterns we sell. Today for newer Oliver + S patterns you pay $16.95 for a pattern that includes a larger range of sizes than our line did in 2008. And that small increase of $1.00 per pattern is actually not bad when you factor in inflation. A $15.95 pattern from 2008 would cost $17.53 today if it had increased by the rate of inflation over those years.
So let’s turn to your comments on pricing from the survey. First off, throughout the survey many people said they thought our patterns were too expensive and they would like to see them priced substantially lower. Sure, I get that. Who doesn’t like to pay less for something? But we’re not going to be dropping our prices across the board. Our prices are in line with other top-tier, independent sewing patterns. We’re not the most expensive, and we’re not the least expensive. We are priced toward the top of the market, but there’s a reason for that.
We think of an Oliver + S pattern as being the doorway to a sewing experience. The price you pay for our patterns allows us to provide everything that goes above and beyond what you get in the envelope. We don’t charge you for the inspiration and ideas provided by our daily blog posts or make you pay to post questions in the discussion forums. We offer free patterns that get downloaded over a thousand times each day. (I sure wish we sold that many patterns day in and day out….) If you should ever email with a question or problem about our patterns, you’ll get a response in under 24 hours and often in less time than that—including on weekends. If you place an order from us in the morning, it will ship to you that afternoon. If I look across the landscape of pattern companies (both major and independent) and tally the ones that provide all these services to support their products, those companies can be counted with the fingers on one hand—with a thumb and a few fingers left over.
Even though you get all these services for free, there is a real cost associated with them. And I know what those costs are because I pay the bills for staff and freelancer time, website development and maintenance, hosting and bandwidth, warehouse services, and more each and every month. And I know that if we charged less for our patterns these things would necessarily have to disappear and the overall experience of sewing with an Oliver + S pattern would lessen.
It’s also important to us that we run a sustainable business—one that pays its staff and contributors fairly for what they do and that is operated in such a way that it will be here today, tomorrow, and well into the future. Sadly, this isn’t always the case in the world of independent pattern companies. Many are run on an ad hoc basis out of a spare bedroom as a hobby until the designer loses interest or decides it doesn’t make financial sense to continue (usually because she set her initial price too low…). Here today, gone tomorrow. And during the time we’ve been in business we’ve seen more than one burst onto the scene, get a lot of linky love in the blogosphere, and then realize that it’s harder to run a business than it seems. Again, if we were to lower prices on our patterns our ability to support them over time would see an impact.
Second, several people commented that they don’t like the fact that our patterns come in two size ranges. They would really like to be able to purchase a pattern once and sew from that style from ages six months to 12 years. Again, I can understand the thinking here. But as we’ve increased our size ranges over the years (our Oliver + S patterns are now graded into a total of 12 sizes) including them all on one pattern sheet becomes a usability issue—all those nested lines. Three or four years ago we actually considered doing this. We spent a lot of time looking strategically into whether it was a good idea. We evaluated the impact on the product, and we gathered input from people across the industry. At that time we determined that, for a number of reasons, keeping the styles split into two separate size ranges was a better idea. We haven’t seen reason to change that yet, but it’s something that we’ll continue to evaluate—along with some other specific suggestions about what is included in the package that were made by some of you.
Finally, many people said that they didn’t think the cost of a digital pattern should be the same as the cost of a paper patterns because they have to print the pattern at home. First off, I think it’s worth noting that many of our digital patterns are actually priced lower than their paper siblings. We have priced all our digital backlist patterns that do not run up to size 12 lower than they were priced when they were available in paper. And we have released a collection of Oliver + S Singles as digital only patterns that are priced much lower than any of our paper patterns.
Our more recent, front-list patterns are priced the same in paper and digital format, and that’s worth discussing. Most people don’t realize this, but the cost for us to have a copy of a paper pattern printed commercially really isn’t that much. It’s a small percentage of the retail price that a consumer pays for the product. The majority of the retail cost goes toward recouping our investment in developing the product. We spend months developing each of our styles. It’s expensive to do–both in terms of the time that Liesl puts into the process and the hard dollar costs we pay others throughout the process (illustrator, graphic designer, pattern grader, testers, photographer, etc.). These costs are the same, and need to be recovered in the same way, whether the final product is sold as a paper pattern or a digital pattern.
It is correct that when we sell a digital pattern we don’t pay the printing cost for one copy of a physical product. But assuming that all the cost of a digital pattern is borne by the consumer, and that there is no cost associated with producing and selling digital patterns, is an incorrect view. We have real costs related to the development, sale, and support of digital patterns that offset the small savings we see by not having to print another copy of a pattern commercially.
It’s time consuming and costly to produce the type of digital patterns we make; those nicely tiled pages don’t magically develop themselves. It’s not free to store those files on a server and to allow you to create a website account to download the large files multiple times. And our customer service costs to support digital patterns are far and away higher than the cost to support paper patterns. We spend hours each week helping people download files, open files, get files to print at scale, etc. These are all things that have nothing to do with the products themselves but with people’s computers, printers, tablets, and/or understanding about using the technology they own. For every one support request we receive for our paper patterns, I estimate we get over 50 support requests from people using our digital patterns. None of these requests are actually about an issue with the pattern itself, but we still provide assistance.
And if you’re still not with me on this issue, I would encourage you to do an all-in price comparison of purchasing a digital pattern vs. a paper pattern. If you do, you’ll determine that even though the list price is the same, our digital patterns come out to be less expensive than our paper patterns. The cost in paper and ink to print a digital pattern is less than the shipping and handling cost for purchasing a paper copy of the pattern. Plus, the digital copy is delivered immediately.
I’m sorry if this post has come across as sounding defensive. I suppose to a certain extent it is. We asked for your feedback, many of you told us you want to pay less for our product, and I’m saying, “No, we can’t do that for you.” I’m sure what I’ve written will make some people angry. And I would bet that this post will receive comments explaining how we really could lower our prices if we would only do this, that, or the other thing. We’re always open to specific suggestions, and I’ll be sure to read all your comments–even if I don’t respond to them directly. But I hope that this behind-the-scenes view of what goes into setting our pricing will help you understand why it is what it is.
That said, we will always continue to evaluate our pricing when we release new products, and we will continue to do everything we can to keep our prices as low as possible—just as we have over the last seven years.
I’ll be back in two weeks with my final post in this series.
Update (6/18/2015): This post has received a few comments taking me to task for being rude, “calling out” a customer, and degrading people who shop at Walmart. I’m sorry that the post has been interpreted that way. That was not the intention at all. I would never knowingly do any of those things, and I hope that those of you who know me personally and know of our company’s reputation can affirm that.
Perhaps, in hindsight, I should have left out the anecdote used at the start of this post. While it was in my mind as an example of the distinction I was trying to make while I was thinking though how to write this post, it might have artificially simplified the situation. If I had to do it over again, I would not use it because I would never want to cause offense–intentionally or otherwise.
Unfortunately, it’s too late to take it back now. So the best I can do is offer a sincere apology for any offense caused or taken. Please rest assured that there was none intended.
Update (6/22/2015): Please see this post for an additional apology to those whose feelings were hurt.