So the other day we were shopping for shoes. So we're walking around the mall. My brain's turned off. I'm just following Jenny around like his own beast, staring at my phone. I'm just scrolling through Instagram or whatever. And all of a sudden, Jenny stops and falls in love with this pair of tennis shoes. These ones, these ones right here. See? See? They're at these ones. These ones are here. Are these cute? So she tries on the shoes. I look at the price tag because what else am I going to look at? I pick my chop off the floor. What do you know? Those are the shoes Jenny just has to have. Never mind the other two dozen pair of shoes in the store. She has to have these which cost more. Women, right? I mean, we guys, we never make emotional purchases like that, do we? But on our way to checkout, we saw these basketball shoes that were in a glass case behind the counter. And some of them were over a thousand dollars for a single pair of basketball shoes. The guy behind the register said that the shoes in those glass cases were for display only. And that when they get shipments in, people are lined up down to the food court just for a chance to get their own pair. So then we started thinking to ourselves, how does a company charge this much for a pair of tennis shoes and then sell out? I'm about to tell Jenny to walk away from a pair that only costs $150. So how in the world does price work? And how can we as business owners set prices like that? That's the topic of today's inaugural episode of Makers Money. Okay, I can hear your comments now. We're not Nike, we're not Adidas, we can't charge those type of products. Okay, fine. Sneaker companies are crazy. Let's take a look at another luxury good Peloton bikes. You know, the exercise bike that's ridiculously expensive that brings a New York City spin class right to your living room, those Peloton bikes. I bet you didn't know how they started with their pricing structure. So here's what the CEO of Peloton said in an interview in 2018. In the very, very early days, we charged $1,200 for the Peloton bike for the first couple of months. And what turned out happening is we heard from customers that the bike must be poorly built if you're charging $1,200 for it. We charged $2,000 for it and sales increased because people said, oh, it must be a quality bike. They increased the price, they increased it and got more sales because they increased it. That is so contradictory to what common knowledge says to do. Now, I know some of you are thinking, oh, well, yeah, the only stupid people buy that exercise bike. I would never spend $2,400 on an exercise bike. Okay, fine. I'll give you the exercise bike. But how much did you spend on your truck? How much did you spend on your tennis shoes? How much did you spend on that fest tool domino? How much did you spend on your table saw? You got a saw stop. Those are pretty pricey. And Peloton just raised their price again and saw a sales increase. They just changed the price to $2,200 a bike. So I hope you're as confused as we were when we heard all these stories. We were literally left scratching our heads going, so what do I do about pricing my work? What do I do about pricing our cutting boards and sharkootary boards? Because clearly I'm missing something. These companies are making billions of dollars with their pricing structure. And I don't understand what's going on. I need to learn something new. So we went in research it. We read all the books. We read up on pricing and what we found is, and we're going to give you the answer here. It might sound confusing, but what we found is price is fake and made up and arbitrary. It's not real. And I know that sounds weird. I know it makes you feel uncomfortable, but that's the truth. There is no such thing as set price. There's no such thing as overpriced or underpriced. If you think something's overpriced, it's only overpriced to you. There are 8 billion people in this world. Somebody is going to think that that's a decent price for whatever they're buying. Whoever's selling the item is the one who sets the price. And I also know that that answer is completely useless to you. So here's some tips. Don't ask yourself what it's worth. Your biased, your amaker, your emotionally invested. So you should be the last one determining your prices based off of your own subjective opinion. And also, your spouse shouldn't be determining the price either. They're probably upset that you're spending too much time in the shop and they want you to go out of business quickly. They're never going to be in the market for what you're going to sell. They're just going to have you make it for them. We asked ourselves, why are we pricing our work for the people that shop at Walmart and target when we could be pricing our work for the people that actually want and appreciate handmade art? And whether you believe it or not, the work that you're creating is really nice artwork. You guys create functional art. We see your pictures all the time. You share us pictures on Instagram, on Facebook, like everywhere. You find our email address that we've hidden from you and you send us pictures of your work there. You guys have an absolutely amazing capability to build incredible things. I don't know where the lack of self-confidence comes from, but here I'm telling you, you guys make good stuff. So do not feel guilty or like you're ripping people off when you raise a high price. You're just charging what your free time is worth. And plus, people care about it more. When they spend more money, we could go in a whole lesson on that, but that's for another show. People care about their stuff more when they pay more money for it. They're more gentle with it. They take care of it better. They treat it more special because they spend a little bit more money on it. So if you want people to appreciate and genuinely love your work, price it that way. So there's a really easy way to solve this. And this is exactly what we do with our business. You go to the luxury provider of whatever product or service you're in the market for. For us, for our cutting boards, that's boosts. You see them everywhere on TV. Every TV chef is using a boost cutting board in the TV show. So that was the standard. We knew that there was demand at their price point because they like they've gone before us. They've tested the market. They've been around a lot longer than us. They know what the market demands. And the market is demanding a solid maple cutting board at about $130 retail. And their margins are a lot better than what we can do here in our garage, especially when you consider that we spend $10 a board on packaging and another $8 on shipping. They're making a lot more profit on that $129 than we are on our price of $116. In reality, our price is really too low. We need to address that. Can you put that on our to-do list? Okay. See, even we mess up sometimes. We could honestly get $200 to $250 for our personalized ship to your front door cutting boards. Sounds crazy to me. I know it's crazy to you. I'd never pay that. You'd never pay that. But there are tons of people. I mean, Jenny, I cannot build cutting boards faster. Jenny has outsold all of our inventory and the next two batches of cutting boards. I'm about to make. We cannot keep these cutting boards in stock right now. And it's a wonderful problem to have, but it also means our price is too low because we have more demand right now than we can handle in the production facility. So we got to be raising our prices or hiring more help. So bottom line, I'm sure what you make is far better quality than the imported stuff that you see at Walmart or Target. Also, the people that shop at those stores are not your customer. So if something isn't selling, lowering your price isn't the answer because we just discussed several examples where people raised the price and the sales went up. There is demand for luxury goods in your corner of the world. You just have to put in the work and the time to find it. You can't just lob your work out there and hope that people come to it and like what you do, you have to spend time finding the customer who's going to pay what your work is worth. So what does that look like for you today? Take action. Get rid of your low prices. Get rid of them on your Etsy store, get rid of them on your website, get rid of them on your Facebook page. No longer do you charge a low-ball price for the work that you do. Yeah, you enjoy it. Yeah, it's a passion project for you, but that does not mean you should be losing money on every sale. Enjoying your work is a bonus, not a form of payment. Go look up the luxury goods in your corner. If you work with leather and you make purses, go look at Louis Vuitton's website. If you build dog houses, go look up dog mansions. I know that's definitely a thing. I don't even know anything about that world, but I know that's a thing. Find the luxury version of yourself and start pricing that way and start to reverse engineer where they're getting their clients from and find them in your own local area. Once you do that, then you're ready to go out and find the best customers in the world. It's the people that are willing to pay anything to have your product. That will be our next topic on Makers Money. So subscribe to get more content like this. If you like this video, it's our first one in this series. Let us know down in the comments. Give us a thumbs up. We look forward to doing a lot more of these in the future and we hope you guys liked it.