What the heck is sliding scale pricing? And Why Okay Shoe doesn’t run sales
Why Does Okay Shoe have some products listed as sliding scale?
Sliding scale, or pay what you can (PWYC) refers to a price range set for customers to pay for a product. For example, the Okay Oracle Deck is set at a sliding scale price of $40 - $60. Community $40, Sustainable $50 and Supporter Rates $60. The Community rate is the minimum amount we are able to charge in order for us to be profitable, the Sustainable Rate is the retail cost of the Okay Oracle and the Supporter Rate allows us to offer financial flexibility by investing in our business monetarily.
Sliding scale retail practices started in zine fairs, allowing a pay what you can model to disseminate information to as many people as possible. Sliding scale has become a popular tool in service-based industries like movement studios, naturopathy, and therapy. I haven't, however, seen a lot of retail-based companies offering sliding scale on their goods. Which is where Okay Shoe comes in!
Sliding scale retail practices are how we are able to cast a wider net for those unable to participate in art communities as they exist now, by creating affordable and accessible art that breaks down barriers to entry. We design products stemming from the belief that no one should be priced out of enjoying art.
How do you price something that is sliding scale? + How do artists create an accessible art practice that is also financially sustainable for them and their customers?
We would LOVE if more businesses So how do you come up with sliding scale tiers?
Okay Shoe uses a version of the keystone pricing strategy to find our retail price: Retail price = [(Materials cost x 2) + time ($20/hr)]. This formula is how we are able to generate our baseline for retail pricing. And then we step into the world of even-more-no-rules and get to make up the rest.
The Okay Oracle Deck retails for $50, I like simple numbers (this is also easy to communicate to customers) so we discounted the deck by $10 to make up the lowest tier at $40. Now we need to create an opportunity to recoup the potential loss of $10, so we add that $10 to 50 to create our highest tier of $60. Even if everyone pays the lowest amount, you still have to be profitable. The lowest tier cannot ruin you or your business (aka your lowest tier cannot only be made up of your materials cost). You won’t be able to create beautiful art or serve your customers if you go out of business. It doesn’t do anyone any favours to discount your art, however we feel that with sliding scale there is space for consumers and artists to both enjoy art in a way that is financially sustainable.
So why even bother with sliding scale? And why doesn’t Okay Shoe have sales?
This structure allows people to self-identify and choose how much they can afford to pay, or, potentially pay more to facilitate access to mindfulness products that others might not be able to afford. Sliding scale pricing is built so that if everyone pays the minimum amount that allows us to be profitable, while the higher end of the tier makes up the difference that consumers of the minimum or medium tiers pay. This practice allows us to be fair and transparent in our pricing structure. Because of this we rarely run sales throughout the year. We approach selling in a way that is non-urgent and doesn’t hinge on our artists having to lower their standards or fees, just to make a sale. Our pricing is fair and flexible to begin with. We also run sliding scale pricing over on our Patreon!
Okay Shoe is actively challenging the wellness and art industry to be more financially and physically accessible by catering to the needs of those from a diverse economic status. By adopting a sliding scale retail pricing model and engaging consumer mindfulness, we are broadening the market that we are able to serve. Accessibility can change the world through mindfulness and is the how and the why of the intentions and creations of this business model. Okay Shoe is dedicated to creating products that are financially accessible for our audience. Art should be enjoyed by all, and by creating a transparent and sliding scale art practice. Art is for everyone to make and enjoy. Even you!!
The future of capitalism (or maybe a future without it) is OURS to dream up. But we have to brave uncertainty and our own scarcity complexes, and use creativity and experimentation to discover it.
Do you run a business that offers sliding scale rates? We’d love to hear about your experience in the comments!