Putting a price on your craftwork is one of the most intimidating first steps to selling. But don’t you know there’s an easy way to price your crafts? We’ll cover that in a minute, but first I’m going to open the book on some traditional pricing formula and strategies used by many handmade business owners.
How To Price Your Crafts
There are a lot of pricing formulas suggested around the web that might work for you and the handmade products you’re selling. For instance, if you check the Etsy Forums here are some pricing formulas on how to price your crafts:
- Cost + Labor x 2 = Wholesale x 2 = Retail Price
- Materials + Hourly wage + Overhead = Wholesale Price
- Material + Labor + Expenses + Profit = Wholesale x 2 = Retail
- And many more…
So how do you decide on what pricing formula you should use to price your crafts?
First, it’s very important to make sure that you are making a profit on your handmade items and not just guessing what materials are going in there.
Make sure that the formula you use is:
- Simple and complete – you want it to be easy to use.
- Flexible – you want it to have the flexibility to be used on one product to the next.
- Unique – you want it to be unique to your business.
- Accurate – it should include your business costs as well for your hourly rate
What you should consider when pricing your handcrafted goods?
You have to value your own work or no one else will, which means you shouldn’t lower your prices with the intention to sell more. Cheap prices give the impression that your goods are cheap. The quality of handmade goods you’re creating will not only be judged by your prices but also by the quality of materials and businesses you associate with. Choose wisely.
Be confident with the price you set and if someone asks you, explain to them the quality and materials they are made of. If you do not have confidence stating the price for your items, no one is going to be willing to pay that price.
As part of your market research, you probably looked into what other people are pricing with products similar to yours. That’s a great way to get an idea of what people charge in your niche. Take advantage of it. Offer something they are not, which can include, freebies and discounts for bulk buying.
Comparing yourself and your products to what someone else is selling and charging does not factor in YOU – your level of expertise, your costs, your time, the value your customers receive, where you get your supplies or your uniqueness.
If you decide on a price and you think the market won’t respond to it, there’s something you can do about that – it’s not the price you need to change, it’s your marketing, your design or the way you produce your work that should be considered. Get creative and see how you can adjust the item to reduce your costs or create a branding image that people will want to pay a premium price for.
How did you decide on the pricing for your crafts? Leave a comment below and let me know.