Pricing handmade items can be difficult. We’re often plagued with thoughts such as “Am I charging too much?”, “Nobody will pay that!!!”, “I don’t want to rip anyone off”. All too soon we find ourselves lowering to what we think is a ‘reasonable’ price only to discover that we’re earning so little we might as well be paying the customers to take our products away.
You may even convince yourself that you’re doing it for the love of it. A noble thought…but, unfortunately, love doesn’t pay the bills. Don’t sell yourself short. It undermines both you and the industry as a whole. People start to see handmade as being cheap rather than the quality, unique items that they are.
There are no hard and fast rules when it comes to pricing your products. No ‘one size fits all’. If you’re having issues, ask like-minded handmade businesses or consult a business expert for advice. The following, however, are a few things to help you get started:
Research, research, research
A little research goes a long way. Take the time to get to know your market. How are other makers pricing similar items? Do you share the same target audience? How are they calculating their price? Don’t be afraid to ask around for advice. Sure, some people may not wish to share, but in my experience I have found most people more than willing to help a fellow maker.
Work out your costs – honestly and realistically
Sit down and write out all of your expenses for making your items. You’ll be surprised at how quickly it adds up. Fabric, interfacing, hardware, thread it all needs to be accounted for. Don’t leave something out just because you only use a small amount. That little becomes a lot when you’re making numerous items. It might only be a dab of glue now, but it will soon be a bottle that needs to be replaced.
What about the pattern, machine maintenance, electricity, website maintenance, insurance? You don’t want to sell hundreds of items only to discover that you haven’t made a cent.
There are a number of ways to use your expenses to determine the retail price of your item. Here are some suggestions worth researching further:
- Multiply the cost of materials by 2 or 3. E.g. materials x 3 = retail, or materials x 2 = wholesale, wholesale x 2 = retail.
- Multiply the cost of materials by a percentage. E.g. 40 – 60%.
- Add an hourly rate for labour and work out how many hours the item takes to make.
Give yourself permission to earn money
Your time is valuable and you should be compensated accordingly. Working for $2 an hour might seem like a great way to get started, but it’s not sustainable and will end with you tired, miserable, and no longer enjoying your beloved craft. You are not ripping someone off by charging realistic prices. If someone likes your product then they will be willing to pay for more than the cost of materials used.
Reduce costs (without reducing quality)
Find ways to reduce your costs to allow for lower, but still realistic prices. Can you speed up construction with a production line rather than individual items? Are you buying items wholesale where practical?
Stand your ground
Once you have decided on a fair price, stick with it. Don’t let people talk you down. You have done your homework and know that the price accurately reflects the cost of making the item. If someone isn’t willing to pay the price, then they’re not the customer you are looking for. Kindly thank them for their interest and move on to someone who appreciates the time and effort that goes into a handmade item.
Most importantly, be confident in yourself and your hard work. You are worth it.
What advice do you have when it comes to pricing your items?