One of the most frequent questions I hear from crafty sellers new AND old is “How much should I be charging for this?”
A lot of beginners make some common mistakes and misjudgments, so here are some things to consider when pricing your goods, as well as a formula to figure it all out.
Here’s a big beginning mistake I see all too often: Pricing your item way below “competitors” (which I prefer to think of less as competition and more as similar shops, but that’s for another time). The reality is that pricing too low can actually discourage sales because people assume it’s of poor quality.
Another mistake is thinking of yourself as the target customer. If you base your pricing on what YOU can afford, you’re probably under pricing. Guess what? I can’t afford my own stuff. I’m what you call a “starving artist”. I can’t afford to buy designer clothing. Other people can, they just aren’t me.
Handmade goods mean attention to detail, quality craftsmanship, and a significant amount of TIME and SKILL, all of which mean HIGHER PRICE. When you’re pricing your items, I want you to repeat to yourself that YOU ARE NOT WAL-MART.
The bottom line is to remember that you’re doing this for a profit. If you spent $10 on materials, then you better be charging more than $10 for your pieces, or you won’t be able to do this for much longer!
I should also note, there isn’t necessarily a Right or Wrong way to price your stuff. You will find what works for you.
At the very least, there are two things you need to account for when you’re pricing: Materials and Labor.
For our example, let’s say you just made a cute tank top. The materials cost as such:
Materials
main fabric – $8 a yard
lace – $2 a yard
elastic – $1 a yard
For this top, you used:
1 a yard of the main fabric ($8.00)
2 yards of lace ($4.00)
1 yard of elastic ($1.00)
Your total for materials is $13.00
Let’s see about labor. You’ll need to decide on your hourly wage. We’ll use $10, which I think is the absolute minimum you should be paying yourself.
(Let me say right here that if you’re an experienced craftsperson, you really should be paying yourself upwards of $20 an hour. You are SKILLED LABOR. Anyone can scoop ice cream, that’s why they pay high school kids $7 an hour to do it. Not everyone can do what you do, and you’ve spent years honing your skill, so pay yourself accordingly. And by the way, if you think $20 an hour is a lot of money, keep in mind that a full time, 40 hour a week job at that wage is about $40,000 a year BEFORE TAXES. That’s lower middle class in most parts of the US.)
Okay, back to the equation.
Labor
$10/hour
For this top, you spent 2 hours working on it:
($10 x 2 hours)
Your total labor cost is $20.00
Add together the cost of Materials and Labor ($13 + $20) and you get $33.
Now hold on a minute… don’t go running off pricing your top yet, because $33 is NOT the price you should use.
Why?
Well, first of all, this is an extremely rough estimate as far as the cost of an item. There are a lot of “hidden” costs you’re not taking into consideration. For example- the cost of your sewing machine, the cost of your camera and your computer, the electricity used, the time it takes to photograph and list and item for sale, paypal fees, and on and on…. These costs are called “overhead”.
But also, $33 does not account for PROFIT.
I know, I know, you got $20 for your labor, right? Well, look at it this way. If you were an employee making this top, your employer wouldn’t make anything if they sold the top for Labor and Materials. Even wholesalers add on a bit of profit.
Most standard pricing models will tell you to take your “at cost” price ($33) and double it for wholesale ($66). Then you’re supposed to double it again for retail ($132).
My guess is that very few handmade artisans use that method to price their items. In fact, I would guess that most people (myself, included) wind up pricing their items somewhere between the “at cost” price and the wholesale price. That doesn’t mean you shouldn’t use this model, but since most of us WILDLY under price, asking you to try to get full retail price is going to sound like pure madness.
So at the very least, add on a small amount to account for overhead and profit. For this top, let’s say, $10. Even if you’re doing this just as a hobby, this will keep you in the black, so you can continue making cool stuff- even if it’s just for fun.
When you’re first starting out, it makes sense to keep your profit low (which in turn, keeps the prices low). But when you’ve got a decent customer base, don’t be afraid to increase your profit margin… and your hourly wage, for that matter.
When you decide it’s time to raise your prices and make more profit, I suggest you do so by raising your hourly wage. That way, you will be raising the price proportionally for all of your items. So if you decide you’re going to increase your wage by $2 an hour, add another $2 an hour on top of that to account for profit.
Anyway, for this example, we’ll tack on $15 for profit to make the total $43.
For my pricing model, this is what I would consider the wholesale price.
If you’re selling your goods to a store so that they can resell them, this is the price you use. The store will then mark the price up, usually at least doubling it. If you’re consigning, remember to compensate for the consignment fee (which is usually anywhere from 20-50% of the selling price).
If you’re selling your stuff directly to the public, it wouldn’t be out of line for your to double the wholesale price. In fact, that’s extremely reasonable.
A lot of sellers say they feel guilty for charging anything more than a few dollars more than materials and labor. Well, consider this:
Wal-mart buys material in HUGE quantities and has obscenely cheap labor. To make a similar tank top to yours, it costs them LESS THAN A DOLLAR. But they’ll probably sell it for $20. That’s a mark-up of over 2000%! Artists and crafters are the LAST people that should feel guilty for marking their pieces at a reasonable price.
Be forewarned that you will probably hear people make snarky comments like, “I could make that for $5” or “I could get that at Wal-mart for less.”
Ignore them. Why?
Multiple Choice Question!
These people:
A. have no experience selling a handmade item, therefore they have no idea how much time/materials/effort/skill goes into it.
B. have no respect for quality. All they care about is getting the cheapest piece of crap they can find.
C. resent that your awesome piece of work is out of their price range.
D. are jealous that you have your own business making rad things.
Correct Answer? Probably all, or at least more than one of the above.
Whew, that was a lot of info, I know. How about a 10 second recap?
- Prices too low can actually keep you from getting sales.
- Don’t price by what you can afford.
- Don’t forget that delicious word, PROFIT, when calculating your price.
- Remember that Wal-Mart is a greedy scumfuck corporation that’s ruining the global economy. 🙂
- Naysayers can suck it!
That’s it! Hopefully I have banished all questions regarding how to price your goods and made you hate Wal-Mart, all in one fell swoop!
Also, check out this article, which has some great points about wholesale vs. retail pricing, selling your hobby crafts, and more.
198 thoughts on “How to: Pricing Your Handmade Goods & Products”
Thanks for the tips. I’m just starting in setting up a business and this issue is the one that scares me most. Luckily we don’t have Walmart in Ireland but i’ve seen pictures of those who do and sorry to say anyone shopping in walmart uses more than one trolley and in turn generally can’t afford anything nice after that cause its all gone down their throats!
You are most welcome, Nevie!
The good thing about pricing is it’s not set in stone. You can always change your prices or put something on sale. And you’ll get more comfortable with it over time.
Good luck with your business!
Thanks for the advice in this article… would you mind giving a little more? 🙂 I know for a fact that I am WAY underpaying myself, partially because I’m just starting out and am going for low profit to hopefully get a customer base. But pricing is, indeed, one of the scariest parts of running an independent business…
Here’s my problem. I can honestly say that I would never, EVER, buy a tank top for $76, no matter what it was made of or who made it. Now this is not because I disrespect your skills, don’t understand handmade items, or just want to get the cheapest price–because I, too, make handmade items and want a price that is worth my time, creativity, and skill. I just can’t justify paying more for a tank top than my entire weekly grocery bill.
So, there must be people out there who ARE willing to pay this much, since you and so many other handmade sellers out there are succeeding… but did you start selling your items at this level, or inch your way up there? Right now I’m pretty much charging double the cost of materials, so I doubt I pay myself much more than $2 an hour. I just don’t feel right charging $50 for a tote bag.
Any advice? 🙂
Questions are more than welcome!
To answer yours, no, I didn’t start out charging this much for my stuff. I probably started out charging about the same as you- double the cost of materials.
One difference when I first started was that I was selling on Ebay, so the bidding dictated the price. And the main reason I stopped selling on Ebay was because the bidding dictated the price. 😀 There was a brief period of time when people were getting what their items were worth on Ebay, but that time seems to have ended.
However, even when I first started my website and had a set price for items, I was not charging as much. Raising prices happened slowly over time.
Generally, one of two things would happen that made me realize it was time to raise prices.
1. If I’m working on an item and think to myself, “I’m not getting paid enough for this.”
2. I’m selling so many items, I can barely keep up.
I hope that helps. Especially when you first start, it can be so fun that you don’t really care how much you’re making. But at some point, if you really want it to be a successful business, you have to start charging what your time, expertise, and quality are worth.
Good luck!
Thanks for the advice! You’re right, when I started about a year ago (maybe more), it was just because I wanted to sew so much that I figured that I couldn’t keep everything, so I might as well sell it. That was my last year of undergrad, though, so production dropped off… a LOT. Now that I’m starting back up again, I’ve changed the focus of my shop. I’m donating all of my profits to various charities I support, so it would be nice if I could make a little more money than I have been.
Thanks again, love your site! Lots of great resources here!
Lex!!! What happened to the forum?! *weep* I know you’re still getting this thing back on track, so I am being patient lol. The site looks really cute so far though! 🙂
Hi Mary!
I’m not sure yet if the forum will be back. It takes so much time just to battle the spam, let alone moderating the legitimate content.
For now, I recommend checking out DiyScene.com for your crafty talk needs. 🙂
Its great to see this article, I wish every fan of DIY clothing would read it! It sucks not being able to afford awesome clothes, but it also sucks to always be explaining to people how much time it takes to make something, not to mention materials/equipment/overhead costs.
New website layout looks awesome, by the way!
Thanks so much, Annie!
I always hear people say that everyone should work retail at least once in their lives to gain the experience of having to wait on people… I think everyone should make something and try to sell it to gain the understanding that it’s not as easy as it looks!
Thank you for your wonderful article on pricing! … I loved your post & will direct others to it because I get the pricing question all the time from those new to selling their handmade items.
I have been selling my handmade items since 1981 (jewelry, pottery & hand-sewn items) & your article is one of the best I’ve ever read on pricing! …I am sick & tired of people saying “I don’t need the money, I just do this for fun”. So they price their wares ridiculously low! …They may have a sugar-daddy husband so they don’t have to work & can make things all day long at no profit, but if they are selling something similar to mine & they price their stuff to “have fun” & don’t make a profit, then they are making others (like me) who actually NEED the money to make a living look like our prices are high! Every artists hates people who undercut their prices, so my advice is this: If you don’t “NEED” the money & are only selling your things for “fun” then stop selling your stuff & just give it away to friends & family! OR, keep your prices in the same range as other crafters & artists!
I wanted to add, that if you don’t AT LEAST get minimum wage for your work, you may as well work at the seven-eleven! If you sell at Saturday Markets or Art Fairs, walk around & talk to other artists & check out their prices… And don’t forget to add the cost of your gas & wear & tear on your car in to the equation & ink for printing out your business cards, etc & also shipping costs for anything you order online! …Keep ALL business receipts, because all these things can be deducted from your taxes! Keep a notebook next to you & log your hours spent after each session working on something. In the end, you can average-out your time… Keep simple records & do the math, after a while, your pricing will come easily to you. Do yourself a favor & NEVER under price your work! …It’s easier to lower your prices than it is to raise them! Also, don’t use prices like $17.99 (it sounds cheap!) instead use whole numbers like $18 or $18.50… You don’t want your quality work to sound like it comes from K-mart! & NEVER apologies for your prices! You worked long & hard to make that one-of-a-kind item!
As Lex stated, I can’t afford to buy my own things either! But if I price them too low, not only will I loose money, but my things will look cheap! …I am not Walmart, I am more “Neiman Marcus”, with one-of-a-kind QUALITY artwork made with love & care. And I treat my customers like I would like to be treated. They are always right! …I’d rather loose money than loose a customer! …I have to mention this: Sell in the part of town that best suits your product. If your product appeals to city-folk, then sell your work downtown, if your work is pricey, you’ll have to go “where the money is” (in the more affluent parts of town) whereas if it’s something anyone can afford (lunder $20) then you can sell it anywhere. It’s worth the drive to go where your customer base is. Also, have things of varying prices, if your things are priced at $50 then also sells something that is under $10 (your “bread & butter” items). People have to “think about” anything over $20, but if you also have items for under $10 or $20, then they will buy on the “spur of the moment”.
My advice would be if you don’t “need” the money & are only working for “fun” & to make enough money to buy more whatever (fabric, beads, yarn) with, then why not ask for donations instead & give all the money above your actual cost to your favorite charity. There is a lady in my area who makes & sells wonderful hats & gives all her profits to the American Cancer Society… If you knit or crochet, there are groups that meet in local Senior Centers that make hats for the homeless. There are others who sew or crochet very tiny clothes for parents of stillborn babies to bury their tiny babies in & others who make dresses out of pillow cases for girls in Africa who have never in their lives owned a new dress! …So if you don’t need the money & simply love to make things, check out all the wonderful organizations out there you can help! & if you can’t find one, start up one yourself!
Thanks so much for the tips and ideas, Cody!
Having a variety of items in different price ranges is a really good idea, and I think it helps some people with pricing the more labor intensive items. Sure, not everyone can afford a $100 dress, but if you also carry some small items like brooches, jewelry, small bags/purses, then you can have something for any budget.
Lex! Thank you so much for taking the time to pass along this info! I had a lot of questions about how to price my items, and did feel a bit of guilt setting them “high” in my opinion. But not anymore! I am going to re-do all of my pricing!
Thank you so so much. This was extremely helpful. 🙂
You’re welcome, Shawna!!
Thank you a million times…this is where I get stuck and you made it clear.
Glad to help!
I wish I could have you at my side for my next craft fair to deal with those tutters. You are SO right. I am not Walmart and I’m not my own customer. I hope I can remember this. Very good advice here, thanks!
Thanks for all these tips I have started putting my prices up, my friends & I like the comment “I could make that for less” our reply is that’s funny I do, don’t people realise that we’re at the markets in all weather to make a profit, thanks for your great ideas.
nice article and very true statements!
Another brilliant article, I could repeat what everyone else has said or save time and just tell you I agree with them all!!
Thank you.
hi, i’ve been thinking alot about that, and like other bloggers YOU ARE RIGHT! the only thing is that i don’t have a page or a shop, they just ask me for something, and i just do it and sell it! and like you said, there is a lot of people that said is TOO EXPENSIVE or i can get another like that in ” watever ” store! the only difference is quality, time and lots of love, when you make something…. because i do! hehe God bless you
Fantastic article, thank you for laying down the law ;P Oh and I already hated Wal-Mart which I often call Evil-Mart ;D lol
This is brilliant and every crafter/artisan/artist should read it many times over-perhaps daily as an affirmation. There is an alarming trend on many artisan sites to undervalue their craft and that cheapens the whole site. If we don’t value and respect what we make, why should the customer? My repeat customers value something that not everyone else is wearing and that was made locally and with passion….not in an overseas sweatshop by children or underpaid workers.
Thank you so much for THIS article also! I’ve recently started selling and want to open a store in town later, I had no idea how to price things :/ i no longer feel bad about my pricing. Actually I feel a bit ripped off by myself lol
You rock….thanks for putting everything I had in my head on your blog! I have recently had alot of problems with others doing exactly this in my small home town. It truly hurts everyones bottem line. 😉
I had been surfing the web trying to find some advice on pricing my crafts (and how to handle a customer who talks down a price of one’s crafts) and came across your blog. I couldn’t help but smile at your recap 🙂 This artical was VERY insightful. I suffer that ’emotional’ dilemma from time to time about how to price my stuff, but you defiitely ease me concerns. 🙂 Thanks so much for the advice! 😀
Thank you for posting this! I’ve been making lots of items for awhile now and will be launching my online store soon and have been stressing out over pricing. This information is really helpful! I felt guilty pricing anything more than 5 or 10 dollars over the cost of the materials of what I make but now I’ll be less hesitant to charge what my items are really worth 🙂 Thank you!
This article was very informational and gave me a little insight of how to charge. But I still have a little problem I am making a blouse for someone that I know and she probably will want a few more of that same style. I know how to sew some but I have never sewn for other people how to charge starting out new?
It really depends on how much you think your time is worth. I’d suggest charging $10 an hour to start with (and don’t forget to charge for supplies in addition to that if she’s not providing them).
Very helpful article for price items. You are so right–there is nothing wrong with profit AT ALL. After all, that is why anyone is in business. Which makes me wonder — it is SO contradictory — why you are calling out Wal Mart as “a greedy scumfuck corporation that’s ruining the global economy”. Oh PLEASE! Don’t drink the cool-aid on that one! They employ 2.2 million people around the world, and NO ONE is holding a gun to their head to work there. (they are probably grateful to have those jobs). Yea, they sell cheap stuff that poor people can afford. But that only makes our stuff look great, and we can make a profit. And if you think they are ruining the global economy, you need to get your information from other sources, or maybe expand your group of associates in order to broaden your views. Just Sayin… MK
My issue with Walmart is not the cheapness of their products- though the fact that using sweatshop labor makes it possible for such cheapness IS something I have a problem with. Yeah, lots of corporations, maybe even MOST retail corporations use overseas sweatshops, but that doesn’t make it any more right for them to do it.
Walmart is the richest retail company in the world, and yet comparing Walmart employees to the employees of all other large retail companies, 40% more Walmart employees are on Medicaid and other public assistance programs. And remember that it’s me and you paying for those programs.
Walmart could still easily make their multibillion dollars a year in profits by paying their employees a living wage. In fact, the irony of employers like Walmart paying rock-bottom wages is that if they paid their workers more… THEY’D BE SPENDING MORE MONEY AT WALMART. Because guess where they all shop?
It’s greed, pure and simple, and I don’t accept that there isn’t a better way.
Hi, I just found this and I would really love some more help! I am hand sewing fabric on the front of denim shorts and on the back pockets. But I have no idea how much I should charge!! Because it’s not a lot of material, I don’t know what to do. All I do is, buy fat quarters and thread then sew them on. Please help me. I need your help ASAP!! Thank you!!!
Hi Faith-
Your best bet will still be to do the math for materials, labor, and then add on some profit. Aside from pricing so low that you aren’t making enough money or pricing so high that no one will buy, there really is no “right” or “wrong” to pricing.
As a basic example, I’d say something like this would be reasonable:
Materials:
$20 – denim shorts
$5 – fat quarter
Time/Labor:
$20 – 1 hour at $15/hour, plus an additional $5 an hour for profit/overhead
$25 + $20 = $45
Obviously, your numbers might be different depending on the cost of your materials, your preferred wage, how much you’re comfortable adding on for profit, etc.
Article, I take it you dislike Walmart!
VERY POOR USE OF ADJECTIVES!!!
Do you kiss your Mother with that mouth!
You’re goddamned right, I do.
You are incredibly awesome, Lex. 🙂
You ROCK, Lex!
Oh, and Windy? When you use “your” before “mother” there is no need to capitalize “mother”. Also, when asking a question the correct punctuation is a question mark not and exclamation point.
Oh my! I just spit my coffee out. Best.Response.Ever!
& you’re correct about Wally World. Sadly, we now have buyers that automatically think everything is too high because they could get it cheaper if it was mass produced, bought in bulk, sold in a warehouse setting. Their ethics alone is reason enough NOT to shop there. It took me a while to convince my family of the things you mention. We now GLADLY pay higher prices for better quality or things that are locally grown, produced, etc. Which brings me to your article.
I am an artisan. My family owns a “small business” but is in no way, shape, or form small compared to what I am trying to do. My husband constantly tells me to include my labor. I haven’t yet but today is a new day! You have provided great insight for those of us that over-think our work and price as though we are the demographic in which we should be targeting. My husband’s “small” business hasn’t been around for 3 generations because they under-priced anything! The exact opposite, they price according to quality of goods, labor, market value, etc. Even family members have to pay wholesale + 10%.
Why should I feel like I guilty because I price my products using the same formula? Going to book mark this & read it any time I feel the urge to knock the price down. You’re correct, if quality is there and you cannot buy something comparable, you the artist, set the market value! Thank you so for this, it only confirms what my family has told me for years. “If I undervalue myself others will too”. Time to turn over a new leaf!
I have not sold anything I have made yet. After reading this you have most definately calmed my nerves about pricing! And I share you dislike of walmart, it’s pretty gnarly out there!
Hi,
I was looking for some info on the best way to add cost for custom orders and how you would present this to your potential customer?
Thanks!
Good question!
I try to determine how much longer I will potentially spend on a custom order compared to a “ready to ship” item. I often spend quite a lot of time discussing the details with the customer, looking for and presenting fabric options, sketching, etc. When it comes to the actual construction, I’m often doing at least some additional pattern making or drafting as well. For me, a VERY conservative estimate would be that I spend at least 1 hour more on a custom item than a non-custom item. So I charge accordingly- the average price of a non-custom top in my shop is probably about $60-65. The average price of a custom top starts at about $80.
In terms of explaining that to a customer- I think most people expect that custom made costs more, but I have had people ask why. I simply explain that custom orders are more time consuming.
Hi,
I just found you and appreciate all the advice about establishing prices for my craft items. One of the things I may have missed, is ‘our’ items, at least mine, are one of a kind, unique, and not another exactly like it, so many thanks for helping. (My next tray
will be $75. instead of $50.) lol
Thanks…
Thanks for your tips. I wholeheartedly agree with your position regarding Walmart.
I love the article! it is true. I have priced things cause I don’t want to charge to much and I don’t sell much. When I price them correctly (like you said) I get the sales. I love the folks that say, I can do that. I once said to someone who was pissing me off. “Why don’t you try to make this, come back and let me know how you made out and then we can talk”. It shut her up so fast. I know I can make anything, I have been crafting my whole life. I tell people how awesome there stuff is, but I try to never let them know I can do it myself. I don’t want to hurt there feelings or anything. I love seeing folks try. I am always the one to help them to make them be successful. I will surely post this article on my webpage, once I got it up again.
I think my favorite was the comments about Wal-mart and being scumfuck. Also the excuses you hear.
If you got the skills, screw it. Go out there and see what you can do. Times are tough. Even if you stock up on what you make and sell once in a while or whatever. Do it, you never know until you try. Good luck to all of those who are doing it and making it work! Peace and Love!
I love it how you put it: naysayers can suck it! and that was what I was mostly afraid of, having to hear other people say ‘oh, your things are too expensive/overpriced yada yada yada’. You have just convinced me that…well, yeah… they can just suck it! LOL thanks so much for this article!
I wish people who want to buy handmade would read this, as well. Someone asked if I would hand crochet their son a rainbow hat, and I offered to do it for her at an incredibly low $20 price. I was literally charging myself minimum wage plus materials. She came back and said she found a hat at a reasonable price. REASONABLE PRICE. It stung. A lot.
Awesome awesome awesome!!!!! Especially how Walmart is the scumfuck of the world!! Thank you!!
This article was a HUGE help! I have taken accounting classes-I forgot about overhead expenses.
I am making windsocks soon to be posted on craigslist and etsy-this made pricing SIMPLE.
I was comparing my prices to Wal-mart and Jo-Ann Fabrics–NO MORE! I have quality work and someone will appreciate what I have to offer.
I need to use this info to help me price my classes I want to teach.
I’m thankful for finding this site-Happy Crafting and Happy Thanksgiving!
I am just starting out selling my items on line. I struggle so much with pricing. I make these fabulous stick horses that cost me a minimum of $26.00 in materials and take about 5 hours to make. If I use your basic minimum calculation I would sell them for $80.00. Right now I sell them for $45.00. I don’t think I would sell any at $80.00, no matter how cute and soft they are. Am I wrong? I make refillable decorative pens, and sell them for $4.00-$5.00. Would anyone pay $15.00 for one of these? HELP !!! As the new year is approaching I want to do the right thing for me AND FOR ALL THE OTHER CRAFTERS OUT THERE. I could really use yor help with this. Any help/encouragement would be appreciated. Thanks, Jill
Jill-
Never assume that people won’t pay a fair price for your items. It’s a mistake we make far too often.
Take me, for example: Halloween is my absolute favorite holiday. I’m obsessed. But I can’t imagine myself or anyone else spending more than about $50 on a costume. (Of course, I have routinely spent 30 hours making my costume.) And yet every Halloween, I’m booked for 2 straight months making costumes that cost 3-4 times that.
You’re making less than $4 an hour right now. Even if this was all just for fun and you only really want to break even, you’re probably losing money once you consider all of the overhead that goes into selling. So I would absolutely raise my prices if I were you.
It’s an easier pill to swallow if you start small. You don’t need to jump straight to $80. Go up $5 for now, and plan on going up another $5 in a month or so. My guess is that your sales will hold steady.
Another thing to remember that should make you feel better about raising prices: you can actually sell a lower volume but make the same (or more) money. For example: if you sell 5 horses a month at $45, you’ll make $225. But if you get to that $80 price point, you only have to sell 3 horses, and you’d be making MORE than when you sold 5 at $45.
Thanks so much for this handy and candid break-down. It’s funny to see what you suggest as a minimum for labour – I get paid a third of that and I’m rather well paid by standards amongst my peers. This really helped me with my first quote (hopefully first of maaany), thanks so much.
Very Nice what you write help me to know more to sell my handmade
I appreciate your post here about what to charge… and from experience, I can say it is hard to charge what we should, I learning :>)
But here’s my situation – I knit doilies – I could attach a picture if there was that option… – anyway these doilies might only use 3 or 4 balls of thread – so we are looking at 20.00 for the thread. Plus I put beads around the outside edge adding another 10 – 20.00 However the item takes HOURS. Oft times there are 165+- rows and by row 100 they are taking me over an hour a round….
I once had a guy say to me that if I had been paid a penny for every stitch I had knitted I would probably be rich SO I thought I will price on of those doilies by the stitch… 850.00 for the smaller ones (24″) and over 1000.00 for the larger (36″) ones.
I have been ask if I would sell them BUT when you say 1000.00 people think you’ve lost your mind.
I am aware that people really have no idea the amount of time they take- they just see that they are unusual and pretty.
Someday maybe I’ll have some one that doesn’t faint :>) when I price them but in the mean time I will knit them for my children, nieces and nephews when they get married.
Thank you for your info.
Laurel
Hi there, this information was really useful , thank you.I am trying to start a small business doing knitting for people, mainly children and I also sell things on a Country Market.I generally buy the wool and on completion of the item charge twice the amount that I paid out. Other people sell their things at a drop down price,but they don’t seem to sell!!
My things sell because I like to make them unique to me and people come back to me.
I am proud of what I do and I will NOT sell cheaper items just because other people do
My neighbor and I recently took part in a craft fair. She knits and crochets beautiful doll clothes, scarves, kids’ sweaters, etc. and uses nice yarn, not the budget knitting worsted. One customer balked at paying $30 for a simple scarf, but my neighbor explained that the yarn was $13 a skein, and it took her 8 hours to do the knitting. She was not at all apologetic, and the customer ended up buying the scarf. I make and sell fresh and silk floral arrangements and I’ve always struggled with pricing. Generally I double the cost for materials since I can get those at wholesale, and figure $20/hr for labor. The only sales I made were to another floral designer who understands what goes into a piece, and to the lady who helped a lot with organizing the show because I deeply discounted my price for her as a sort of thank you.
I currently rent a “space” in a local warehouse in Lancaster, PA. I also pay commission on top of that. I, too, found that pricing was difficult in the beginning, but it’s getting easier. I make hand-made subway art signs and one-of-a-kind painted furniture. Sure, I get the furniture for rock bottom prices at yard sales, but I keep a few things in mind when I price. I only buy excellent quality furniture, and if it isn’t, I fix it up so that it is. I spend lots of time designing for each particular piece. I use only high quality paints, and I lovingly hand-paint them. I bought an oak chest for $10 and sold it for $315. Was it worth it? You bet! It was an original piece that will never be duplicated, and I spent a lot of time on that baby. As I have seen what sells, I’ve increased my prices ever so slightly. It’s working pretty well. And, once I was at a craft show. The seller had a sign on her table that said, “I KNOW you can make this, but WILL you?” I thought that was pretty clever. Great post!
This is a wonderful read! I very much enjoyed your advice and your writing. I recently found a supplier for the rice bags that I like to turn into purses and hope to have a booth at the farmer’s market this summer.
Hi Lex,
I’ve been a woodworker for over 25 years but never did this for a living. Long story short … I am now. Many things involved in this process (business plan, insurance, marketing, etc.) Pricing is just one small piece of the puzzle.
I am continually told by my sister-in-law that I don’t charge enough for my products. Just starting out I need to build a customer base and that is my reasoning for my pricing.
I look at my pricing on three levels:
1) “The Hook”. This is the smaller items that I make to get the folks into the booth (Christmas ornaments, etc). This generally is the bulk of my sales for a show.
2) “Middle Pricing”. Moderately higher priced items such as picture frames and some “Table Art” ($150.00 to $350.00). Like wise, this is the area that the folks that appreciate quality at “reasonable” pricing (based on my target customer pool for that show) are beginning to feel like stretching their wallet and thinking about larger pieces.
3) “Special Orders”. Generally this is the much higher priced items such as furniture.
This is the section I struggle with the most. I never really know how much to charge for any one piece. Generally these are pieces that I’ve never made before and therefore have no idea of how to price them. Using an hourly formula for this section seems a little steep. Do I charge someone for:
1)Design (computer search time and the like)?
2)How about utilities? Tools take manpower and electricity. I also live in Up State New York …. so heat is a GOOD thing in the shop.
Other than looking on other sites to see what fellow artisans are doing …. how do I calculate these costs?
t.
Ideally, you would absolutely charge for the design time and utilities.
In most pricing models, utilities would fall into “overhead”. So when you figure the labor/materials cost and double it for the wholesale price, that doubling is intended to cover all those additional costs that you don’t sit down and tabulate on a per item basis. That being said, if you want to figure out exactly how much each piece costs you in terms of your utilities, rent, equipment costs, etc. and then incorporate that into your pricing, you wouldn’t be wrong to do so.
A lot of us probably also lump the design work into the overhead, but ideally you would charge an hourly wage for the design time, the same way you probably do for the actual woodworking time. After all, your unique design aesthetic is likely a large part of what sells your items.
It took me YEARS to come up with a special order pricing system that worked for me. I found a notepad the other day from when I first started, and my base price for a special order dress was $35. I can’t believe I was charging that little! My base price for the absolute simplest dress design I offer is now about $75-80. Most people that come to me don’t want a simple dress, so after they add all the bells and whistles, my special order dresses probably wind up being more like $150 on the low end. That’s what works for me: I have a base price for the absolutely simplest dress, and then I have literally probably 50+ options for customization. If they want 1 row of ruffles, it’s an additional $10. If they want 4 layers of ruffles, it’s an additional $60. Lace trim is $10, and so on and so forth.
My special order pricing winds up being quite a bit higher than what I charge for my “ready to wear” pieces. If someone wants one of my “ready to wear” pieces specially remade in their size, I charge the special order price. Custom costs more, and most people understand that.
What it all comes down to is what you’re comfortable and happy with and whether or not it’s sustainable. If you can survive happily on minimum wage doing your work, who am I to tell you that you’re pricing wrong? For all my lofty advice, if I tabulated the actual hours I put into my work and figured my hourly wage, I’m probably making less than minimum wage. But I’m happy and I’m frugal, so I make it work.
Thia article was shown to me by my bestie, who gets a text of everything I sell with the question “how much” attached. Everything you’ve said is things I’ve read/heard before, but be it lack of sense or confidence I can’t put my real worth into pricing. But hopefully your no nonsense attitude on the subject will come to mind next time I think “how much”. Quick question, however, how do you go about pricing for family and friends. Seems like I just make them all whatever they want with no thought to my own empty wallet.
Thanks,
Jessica freed
http://Www.comealongfawn.etsy.com
http://www.thevelvetbow.blogspot.com
I talk a little about dealing with the family and friends issue here:
http://whatthecraft.com/my-5-rules-for-custom-orders/
Thanks for this article. I’ve used something similar for pricing my jewelry and tweaked it over the years. Depending on where I sell at Art Fairs, I can overhear–“ooh, such reasonable prices”; or “my, you aren’t asking enough for this.” In my immediate area, there are “crafters” who don’t actually want to make a copy but want to buy my designs for “nothing.”
For pricing custom items, I give a estimate quote based on a similar item in stock and then email with a final, firm quote once I’ve priced the cost of inventory. The quoted price includes about 1 hour of design/redesign time. I tell the customer that any “excessive” redesign will be charged at my hourly rate ($25/hour for all but wire-wrapping; #35/hour for wire-wrapped items.
Note for Jessica: I often charge my wholesale price to family and close friends. That way I don’t lose cost and labor. AND, family/friends are happy with the “deal.”
Good article.
I do have to disagree with you on the doubling to cover overhead. You should cover your overhead before you double, triple, etc. your costs. To often, crafters forget about shipping costs or car mileage/fuel when determining costs. We sell candles and air fresheners, and it is actually cheaper for me to drive 300+ miles round-trip ($45 in gas)to pick up wax than to have it delivered. Depending on the amount wax at $1/lb can cost an additional 75 cents/lb for shipping. If I only look at the price per lb on the invoice, I will be losing profit.
I am also a stickler about sales tax. Some states require us to put the price before tax on the tag or sign. All of the signs at our craft shows clearly state “price+tax”. When I’m talking to customers about the product, I even say, “The air fresheners are $5 each, that’ll be $5.30 with tax.” Why should I take the sales tax out of my profits. Even with this clearly stated, some customers are surprised that I make them pay the tax. They’ll say, nobody else charges tax, to which I say, “I’m required to collect and pay the sales tax, so if you want it you’ll pay the tax.” No one has walked away.
I am often asked if they can get a bargain for buying two items. The answer is a definite NO. If they buy a dozen, then I make it a bakers dozen. I will not cheapen the perceived value of my products by selling for less than they are worth. If they don’t see the value in my products and won’t pay $5 for an air freshener that will last 3-4 months (often up to a year) when the cardboard ones in the store cost $3-4 and they are gone in 2-3 days, then I don’t worry about them. Tempting them with 3 for 2, etc. means that my prices aren’t real and the value is less than the stated price.
Educate your customer so they understand why it is worth the price you are asking. If you just expect them to pick up the piece, check the price tag and pay you, then you’ll be in for a hard time. I tell each customer about our products, the benefits of using them, and how they are made. We also have samples of all of the air fresheners out so that they smell them well before they reach the booth.
Quality and education trumps price. We sell wax dipped toilet paper for $10/roll. We’ve only had competition at one show (and we do 30-40/year for the past 6 years). Our competition sold a similar product for $5/roll – half of our price. AT the end of the show we had sold about 30 rolls of wax dipped toilet paper, and she had most of her inventory left. Why? Our quality was far above our competition. They smelled better, looked better, we had more designs, and scents, plus I educated them on what they were and how they could be used. We have many referrals and repeat customers. One customer even told a friend, “they cost more, but they are worth it because they last so long.”
Don’t be afraid to raise your price. We started selling our air fresheners at $4 each. The next week we raised the price to $5 each. $5 was easy because it was a single bill (plus tax). Sales increased have remained high. By the way, our costs are less than $1 each, so we make over $4 profit each. We have sold more than 1,000 in a weekend.
Look at increasing profit by bundling, especially for more expensive items. Say I sell medium pillar candles at $20 ($8 cost) and large pillar candles $30 ($12 cost). By bundling a $1 tin plate and $1 pip ring (total of $2 cost) with the pillars, I can raise the prices of the pillars to $25 and $35. That’s $3 more profit for each bundle. Look at signs like, “Best Buy” and “Better Value”. Pricing the small and medium products near the large product will make the larger product look more valuable and the customer will often go for the largest item. don’t think this happens. Look at Value Meals or subscriptions. $20 for a year, $35 for 2 years or $40 for three years. Want to bet how many will go for a three year subscription?
Finally, regularly evaluate your costs and price. If your costs have gone up, then make sure you raise your prices.
Great article! I’m about to start sewing for an interior designer. I have no clue what to charge for sewing. Any advice?
It really depends on what you think your time is worth. The same way you’d expect a certain wage if you were applying for a conventional job, I imagine you have some idea of what you’d like to be paid for your time?
For starters, I would say the bare minimum should be whatever minimum wage is in your area, but since you’re performing a skilled job, you really should be paid a skilled wage. I encourage people to start with $10, but that’s really well below what almost any skilled person would be paid, plus you have to consider that a self-employed person’s costs are much higher since we get no benefits or sick time.
In my opinion, $12-15 is probably a reasonable starting hourly wage for a skilled person. And as you get more skilled, your wage goes up.
Wow, what a great article! Thank you for all the tips. I always wonder how much I should have priced my handmade products, but now I have a better idea.