You’ve decided on your craft niche, created your first items, and now you need to set your price. Learn what every crafter ought to know about pricing handmade products,
Deciding how much to charge for your crafts is an important and sometimes daunting decision. When determining what your products are worth, there are some helpful tips to consider.
How Much Can You Produce?
Determine how many hours you can put into producing your product. Then determine how much you need to be paid per hour or week to produce the products. Make a note of this figure. This amount will be your weekly cost of labor. For example, if you need to make $10 per hour, working 40 hours per week, the weekly labor cost would be $400.
Next, you will want to decide how many products you can make in that amount of time. Calculate how much it will cost to make one finished product. Make sure to total all the cost-of-supplies required to make one completed product.
Once you have the cost of supplies for each product, multiply it by the number of items produced in a week. A simplified example is if your supplies per completed item costs are $1 and you can make 100 items in a week, this figure would be $100. Now add this figure to your weekly cost of labor. Continuing with the example here, that would be $400 (labor) + $100 (supplies) = $500)
Calculate Your Price
To calculate how much to charge for each item, divide this figure by the number of products produced in a week. Our total of $500 (labor and materials) divided by 100 finished products in a week would be $5.00 per piece.
Now that you have calculated what to sell it for, do a little market research and compare this cost to similar products. If your price is more than similar products on the market, you may need to reduce it by cutting hourly prices, finding less expensive supplies, or increasing your production time. If your price is significantly less than similar products, consider raising your price. Etsy and Pinterest are great places to search for similar items with the prices listed.
This might sound complex to the beginning crafter, but it is a great way to calculate what price range your product will sell at so that you will be able to make the profit you desire. Don’t forget that supply and demand will also come into play, but it’s a great place to start!
Extra Expenses
This equation does not calculate expenses other than labor and materials. You can figure in the weekly costs of any other business expenses and add them to the weekly labor and material costs.
When assessing your supply costs, there will be, in some instances, a single completed item that will only use part of the supply. For example, one yard of fabric may make ten products. If this is the case, calculate how many products can be produced from the supply and divide by the cost of the supply.
I can’t stress enough that you should always research before mass-producing any items. One way to do this is by attending craft fairs and noticing what similar items are selling for from the different vendors.
If you want, ask the vendors questions about their products. Most will be happy to discuss their products with fellow crafters, but some might be less enthusiastic. I always stress the importance of healthy relationships with crafters, but some are just in the business of making money and might not want to share their secrets. If you find someone willing to talk to you, take that opportunity to soak in every word and use it to your advantage.
Don’t Sell Yourself Short
One thing that you never want to do is give away your work for free. You have put your heart and soul into making the product, and people are paying you for your time, creativity, and experience. Do not sell yourself short. You are worth it.
And as always, celebrate each sale.
Want to know if you are ready to turn your craft hobby into a craft business? I’ve created a free checklist of the 5 Things to Have Before Starting A Craft Business so you can turn your hobby into a craft business. I created this checklist because I often see DIY Crafter and Handmade Crafters struggling with knowing how to get started as a business. If you can relate to this, my 5 Things To Have Before Starting A Craft Business is explicitly designed to help you know exactly what it takes to start a handmade business and get to do what you love, crafting. So if you’d like to take advantage of this free download.
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