How To Price Your Crafts....

**dolphin** · 09-25-2002, 06:28 PM

Found this on a search today. Hope it helps. How to Price your Crafts

Deciding how much to charge for your crafts is an important decision. While ultimately you must decide what your products are worth, there are a few steps to follow that can help.

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Here's How:
Decide how much you (or your employee) will be paid per hour to produce products.
Multiply this hourly rate by the number of hours a week that will be spent producing crafts.
Write down this figure, this is your weekly cost of labor. (If you need to make $10 per hour, working 40 hours per week the weekly cost of labor would be $400.)
Calculate the total cost-of-supplies needed to make one finished product.
Determine how many products one person can produce in a week.
Multiply the cost of supplies-per-piece by the number of products produced in a week. (If your cost of materials per piece is $1 and you can produce 100 products a week, the figure would be $100.)
Add this figure to your weekly labor costs. (In our example here that would be $400 + $100 = $500)
Divide this figure by the number of products produced in a week. (So $500 labor/materials divided by 100 finished products a week would be $5.00 per piece.)
If you will be wholesaling your products, multiply this number by two. (Which would give you a retail price of $10 per product.)
Compare this cost to similar products on the market.
If your price is more than similar products, you may need to reduce it by cutting hourly price, finding less expensive supplies or by increasing your production time.
If your price is significantly less than similar products, you may want to consider raising your price.

Tips:
Usually one piece will not use an entire supply unit. For instance an 8-ounce bottle of glue may make a hundred pieces. In this case, calculate how many pieces can be produced from a supply and divide by the cost of the supply.

This equation does not take into account any expenses other than labor and materials. You can figure in weekly costs of any other business expenses that you may have and add it to the weekly labor and material cost.

**heaven** · 09-25-2002, 06:30 PM

that does help thanks. i always wonder how much is this really worth then i think how much would i pay but i am cheap too.

**homesteadmamma** · 09-25-2002, 06:41 PM

There are a couple of things though that we've found in pricing craft items.

- we visit craft sales and check the price of others doing the same or similar craft items.

- we found you never get the time you put into doing crafts. You do it because you love it.

- we also found that many people attending craft sales really don't want to spend their money and often think you've priced items too high. We make a watch clock and the large one we sell for $30.00 per watch. Just getting the clock piece alone here in Canada costs us $18.95 and then there is stain, etc to put on the watch. People go past and say "I wouldn't ever pay that much for a clock" and yet we are making very little money on that particular item.

We love what we do and so our prices are kept at a minimum and we've made a good sum of money with our crafts. We also decided to keep the prices low and get repeat business and that has been a very successful way of selling for us.

**captclearance** · 09-25-2002, 06:55 PM

Thank You !!!

**dolphin** · 09-25-2002, 11:59 PM

Homestead mamma, I would be very interested in how you price things. I do think I will go to the local Havest Festival (fair) in two weeks and take a notebook with me to jot down notes.

Take for instance Captnclearance's Rag Christmas Trees. She said she doesn't know what to charge. How would you charge for these? They are so beautiful and very country so they would be at a premium for those who decorate country. She has them on the Crafts board and I think she would also appreciate your info. Her cost is very low. Something like $1.25 for material but I think she is not counting all of her supples. I was thinking that they should go for around $8.99. Do you think it should be higher or lower?

I really want to get into the craft business and I do love it but I also want to make money and I could use your expertise.

Thanking you in advance,

Dolphin

**blueknitter** · 09-26-2002, 11:04 AM

One of the formulas that women in my guild use is to multiply your cost of materials by 3 or 4 times. This would, of course, depend on the cost of your materials. For the hats that I'm selling, which will hit the store this weekend, I'm charging 6.00 each. Most of them were made out of clearance/special buy yarn. Some of them weren't, but it will even out in the end. Of this 6.00, I'll get 4.00. I know that a 33% consignment is rather high for the store owner, but she was very cooperative and supportive of my work, and I want it to be worth her time and store space.

**homesteadmamma** · 09-26-2002, 11:43 AM

Great question Dolphin.

The very first thing I did was I went to a number of craft sales and marked down prices on my hand.

I didn't want people to see me marking prices in a book (too funny). I looked at items that were close in resemblance to what we made.

Then you need to keep your prices in line with what other artists are doing that is similar to you. Pricing below will only make everything come down in price which isn't going to help you at all because it only makes you look bad.

Dh made many items and would take them to work (his previous job) and people bought them immediately at the price we had set. Its funny, but most of the items I priced were almost identical to the prices set at craft sales. Everyone says we sell our crafts too low, but we've gotten repeat business because of that. I am very careful though as to keeping the prices similar to other crafters doing similar to us. First I think its only fair and I also want our business to have a good name amongst other crafters.

When you go to craft sales, talk to other crafters. Don't be afraid to ask them how they came about charging what they did. (I didn't do this because I was just too shy. I really am!!)
Ask them what they use and why. Last year I did ask about the different brands of wood they used because I knew a couple of the crafters from doing craft sales for 2 years. Remember though there will be some who don't want to talk at all. Thats fine also. They see you as a threat to their business.

Do you have something that is different than all the rest. We make angels and there has been no one who makes them. So last year I sold over 500 of them and couldn't keep up - we ended up by having to take orders. I sell them for relatively cheap but when you sell 500 of them, it quickly adds up.

At most craft sales, customers are not prepared to pay more than $20 for any one item unless it is different from the rest and unique. Thats where you can make the money. One year, I went to 3 craft sales inbetween the ones we did. A lady had made a very simple ladder with a welcome sign on it and a bow and she sold out at every single craft sale I was at. She couldn't supply everyone who wanted one. She was selling it for $20.00 but customers were purchasing 5-6 at a time. She made huge $$$ from a very simple craft. We find the simpler, the better because you end up making more because it doesn't cost as much to make.

Also remember, what sells great one year may not sell at all the next year.

A good book to get is Crafting as a Business by Wendy Rosen. There is also another book out about pricing your crafts but I don't have it.

A side note in regards to crafts. Make crafts that are different that what they sell at dollar stores or stores such as Walmart. It makes me so angry to see these huge stores selling crafts that are similar to crafters. Soon as a crafter, you won't be able to even sell your items because customers always say "well I can get it cheaper at Walmart". My answer to that is "then go ahead".

Another tip: Don't mark down your prices - set them and leave them there.

Okay in answer to your question about the Christmas trees. First I never sell anything that ends in 79¢ or 99¢, its a pain when it comes to making change. I sell everything that ends in 5's or 00's. Her trees are beautiful and I would sell them for no less than $10.00. They are unique, I haven't seen any before. Now she may have to charge less if there are others selling the same item, kwim. It would also depend on where she lives. That plays a huge part in pricing also. In the city where we use to live, there were so many craft sales on each particular weekend, it was hard to make anything. In the country, you have one main one in any particular town at any one time.

HTH somewhat!!