Handmade products take a lot of time and effort to produce. In order to make them worth it, you'll have to do some budgeting to decide how much you can sell them for. Consider the following steps to decide a price for your handmade products.
1. Research the demand for the product.
The price of the handmade item that you are selling is very dependent on how high the demand is for the product. Take the time to figure out the popularity of the item by visiting local retailers as well as online stores to get a sense of what is out there. Note how much these products are going for at different places to give yourself a starting point.
2. Keep track of your man hours.
Handmade products can generally be sold for more than commercially made items due to the amount of man hours that are put into each item. Identify how long it takes you, on average, to make each item and adjust the price accordingly.
3. Consider material costs.
There are some items you buy once and can use for many homemade products. There are others, though, that you will buy to be used once for each item you make that should be incorporated into the final price of the item. The materials you use over and over will be absorbed into the overall costs of your handmade product business.
4. Remember to allow for a profit.
Yes, account for the time you put into the product and the material costs, but don't forget to make some money. Although it should be within reason, the idea is that you will profit from each item sold rather than just breaking even. In the beginning, you may just break even, but that's because you had to invest a lot of money to get your sales off of the ground. Once you break even, though, you should make something on top of the given costs of each item.
5. Factor in shipping, transportation and other overhead costs.
If you have a storefront, don't forget to budget in your monthly rent. Online sellers will have to factor in shipping and web site maintenance costs. And, if you are going to do in-home parties to sell your homemade products, remember to take into account your transportation costs.
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