One of the biggest questions that
comes up in the hand-made crafts selling business is “how do I price my
products?” I’m not an author yet, but
I’m sure that this question also comes up there. Well, there are several different methods
that you can use to answer this question.
First of all, it’s going to
depend on your purpose for selling? Are
you selling your crafts for the purpose of funding those crafts? In which case, you simply charge for materials
and shipping. If you are wanting to
actually turn a signicifcant profit, well, that takes a bit more calculation.
The easiest way to price your
products is to price similarly to similar products. This would take a bit of research (which is
probably more fun than doing math). Be
specific in your research. For example,
I make crochet newborn photo props. If I
search that, I’ll get a multitude of products ranging from $3.00 all the way up
to $50.00. However, if I search Newborn
Ladybug Crochet Photo, well, that limits my competition greatly and I can then
decide how to price my product competitively so that I can offer a good deal
but still turn a decent profit at the same time. The key here is “competitive” not
“lowest”. Some people might aim for the
lowest price and then they are not being fair to themselves and customers often
equate a low price with a cheap product.
The basic formula for pricing
(AHHH, here’s the math I was talking about) is (Cost of Goods + Labor) x
Overhead= Price. Overhead refers to the other resources that were used during
the production of your product:
Electricity, water, rent, air, etc.
Labor considers the time and energy that you put into it.
I like to use a completely
different method, we’ll call it the minimum wage (again, it uses math). Let’s say that minimum wage is $8.00, It takes me two hours to make up a single
newborn photo prop. That’s $16.00. Then, I add in the cost of materials (for the
prop that I have in mind (the newborn turtle shell cape and hat set), that’s
two skeins of yarn), which totals up to $4.66.
Roughly, it comes up to $20.00, which is what I charge for it. Makes me feel like I’m making $10.00 an hour
:-P
However you do choose to price
your products, don’t cheat yourself. You
have worked hard to make your product. I
know that you want to sell it. Selling
is exiting, and gives you motivation and energy to keep going. It’s awful tempting to price your products
lower so that you can make more sells.
DON’T! You are cheating yourself,
and you are not offering a competitive market place for other crafters. Also, as I mentioned before, cheap products
are…well…cheap. The materials are not
good quality, the work you put into it may not be the best (after all, you are
working for pennies, why put forth the effort?). It just isn’t worth it.
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