Friday, October 19, 2012

How Much Can I Charge for my Handmade Crafts?


You have worked so hard designing and creating your unique handmade crafts and then it comes time to price them and a clear thought process goes out the window. Emotions can get in the way and confuse our logical mind.  It is not always as simple as the cost of materials plus your time spent creating equals your break even price, now just add a fair percentage for profit and your done.  As Artists we put much more than our time and money into our creations.  They are each a small part of us and to some degree like children that we let out into the world.  How do I possibly put a price on that?

Well, here are a few strategies you may want to consider for how to price your handmade crafts:

1-Logical Method (boring,but safe).
Figure out the cost of materials (don't forget shipping fees if your supplies were shipped to you). plus your time spent creating (pay yourself well, you are an Artist and a gift to this world).  I recommend at least double the current minium wage.  If you are a specialist like a precious metals worker then find out the correct wage for your skill. This number is your  break even number.  Now add what you believe to be a fair profit percentage and you have your price.  Here is an example:
Supplies $8.50 + $16.00 an hour = $24.50
$24.50 break even price + 50% profit = $36.75
Price for your craft is $36.75 (for a craft that you spent 1 hour of time on).
Remember that your profit margin and hourly rate are for you to decide, the above is just an example.  Keep in mind that a company may mass produce greeting cards at a cost of .35cents and if they charge $3.50 it is a 1000% profit margin for them, yet the customer feels they are paying a fair price.


2- Intuitive method for pricing.
As an Artist I rely a lot on my intuition as I believe many of us do.  Why not use that same wonderful gift to help you in pricing?  Here is what I sometimes do:
Take some time away from your creation, just a few minutes even, have a cup of tea or do some other activity.  Return to the area where your handmade craft is, give it a quick look and say out loud "I will sell this item for...(say the first dollar value that comes to mind, do not engage your logical mind by thinking about it). This is your price.  Remeber that many people buy based on emotional reasons like beauty, inspiration and love.

3-Research method for pricing your handmade crafts.
Go to Amazon.com and search for similar items, be sure to be as specific as possible.  You want to compare items that are the best match.  Make sure you are writing down prices of new products, amazon often lists items that are used.  Go to eBay and do the same thing.  Google the type of craft you made and see what others are pricing similar ones at.  Make a list of several prices and then calculate the average and and that is your price.

4- Ask someone else what they would be willing to pay.  Try to find someone who is not too close to you.  A store owner where you frequently go is an ideal person.

5- Averages method for pricing.
Complete all 4 of the above methods, add them together and then divide that number by 4 to get your price.  For example:
1=$36.75
2=$45.00
3=$42.50
4=$47.00
Total=$171.25 divided by 4 = $42.80

Now matter how you choose to determine the price for your handmade crafts, remember that you as an artist are delivering value to this world in everything that you create.  It is the artist that helps us all to see the world in a new way.  Please take a moment and give this post a +1 on Google if you feel it deserves one.

Best Wishes,
Bette

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