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The question I get asked most often is “how much would you pay for…” or “how much should I charge for…”. Price your stuff too high and no one will buy, too low and you’re losing money.
So what is the perfect price?
Price Your Crafts to Drive Sales
First, let’s look at who you are selling to. Here’s a hint, it’s probably not me, or any or any of your other crafty friends. We go to craft shows to get ideas.
And if you ask us how much we would pay….. well we can quickly guestimate your cost, or rather our cost to make it ourselves. And we wouldn’t pay. It’s not that we don’t recognize your talents, we are just DIY’ers and there’s a good chance we can do it ourselves.
But there is a whole big world of non-crafty people out there. They are your customers. They don’t own a miter saw and they wouldn’t have the first clue what to do with a crochet hook.
But they like pretty things. They like your pretty things. And they are probably willing to pay more for them than you think.
Case in point. I don’t know how to engrave wood. But I wanted an engraved sign for my dad’s cabin he is building and I paid $65 to get one. The piece of wood it was engraved on probably cost the guy $2.00
Don’t get me wrong. I know he had to buy expensive tools probably lots of hours of practice and training. He deserves the profit he made. It was because I didn’t know, nor was I willing to learn how to engrave wood that I was willing to pay so much.
Don’t sell yourself short
That is what I see the most from crafters. They price too low.
Pricing too low could actually be hurting your sales. Customers will perceive your items as cheap and poorly made if they carry too low of a price tag.
You have a talent that your buyers don’t have. You bought the equipment. You went through the hours of learning and practice to make your crafts. You created a masterpiece. You deserve to make some money from it.
Pay yourself first. Decide right now how much you are going to pay yourself an hour. This hourly wage is going to depend some on your skill. Have you been doing this for years and you’re the best at your game? Or are you just starting out, or maybe crafting mostly for a hobby versus starting a business?
I would say at the very least, just starting out, hobby crafter you should pay yourself $10-$15 an hour. And that’s the minimum you should go. Minimum.
As you gain experience and knowledge you will get better and you will get faster. Don’t forget to give yourself a raise for all that hard work you’ve put in learning your craft.
One of my favorite places to get more crafting experience and training is Creative Live. I’ve been taking classes for hand and brush lettering. My goal is to be able to make signs without stencils, which will save money in the long run on supplies. The best part is their live classes are free. You can sign up and get notified when the class you want will be aired live. Or you can buy the class and view it anytime. They offer great sales too!
Bottom line, have confidence in your work. You are a talented crafter, people will pay for it.
Don’t overcharge either
Yea, we would all like to be making $100 an hour selling our knitted booties and painted signs. But I don’t think we would have many buyers lol.
Just because we have a talent that our buyers don’t have doesn’t mean we should price gouge them either. They want a fair price as much as we want a fair wage. You might have to do some price comparisons to see where your stuff lines up with others.
If you are selling your hand painted signs for a hundred bucks a pop and everyone else’s are selling like hotcakes at $60, you are probably overcharging. Take a look around and see what others are doing.
And that means other crafters, not Walmart. People are will to pay more for handmade things.
The Formula I Use
Start with the cost of your supplies. I am going to use these wood Christmas boxes I made as an example.
I used 2 feet of wood to make them. It costs $5.14 for a 6 foot piece of wood at Lowes. Five fourteen divided by 6 is $0.86 per foot. So two feet equals $1.72.
The rest gets a little bit tricky. I used my miter saw, sandpaper, paint, ribbon, hot glue, and some embellishments. The pine and berries I cut off a 6 foot piece of garland. Who has time to figure the cost of all that out?
I don’t get all that technical on the extras.
If I use a whole spool of ribbon (or even half) I’ll add that price in, but I don’t calculate small pieces. So for the “extras” I add another $1-$2, depending on how many extras there are. For this one, I did $1.00. That brings the cost of supplies to $2.72.
For basic woodworking projects, I charge $20 an hour, and this took me roughly 1/2 hour to make. So my total cost is $12.72. Now take that number and double it. $12.72 x 2 = $25.44. And I round down to $25.00.
This is your wholesale price. And if you are a hobby/side hustling crafter, you want to use this formula to price your crafts.
So we have the cost of supplies + hourly wage = your cost x 2 = your selling price.
This formula has served me very well. Yea, I may charge slightly higher prices for high in-demand products. And some stuff I may have to knock down the price a bit, especially if the competition is way lower. But over all, this is how I price my stuff.
Breaking it Down
Every set of these Christmas boxes I sell I pay myself my $10.00 wage for making them. But why did we double it? What’s the extra $12.72 for?
That is your profit margin. The pool of money your profit margin brings in is to buy more supplies, upgrade your tools, pay for more training. You may have booth costs at craft fairs, gas to drive there, taxes to pay etc. All of those extra expenses on top of the expenses you had to create your item. You have to account for those. And if you’re not, you’re losing money.
After all the extra expenses are taken out, what’s left is your profit or the money your business makes.
Hopefully this helps you better price your creations and will ultimately lead to better sales. For more tips of the trade be sure to sign up for my weekly newsletter. I hate spam too, your email will be safe.