Saturday, October 22, 2011

Pricing Craft Items to Sell

As part of my crafting to make money series! A big question I always get asked is how to price your items.

Okay first lets just get this out of the way. You will NEVER get paid for your TIME making crafts. Never. Period. End of story. Just get that out of your head. There is no hourly rate for crafting. You will make yourself crazy and probably not sell a lot if you are stuck in this mindset.

What you are doing is making money of the MATERIALS used to make your crafts. Now time is a consideration. Crafts that are more detailed and take longer to make do bring a higher price. But within limits. I talk to so many crafters who ask me why their product is not selling. It's usually the price. I tell them lower the price, and they throw a fit, which is usually followed by "but it took me 10 hours to make that!."

There are some exceptions but not many. If your crafts range more into "fine art" you can get more. But if your items are firmly in the craft market this is just how it goes.

You can mark your stuff too high and never sell it, or you can price it based off materials and sell your items. This is the difference between leaving a craft show with money in your pocket, or having to make up almost everything you made and leave with zero money in your pocket. Or actually a minus money in your pocket if you didn't sell enough to cover the cost of the booth.

Lets say I sell a birdhouse at a craft show or even etsy.com. First I have to know exactly what it cost me to make that birdhouse. When I was making and selling these hubby made them for me in our shop. I knew that it cost us 2.00 each in wood, glue and paint to make that birdhouse. For this example I will use one of my easier to paint birdhouses. This one was a real money maker and I will show you why.

Cost $2.00
Sell $16.00

Profit 14.00

This is a freehand painted project that I would paint 10 at a time to make it quicker. The only thing I varied was the color of the roofs. Hubby made them about 20 at a time.



Did I make money off hubby and mines time? No. But I made very good money off materials. 13 x 20 birdhouses sold = $280.00 PROFIT. As a side note we also sold them unpainted to other crafters.

The general rule of retail is to AT LEAST double your money. As you can see above I did way better than double. I made about six times on my money invested. This is the key to crafts. Not many retail stores can say they made 6 times the money. When I owned my own craft store and sold supplies etc I was lucky if I ever got double selling paint, brushes, etc.

Again anything under 20.00 sells well. Anything priced 10.00 and under (and good quality) sells fast. Anything 5.00 and under sells really fast.

Items above 25.00 sit a little longer but will sell if they are quality. I regularly sold my hand painted gourds in the 25.00-50.00 range. I could get that because they were unique and very detailed. So yes items that take longer to paint or make do command a bit more in price but not an hourly rate! Heres an example of a more detailed gourd that sold for a higher price.


So I am in no way saying sell yourself short. But you have to get rid of the hourly wage mindset.

If you would like to buy either of these craft patterns they are 8.00 each and come with color pictures, line drawing and directions. All patterns are emailed to you as soon as payment is received.

7 comments:

  1. That's a really, really good way of explaining it. My husband joked that when I was selling felt food on etsy I was clearing about 50 cents an hour, which was true, but crafting is really about the product and not the time.

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  2. Its really hard for people (especially new crafters) to comprehend that. All of us are so used to an "hourly wage" But this just wont hold true in crafts or even most free lance work. You have to outweigh the benefits such as working from home, working in your jammies etc.

    I recently did a show with a friend and repriced all of her stuff. It quickly sold. While we would all like to get top dollar you have to be realistic.

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  3. I think you are right. However it is best to look for things that you can make a good profit on like your bird houses.
    I make plate flowers in the $15 to $25 range which seem to sell well in my area (for now until everyone has them lol) i want to have a smaller less expensive flower item so I made 20 brooches that took almost an half an hour each to make due to fancy folding of the petals and $1 or so in materials. I'm going to try to sell them for $5 each. My husband wants me to do $6 and a friend said $7.50 (someone else said $3.) Some of the time (like sewing on the bar pins and folding the petals) I was also watching tv or listening to music (or fill in the blank)! If they sell well I may raise the price a dollar for the next batch which will also be better made due to more experience. If they don't sell I don't think I will reduce the price but I'll give them away or put on gifts as a decoration and try to come up with something that is a better time investment for me.
    BTW my rule of thumb for plate flowers is 3x the cost of materials plus $5. I may adjust up or down from that, but that is my starting point. i don't keep track of what every thing cost since I buy used dishes unless it was special (expensive) so I have a standard for certain things as well ("regular" embellishments $1; small plates $1, for example)
    I fully expect other local crafters to be selling plate flowers after a year of seeing mine, so I am working on a variation that I will test in my garden over the winter. I'll be able to be unique still even if there are others.
    I just realized I am also reacting to the etsy post that I found your link on,lol.
    Kathy

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  4. Kathy I think you are smart to do the 5.00. People don't think too hard about 5.00. But I agree if you start selling them 100 at a time and they fly out, you can probably raise it a dollar.

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  5. My rule of selling is a question I pose to myself. At what price am I willing to make the product? I count my time as the most valuable commodity. In my real job my hourly rate is very high (I am a graphic and web designer). If my profit is not close to what I make designing websites then there is no reason to be selling online.
    Just my 2 cents.
    Ludmilla

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  6. I agree that everyone's time is valuable. But as most of us work from home it is very different than a 9-5 job where hours are meticulously tracked. The benefit of working when you want to, not commuting everyday, etc make up for the reliability of a weekly paycheck.

    The thing about handcrafted items is generally if it is a great item you are going to do way better than doubling your money. And if you take the time to buy supplies at the best cost you can come out way ahead of what someone makes at an hourly job

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  7. I can't fully agree with this. Yes you should definitely be making mioney from your materials but you can't just say that you dont make money for your time making crafts. There are a lot of people that dont work efficiently (sounds like you do creating multiple birdhouses at once and then painting in batches) so they spend a lot more time than maybe neccessary on creating items.

    People will pay higher prices for OOAK jewelry and other craft goods.

    I recomend that you work out what your hourly rate really needs to be including all fixed overheads as there is no point running your self ragged and making no money:
    http://www.craftmakerpro.com/a-z-handmade-business-guide/key-pricing-handmade-products/

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