Tuesday, May 24, 2011

How do you price handmade

Everyone who sells handmade has to deal with this question- what do I charge for this? You're afraid to price too high and blow yourself out of the market but you want to at least make a little. Too often handmade sellers tend to underprice, years online and low prices everywhere have caused many sellers to underprice.

I've seen people put up formulas for pricing. The most commom I've seen is materials+time (decent hourly rate x hours) and then multiply by 2.  The multiple by two seems to stem from the idea of retail is usually twice the wholesale rate. But then comes the tricky part. What if your material is inexpensive but it takes hours to make. Do you charge for the time you put into it and even if you are now charging quadruple of what others are charging for similar items. My dilemma often becomes as I get better at a certain piece I get quicker at making it. What if it takes longer but the quality is lower?

Flip side is charging too little. I've passed on jewelry because just because the price was too low. It doesn't seem possible to actually use decent materials at that price. I really don't think I'm the only one.

I don't think there is a simple answer. Yes you want to cover your costs, please don't charge less that it costs to make it. You need to take into account into account the quality of the item beyond the actual costs. Is it clever or unique (meaning you looked online and you really don't see anything or much similar) charge more. If your product is unique and there seems to be a market, feel free to charge more. Does an hourly wage make sense? If you trying to live off what you sell but how many $70 (or $140 if you do the multiple by 2) dollar baby sweater will I you sell (using the 5 hour baby sweater going at near minimum wage of $10/hour and 20 dollars for yarn). It becomes hard to live off selling any craft that takes time.

Sorry no easy answer for this. For me often it comes down to ease of making it, demand, and comparable prices. Sometimes it works, sometimes it doesn't. Do you have a system that works for you?

So now you are pulling your hair out.


Jan E O said...

Pricing is the hardest part for me in jewelry making. My husband says I am to cheap, but sometimes I just want to get rid of it so I can make more. With the rising prices of metal, I have to take into consideration how much replacing the materials is going to cost. I used to add up materials and tack on 25% for rising prices, but with the current silver prices that wasn't enough.

I have tried numerous pricing strategies from by the hour to a flat rate per item. For instance, all bracelets are materials plus 15 dollars. I have found that if people really like it the price doesn't seem to matter . The uniqueness and quality is what they are paying for. So no great answers here, just a continuation of the conversation.

Anonymous said...

Sadly I fear I have no answers either. I tend to price based on the market/ level of skill since polymer clay really isn't expensive compared to jewelry supplies

Karin F. said...

WOW! I think this is the $1,000,000 question that everyone asks; I'm not sure there's an answer. But if someone out there actually knows I'd love to hear the answer.
hugs K

RockBug said...

This is definitely an ongoing issue for us artisans. It seems like there is always a new approach to pricing or something to learn. I wish that there was some magical answer.