Tuesday, May 24, 2011
How do you price handmade
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.