Pricing Handmade

stock-footage-woman-crochet-knittingPricing handmade items is hard. On the one hand, you spend a lot of time creating something and want to be fairly compensated for that time, but on the other hand, when it comes to time-consuming projects, if you charged enough to earn a fair wage for your hours of work, you’d be charging far more than most customers would be willing to pay. It’s a fine line, and it’s something I’m still struggling with as a shop owner.

There are lots of formulas out there to come up with a fair price for handmade goods that take into consideration the cost of materials and time spent working, like this one:

(Hourly wage x # of hours worked) + Cost of materials= wholesale price. Wholesale price x 2 is your retail price that you should be charging your customers.

So for example, if I spend 6 hours working on a crocheted toy (that’s about my average for the medium size toys I sell) and I want to earn $9 an hour (our minimum wage here in CA), that’s $54 plus material costs, which are luckily usually pretty low, around $3-4. So I’m looking at a total WHOLESALE cost of $58. Multiply that by 2 and your looking at a retail price of $116 for a 9 inch stuffed toy. Hmmm. Maybe there’s people out there that would have no problem paying that amount for a high quality handmade toy, but I know it would put my items out of reach for the vast majority of shoppers, which is not something I want.

On the other hand, if I price something too low, I’m not only essentially giving away my time, but I’m also hurting other handmade artists by undercutting their prices, which drives down prices across the board and negatively impacts the handmade marketplace as a whole. So it’s a balancing act, and I try very hard to look at it from both sides.

For me, I rarely have very much money in our budget to spend on gifts or something for myself, so when I plan to buy something I am very careful and weigh all of my options. I read product reviews, I compare prices, and I consider what makes one product superior to another. And for that reason, whenever I have the chance I buy handmade. Part of the reason is that I think it’s really important to support my fellow crafters because I know just how hard running a creative business can be. But mostly it’s because handmade items really are special, and for the most part are built to last. Knowing that something was made by someone’s hand especially for me makes me feel connected to that person and their products, even if I don’t know them and will never meet them personally. It gives things more meaning, and I find that I value those handmade items more. But then there are times when my budget forces me to the usual big box stores and their consumer-friendly prices, and that’s okay too. What’s frustrating is when people want the handmade quality at the big box price.

When you sell handmade items, it can be discouraging when people compare the price of your item to the price of something similar they can find at a large retailer. While I think most people do understand and value the time, effort and skill that goes into making something by hand, there will always be those who would rather pay a lower price for something mass produced by machines if it serves the same function. In the end though, while you may not be able to realistically charge what the formulas say you should and still get sales, it’s important to find a balance and not accept less than what you feel is a fair price for the work involved in creating your product. That number will be different for everyone, and it’s up to each person to find their own system that they’re comfortable with. The important thing is to give people the best possible product, hopefully at a price you can both live with.

And if you’re a handmade shopper, please keep in mind that you’re not just purchasing a product–you’re buying the time, effort and love that the artist put into creating something unique and special just for you! That’s not something you’ll find at Walmart.

Advertisements

About Ashley

I'm a handmade shop owner specializing in crochet toys (amigurumi), accessories and patterns. I'm also a stay-at-home mom to my daughter and 2 sons and the lucky wife of a wonderful man who tolerates my yarn addiction and encourages me to keep crafting, even if the dishes don't get done ^_^
This entry was posted in What's New. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s