One of the biggest challenges of being an Indie Crafter is knowing what your work is worth in the larger craft market. As a good starting point for those of you who are just beginning I found this About.com article called Pricing Your Crafts Beating the Walmart Mentality. A great little read to start your craft business off on the right foot!
Why is it critical to get the pricing right? You will not earn a profit if your handcrafted product is not priced correctly. Without a solid profit margin, it will be difficult to keep your business going, and surely impossible to earn a living from it.
Many professional craftsmen base their labor expenditures on a figure of $12 to $20 per hour. Many people propose multiplying the base price by 2.5 or 3 to determine the retail price. Do you want to offer your handcrafted craft product on a wholesale basis? Then, for pricing, use this formula. 2 x Supplies = Wholesale Price
Wholesale Price x 2 Equals Retail Price (or, in other words, Supplies x 4).
But wait you are not done yet! Remember to provide your hourly pay rate – how much do you wish to be paid each hour?
Simply multiply the number of hours it took you to create the product by your hourly rate to determine how much you should charge for labor charges (on top of the supplies cost).
One last thing to calculate is your overhead costs, this is not supplies but other little things like Electricity, fuel to the market, tools you have bought to product the crafts, etc, If you don’t account for everything you will run at a loss.
Thanks for the article. Every crafter should read it. Somtimes the site is a little hard to get around, but stay with it 🙂
You’re very welcome! It is hard to navigate sometimes but has wonderful resources!
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