Have a Sound Plan from the Start
Ready to sell your crafts but stuck on how to figure it out? There is an art to pricing your crafts.
Pricing your crafts begins before a craft is even made.Pricing your crafts is a business decision independent of your creative outlook and is dependent on your business plan. This includes considering your marketing expenses as well as your financial projections.
There is a fine balance between overpricing and under pricing. If you overprice your item, you won’t sell it. If you under price it, you can lose profits, or worse yet, customers will see your item as “cheap” and not think of it is a quality product. The most important part of constructing a sound business plan is research your market.
First learn what the demand is, do some market research then price your crafts. Attend craft shows to see what items similar to yours are selling for. Also, look online and see what is selling, and check out stores and boutiques in the area to see the prices.
Your goal is to charge enough to make a profit. This means pricing your crafts wisely. To do this your items need to be:
Simple Formula for Pricing Your Craft:
Take the following factors (EXAMPLE – enter your own data for the dollar amounts, time and cost):
What you will find is that often times, your product by this formula is over or under priced in comparison to your market research (attending shows, online, shops etc.) and you have to make adjustments. This may be due to a pull in demand either from a market frenzy for your craft or a increase in demand for seasonal goods. If you do have items that can sell for this price AND are within the range of your market research, you have a winner! This will be a highly profitable item for each sale.
Don’t get discouraged though if your item is significantly priced out of the market, you can make adjustments by employing strategies to increase sales volume. If it is something you enjoy making, it’s worth doing!
For example: I sell jewelry, one specific necklace costs me $5 to make and I sell them for $25 at shows, but these are my least favorite to make. The silver necklace I love to make cost about $25 per item and sells for $45. I just balance this out by making more of the $25 item and a bit less of the $45 item so I can still walk away profitable and feel like my time was worth it.
Many crafters talk about how you don’t get paid for your time. I believe if you love what you are doing, and can make a profit from your item, you are making money for your time (that could have been spent in an office).
Avoid reducing Prices
It may be quite tempting to reduce your prices either at the end of a crafts show or on seasonal items to increase your volume, but many crafters believe this is not a good practice. "Never reduce your prices!" Kerry Tellsdale of Orlando Florida writes to FFN. "Why is your craft all of a sudden not worth its original price? If people like what you're selling, they're going to purchase it,l regardless of the price. You shouldn't sell your time, or yourself short."
You can either store your off-season crafts for the next show or for another . If it becomes widely knows you regularly reduce your prices at the end of shows, most shoippers might wait until then, and your profits and volume will be greatly reduced. By reducing prices, you send a message to your customers that your products aren't worth the amount you originally priced them at. You sould be proud of the crafts you've created and not reduce the price.
Have a great event!
I have owned a small marketing business for years and have found that controlling overhead is the most important key to making sure your business can survive a rough season or economic down turn.
I have also found that one must be flexible with the jobs you accept and not narrow down your business plan eliminating possible revenue had you been more willing to diversify.
I am now partnering with a fellow crafter to start a pet treat and apparel company, selling products at fairs. We have a diverse product line and seasonal/holiday items. My concern is can a booth at a fair be too diverse and offer so many different items that it becomes difficult to maintain stock at an affordable overhead. We have bought most of our materials as over stock or we had them on hand. I know we must price our items as though the materials were at market cost but this is difficult when it seems even in our big meca of Chicago we cannot find places that sell our items let alone unique hand made products. Online prices are very high and of course we cannot compete with China and ours of course are a limited number handmade item.
Chris and Pam
By Chris Simek on January 25, 2010
Your email raises so many issues. Really good ones. 1st Though this is a Fairs and Festivals site, we are the first ones to say not all products are best sold through this venue alone. 2nd before we go any further make sure you formally copyright all of your designs. You don’t want anyone seeing your stuff and having it remade in china. As a marketing guy you’re goinig to have to do some research. I know there is demand for unique pet apparel and organic/healthy pet treats, but is there an equal demand for these itemes to be hand made? If so you need to find the shows where buyers know only handmade items (festival specificallly excludes commercially produced items) will be sold, they appreciate hand made items and are willing to pay a higher price for them. Then, find shows that target your specific demographic that meet this criteria. Check with past participants and the promoter to find out average booth gross. Assuming you’ve done your calculations regarding true costs that include paying yourself you should be able to make a guestimate regarding profitiability for the show. Unfortunately not even all this pre-work is a guantee. You want to make sure you get a good booth position, end of isle, lots of traffic…set up a captivating display and bring items in different price points. I would not bring so many items that I couldn’t track them or add to my inventory cost. Fairs could be a place to learn more about audience response to your products why they’d prefer one over the other. You can talk with them. Use the time to listen. From a profitability standpoint you want to find the most popular products that are unique to your brand that that have the highest profitability factors in 3 price points… high med and low. This gives you the best chance for success at a variety of fairs. Given your particular line, 3 additional things. you migh consider…if you do discover a great design for doggie apparrel consider licensing the design…not selling it…you sill own the copyright, but in return for compensation under specific conditions you give others the right to use some of your designs for specifc time periods and purposes… this could even go for any of your doggie treats, absolutely get online…once you start making a name for yourself you want people to be able to order from you directly…even if its just one webpage with pics of different products and a click here to send email, pet parties…you can start a following by hosting a pet parties at different individually owned pet stores, pet motels, grooming parlors, bakeries etc to introduce and sell your products, I would also wholesale to this same local proprieter audience. I would also go to some of the big wholesale shows and see what they might be interested in. Anyway, there are a lot of ways to go with this. You have a lot of research and test marketing to do to see whats going to work best.
By Susan part of the Fairs Staff on February 4, 2010
I am into mosaic crafting and have had personal friends tell me that I should sell my creations at our church functions. We have a large congregation and all of what I make pertain to one or two particular subject. However I would be agreeable to other religious themes. Two questions: one, do I need to copyright, and how do I do it. Two, pricing? Most of what I make involve a lot of tile breaking and pricing of the tile useage seems a bit overwhelming. I have other solid tiles which would not be as difficult to price. Thanks for the help.
By Rich in Elyria, OH on May 23, 2010