Pricing Your Crafts for Maximum Profit

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 reasearch 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:

• Priced high enough to cover all of your production and material costs. This is contiengent on extimated costs of raw materials, marketing expenses, and fixed costs such as warehouse rent.
• Priced high enough to make a profit.Do not be scared to price your items high. Often, crafters don't take into account income flow or unforseen expenses while pricing craft. Examples of these hidden costs may be credit card surcharges, gas, or business license fees and taxes.
• Create volume in sales. Selling in bulk may often catapult an amatue crafter to a professional. Be careful not to reduce your prices too much (more on this later).

Simple Formula for Pricing Your Craft:

Take the following factors (EXAMPLE – enter your own data for the dollar amounts, time and cost):

• Production Time: 2 hours at $20 an hour equals $40.
• Cost of Materials: $10 for all items to create your finished piece.
• Fixed Costs: production time + production costs: $50
• Ideal final price: Multiply fixed costs ($50) by factor of 1.5 to get your final pricing = $75.

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 precies 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 FFnet. "Why is your craft all of a sudeden not worth its orginal price? If people like what you're selling, they're going to purcahse it,l regardless of the price. You shhouldn'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!