Articles

May 2007 - Fairs and Festivals.Net Monthly Newsletter

March 2009

Pricing Crafts: How To Command A Fair Market Price
Author: Lindsey Ferris - Fairs and Festivals.net

One of the biggest mistakes that newcomers to that arts and crafts scene is pricing crafts for for too little money. Even if you are just doing it for a hobby and don’t need the money to live off of, you should be pricing crafts at a solid market price. This keeps the craft market alive for people who do depend on it for their income and will also help you to still be compensated fairly for your unique work. Here are some tips to help you figure out the best way for pricing crafts.

The Market

When you first start out in your unique craft niche, you should see what other people are pricing crafts at in the market you want to enter. See what pricing crafts is like for people in your geographic area as well, many times if you look online you’ll see that pricing crafts can be very different for a different part of the country. Pricing crafts according to where you live is key and if you live in a cheaper part of the country it could help you to make some online sales along the way. When pricing crafts, make sure to stay in the general range of the craft market. If your craft is a cut above the rest then feel free to try pricing crafts a little higher. You’ll see soon enough if you can command your price.

Step-By-Step Guide To Pricing Crafts

Here are some tips that can help at pricing crafts in a way that will give you a fair market price for your crafts and for your time. Follow these steps for pricing crafts the right way.

  1. Decide how much is the minimum wage you must be compensated per hour of work it takes to create your goods.
  2. Multiply this amount by the amount of hours you will spend each week making your goods.
  3. Now you can calculate your weekly labor cost by multiplying these two numbers. So if you want to make at least $10 an hour and you want to spend 20 hours a week on your craft then your weekly labor cost is $200.
  4. Figure out how much supplies cost to make one product. Keep in mind that there are some bulk items you can use over and over such as tape or glue and only include these as a fraction of the costs.
  5. If you want to work only 20 hours per week, figure out how many crafts can be made in that time period.
  6. Now that you know how many crafts you can make in a week, let’s say 20 per week, you’ll want to multiply this by the cost per product. So if you can make 20 products and each product costs $5 to make then your weekly cost of materials would be $100.
  7. You now must add the cost of materials ($100) to the cost of labor ($200) and you end up with $300.
  8. Now that you have your total costs per week you can divide this number by the amount of crafts you make each week. So $300 (total labor and material cost per week) is divided by 20 (number of crafts produced each week), which gives us $15 per item. This represents the cost it takes to make one item.
  9. Now you can multiply this number by 3, which is the standard for retail business. This means you can sell your item for a minimum of $45. This will give you a $30 profit per piece.
  10. Compare this price to other crafts on the market. You can lower it by paying yourself a lower hourly rate or finding less expensive supplies. You can also raise the price if this is on the low end compared to other vendors.

The Final Word On Pricing Crafts

Pricing crafts is one of the hardest parts of starting your own business. Don’t get discouraged if you can’t get want you want for your goods at the start. This doesn’t mean that you should be pricing crafts lower, just because you can’t get the price you want. For many people they view pricing crafts as a reflection of the quality of the good. You may actually turn off some people by lowering your price. Although it sounds strange, it is true: pricing crafts too low will drive away buyers! Just remember that people put value on an item by seeing the price tag. Use that bit of advice whenever you are pricing crafts.

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