Do you struggle with how to price your handmade craft?
This is probably the number two question I am asked by artists and crafts people: “how do I know how much to charge for my handmade items?” My answer: There is no one single formula. How you price your creative work depends on many factors. The most important thing is that you are making a profit and your market will bear the price.
If you’re crafting as a hobby, you may be just covering materials but if you intend to create a business, you need to consider the cost of your own labor, expenses and markup as well.
Depending on what medium you work in, your expenses can be minimal or exorbitant. For example, if you make lamp work beads, blown glass or pottery, your expenses will include the cost of your gas and electric. If you rent a studio, all of your physical costs must be included as should your credit card processing fees, website and online costs and commissions.
When you estimate labor, figure out how much time you spend per piece and how you want to pay yourself for that time.
Pricing isn’t just about following a formula, though. It’s very much based on perceived value. People often have a preconceived idea of what an item should cost so you have to find a balance between what you think your item is worth and what buyers are willing to pay. Artists new to selling their work may feel they have to explain or apologize for the price, or worse yet, lower the price just to get people to buy. Don’t do that. Please. Ever. Your time and creativity are not up for haggle. If you find that potential buyers are resisting your price, think about what you can do to make your work stand out from mass produced work.
The price your work commands will also depend on where you are showing it so unless you have some very inexpensive pieces in your line, for example printed cards or items you can crank out quickly or cast and not made of precious metal, stay away from shows where the other exhibitors are low-balling their work.
One area that a lot of artist have difficulty with is pricing their work when they wholesale to galleries and also sell retail themselves online or at craft shows. There is an absolute rule about this. Always, always charge at least as much as your wholesale accounts will price your work. Your galleries will need to at least keystone (double) your wholesale price, so if you can’t afford to sell it to them for half of what you sell for at retail and still make a profit, either develop a completely separate line for retail or rethink your markup. Just be sure never to undersell your wholesale customers.
What questions do you have about pricing your work? Do you work on a specific formula? Do please share in the comments below and check out Craft Biz Blog for more on this topic.
Posted in Selling Tips
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