Pricing your product or crafts, can be one of the most difficult parts of running your own crafts business. But if you want to make money, then this must be considered.
You do not want to overcharge and have no sales, but you do not want to undercharge, as the whole idea to this venture is that you make some money!
I personally found, in my crafts business venture, that you have to find your market for your creations... This was, and still is, very important. I love to paint, so I started looking at craft shows that showcased more painters, or art galleries etc, where the value of a painting was appreciated.
I also checked online sites for arts and crafts similar to mine, to get an idea of price and if there was a market. ETSY is a good site for all things homemade, you can get a good idea of product pricing there.Credit: morguefile.com
My biggest mistake was entering a local craft show, that mostly had vendors selling 2 and 3 dollar items!.. Not that this is a bad thing, if that happens to be your market, but I was not going to get the customers at this particular show interested in a 50 dollar painting, when they came armed with 20 dollars to buy an armful of products!... so choose your market!
The best product pricing formula I have found so far is as follows:
MATERIALS + LABOR + OVERHEAD = WHOLESALE, WHOLESALE X 2 = RETAIL
- retail is what you charge for your product.
Everyone's overhead can be different. If you rent studio space, you have to take this into consideration. Plus craft show rents, insurance etc.. if you work from your kitchen, then obviously your overhead will be lower, and limited to fees, insurance etc..
You Don't Want to Price Products Too High
You can also go to arts and crafts shows, in your similar niche and see what people are listing their products for. But also watch to see if there are any sales. You can have a great product, and price it accordingly, but if no one is buying then you have to go back to the drawing board. Just take a mental note of how much selling is actually happening at these shows.
Creating Well Priced Products for Craft Shows Becomes an Art and a Skill
Creating arts and crafts to sell, is similar to finding a right niche for a website online. You need to venture into deeper waters and find niches that are not flooding the market and yet people are looking for. The right combination of product and a hungry crowd equals sales, which equals profits (assuming you have priced your product right)
Sometimes just visiting an art show or a craft show, will help to spur your imagination and to possibly come up with something a "little different" that may attract more customers.
If you have an idea, then start with some research. Online is also a great place to research crafts. You can start with EBAY. Type in your craft into the search box, and see what comes up. Are there pages and pages of your type of product? Is the market flooded or is there room for yours?. Then go to "completed sales" under advanced search and you can see if these pages of products are actually selling and for how much?
If you sell online, then this is great information, but you can also use this research to give you ideas for craft shows.
Remember, you are selling your crafts to make money. The pricing is important. If you can manage to find a different niche for your work, then you don't have much competition and can price your work to make money. If there are lots of products similar to yours out there, then you are face with too much competition, which means having to be competitive with the price.
So, next time you are at a show, mentally count how many people or craft booths are selling products like yours. If there are a lot, then you had better go home and come up with something a little different. You should take the time to brainstorm some ideas, before you dive into creating the same products over and over and trying to compete with others.
Of course everyone's idea of labor and overhead are different, but the material cost is always considered. Your labor is what you choose to pay yourself for your craft, and your overhead is the cost of running your studio, your basement, your kitchen corner, or wherever you do your creations!.. also included in overhead are any equipment you may have had to buy or rent and insurance if you need it.. remember this is a business, and you want to make some cash for your hard work!
Product Pricing is Important for Your Bottom Line
You need to see if you are making money and if not, what can you change to make it a more profitable product?
If after you work out the formula for a particular craft, and you don't think it will sell for the price you worked out, start breaking down the product, and answer some questions:
1. Can I find the supplies to make this product cheaper somewhere else?
2. If I buy the supplies in bulk, can a I get a better price?
3. Is there a way to make this quicker without sacrificing quality?
4. Can I make this a bit different, so as to be in my own "niche" and not be in competition with others.
If you can get a handle on your costs, then you don't have to raise the price of your product. If not, then you either make sure it is something in a special "niche" without competition or if you can't answer those above questions with a YES, then you need to brainstorm a new product, if you think the price will have to be too high for a sale.
If you are still not sure, you can always do a "trial run". If you normally sell at craft shows, and are planning a product for this years Christmas craft shows, why not start early and try and sell one online, with your price, and see if you get any interest? Or show it to friends and family and co-workers and ask them what they honestly think of the price versus the product. Do, a bit of research first, before you start into production.
Pricing your products is not an exact science, but you should use some sort of formula, so that you know you are making money.