Articles
Pricing Your Crafts for Maximum Profit | March 2009 |
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:
- Priced high enough to cover all of your production and material costs. This is contingent on estimated 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 unforeseen 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 amateur 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.
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!
Comments
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.
Any suggestions?
Chris and Pam
By Chris Simek on January 25, 2010
Chris,
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
the article pricing your crafts for maximum profits is so timely for me. I have started with Etsy, not quite fully on board. I have a wreath business and I have had no business since I started. I did my homework for comparitive3 pricing, and I was in the ballpark. I was going to reduce my products, but on reading your wonderfully helpful article I will keep them as they are. I agree there is a very fine line to pricing according to what the public will pay. Thank you for the info.
By linda buwalda on July 19, 2014
I have been going to local auctions in my area (Reno, NV.) for about three months ..I have been sticking to a theme of Native American -Western items. These include paintings- Framed Art- Jewelry and I have accumulated about 32 Trail of the Paint Ponies which I love . I have put a down payment ( $30.00 ) on a 10’x5’ space. This is for a Antiques , Collectable , Art & Craft Show May of this year 2015 at Reno Event Center. This will be my first show ever. However it will take me awhile to figure out my display and they have told me I can Leave it set up from late Fri. when public will start to arrive till the end -Sun . night. I have checked online and have bought a couple painted ponies online to fulfill my theme . So my questions would be since a lot of the items I bought at auction I got really cheap at ( Estate sales ) the pricing won’t be a problem-So the Painted ponies would be valued against what someone would pay online or at another store -Which is much higher than what I paid as I have done my research .So a Painted Ponie in mint condition right in front of them -rather than having to look for one online an pay shipping an wait . I could maybe do well on this item .( I planned this would be my main item.) I know what they cost new and all the one’s I have are retired . You can’t get one unless you buy it from someone else and they are very low in the Edition size . So please don’t tell me I can’t resell them .And I could just be selling my collection-which is true.
So please don’t burst my bubble if there’s no need . However I plan to have a supply of Race Horse themed ones by Derby time .
Thank You Sincerely , Trisha
By Patricia Maus on April 2, 2015
I wrote earlier about selling my collection of Painted Ponies .
I asked don’t burst my bubble, but I’m really looking for help on displaying them . They have to be packed in tier boxes and removed each time to display , this could be very time consuming and just plain hard for me to figure out . Please Please Any input and suggestions Please . Sincerely , Trisha
I need help with this . e- mail .(JavaScript must be enabled to view this email address)
By Trisha on April 2, 2015
The question by Rich in Elyria, OH on May 23, 2010 refers. I find myself in the same situation as well. Cost of mosaic craft tiles are so expensive here in South Africa which makes a product finished in mosaic highly expensive. Thank you for your suggestions on how to price craft items. Highly appreciated. Regards.
By Decadent_DZines on October 3, 2015
I realize this is a late start but I recently went crazy with my Christmas crafting and to my surprise, was very impressed with the items I made. My problem is, I get a bit OCD and tend to spend way longe perfecting things, which throws me off on calculating my prices.
What I really would like info on is, for a first timer, some items have quite a few dollars and time into them, where would you recommend I start out at? Fairs, festival, strictly Christmas craft shows, etc? Any info would be great!
By Cindy on December 8, 2015
great information on pricing your work.
By Bonnie sunday on April 12, 2016
i disagree on advice to NOT discount item sales price. say,with half hour to closing, u are having a down show. to cover ur cost it is a good idea to cut prices as smart shoppers do come back for deals.
Consider leaving original price on most popular items but dropping price on slow moving items. have a nice size table top sign made i.e.
2-FUR-WON,or,
CLOSE OUT DISCOUNT.
It will also reduce inventory that has to be packed and lugged home.
GOOD LUCK AND HOPE TO SEE AT GULF SHORES SHOW SOON,
Rudi Schiffer
CIGAR BOX CREATIONS
step
By rudi on May 23, 2016
Is it ok to sell wholesale jewelry at a craft fair with handmade crafts
By Trina on January 6, 2017
Thank you for all the info you provide. I’m new at this so the more info you provide the better it is for me. I’m looking forward to success with your help
By CtMerchandiser17 on March 9, 2017
What about negotiation? I’ve been in B2B sales all my life - and never negotiate, and I’ve always been a top sales person in every company. I’m inclined to do the same now - it devalues my time and the article. I’d never discount at the end of a show for all the reasons you mention.
On the other hand, some people tend to expect negotiation, like at flea markets. I do a handcrafted accessory purse kind of thing. At about $20 each (some variance) some might say “Will you take $20?” If the item is $22.50. Or “Can I buy 2 for $25?”
I’ve not done a show yet. Not only is B2C selling new, but in-person, craft fair selling is.
Thank you
By judi on August 3, 2017
Aha! Had I searched before I asked, I’d have found an article on this very site that addresses my question about negotiation. No negotiation for me. Cutting the price doesn’t reduce the time it took me to make the item. I don’t need to sell it that badly and then if one person gets a deal and tells others, they all expect a deal. I’ll go with the below recommendation and my initial inclination. What it says on the tag is what it goes for. If they walk, they walk.
Thank you.
By judi on August 3, 2017
Interesting questions and answers, thank you all, if you are a first timer be sure to scope out the actual site and where your spot is, and even then you may get stuck next to a junk vendor who throws boxes of cloths on a bed sheet on the ground and sells them for five cents each. The site of some of these vendors just pushes potential customers away, be prepared to fight back with bigger signs and stuff to build a wall separating them from you. This may be an extreme example yet, its noteworthy to be prepared. I believe if your serious about being a crafted it comes with a responsibility to your neighbor at the site. I also believe sharing the information about our talents and inspiring others with these face to face encounters is the foundation of motivation and should be recognised as such. Financial profits must take a back seat. Paul Vlachos
By paul vlachos on September 5, 2017
Please help. I make denim shorts with eyelet ruffle on leg hem. Perfect for crafters to paint or applique. I made sets for years and made a great living at this. Shorts sox and t tee shirt sets. I can no longer do shows and would like to sell the shirts laced but unpainted to crafters. I don’t know how to get this information out to drafters. Maybe a website or a magazine I can advertise in. Thanks for any information u can help with.
By Arlene labounty on October 11, 2017
thanks for the info it helps a lot I make a lot of homemade jewelry
By Roberto Lindemann on October 30, 2017
I make beaded jewelry, each piece is unique and one-of-a-kind pieces. The majority of the beads I use are made from paper, approximately 15 minutes for each bead before it is ready to be put into jewelry. If I charged for my time at $20 per hour, I would price out my pieces even before I got the bead into a piece of jewelry. What I did was determine what I would buy a bead of similar look and size for and that is what I charge for each bead; different sizes of beads are then either higher or lower depending on size. I then price out the entire piece and add 25% for overhead, That is the total of all materials, and then I double that for the sale price. I do have a base price for necklaces, bracelets and earrings. If the doubled cost does not meet the base price, then I up the price to the base. I will also up the price if the design of the piece of jewelry is more detailed than just adding beads to a piece of wire. I also try to buy my materials at sales, so that also increases the profit I make and I can then work with someone on the price.
By P2B Jewelry on March 13, 2018
Getting a copyright on a design is cost prohibitive. They cost way too much….....we are talking thousands of dollars here and people will rip you off anyway. So then you are into law suites. Best to make your best run with an item and make the most you can, while you can. Unfortunately the craft industry is NOT taken seriously by either fellow vendors or buyers. And when imports hit the market in the early 90’s, the shows started going down. In the last 25 years I have not seen a come back. Pricing has become arbitrary now days and people never pay you for your time. I ask price hagglers if they would work 4 hours for their boss for free to them, to prove my point. It does usually shut them up. As far as lowering my prices at the end of the day, I don’t, no matter how bad the show is. I always have another show. And the other main problem is sales tax. They don’t want to pay it. Well if you are caught not collecting it they can take your resale license away from you so its not worth the risk. This is just my point of view and I have been in business since 1986. It has its ups and downs and when you think you’ve got the knack of it, something else comes along to surprise you.
By joy on March 20, 2018
I wanted to find out information about my self, I would love to sell t-shirts, cups, baseball caps, things of that nature, with the name specific of the particular festival. And I wanted to get some feedback. Does anyone know if this is profitable or not? depending on the festival.
By Felix Gutierrez on April 9, 2018
I sew/quilt items. Everything fits on my tables - 3(5’) tables. I feel my problem is that I offer too many products. I am talking at least 20 - 25. I feel this way because it takes me a year to replenish, especially my baby items. As well as runners, placemats hot pads, wall hangings, potato bags, bowl cozies, etc. I hired someone to sew me 100 small bowl cozies, just to keep up for this year too! I do 7 craft fairs in the months of October, November, and December. All on Saturdays. This will be my 10th year doing craft fairs. I would like to increase my sales to at least $200 each fair. This year I am trying 4 new ones I found on this website. Unfortunately, my sales are disappointing, ranging from making table to $150.😞. I spend $350 on table fees plus $175 in donations. I need to make $700, that’s my budget each year for Christmas. This is the reason I do craft fairs. I tried FB selling….. flop. Etsy costs too much and mostly is saturated with too many artisans.
Please, suggestions????
By Gay Ferland on October 13, 2018
I am just getting started in selling at Fairs and Craft Show. I sell stained glass items and am right now making Christmas items and some really nice items, I use the $$ per cut, more for difficult cuts, and am wondering if this is the best way to figure the price for Stained Glass
By MaryAnn Morris on October 21, 2019
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