Pricing Your handmade Items For Sale
Putting a price on something I put hours and hours of work into was very difficult for me, and I spent a lot of time thinking it over and discussing it. I talked to a lot of different people from many different backgrounds: professional artists, hobbyist, people who create just for fun, people with Etsy stores, and people who just sell at markets, as well as people who have Masters in business, and own and run multiple businesses. One of the things that often came up was the target demographic, and the idea that you will never get a price that accurately represents the time and effort for the piece you have made. I am going to talk about the way I price my pieces to sell and make a profit for myself.
Materials and costs
Obviously covering material costs is a must, but it sometimes gets to a point where this will push the product out of the regular price range for it. For example, there are some stunning examples of dyed roving (fleece) on Etsy and from indie dyers. I love working with it, spinning it, then using the wool to make something. The dyers sell it so they make a profit - which makes sense - but in order for me to profit myself off the hours of spinning and the actual construction of the item, the price would be upped to the point people would simply not pay for it. Unfortunately, with no knowledge or appreciation for the effort which goes into handmade items, and a culture of widely available, cheap and easily replaceable products, not many people want to pay so much for something at a market, even if that’s what it’s worth.
So what do I do?
You might have to be a bit more flexible. It becomes a question of the demographic expected to be looking at the pieces. While I love producing art works, I do want to be compensated accordingly for my time, and I calculate prices more precisely if it’s for an exhibition, or a high end handmade market where people come expecting that kind of price range. For markets, unfortunately, expectations need to be a bit more generous. But there are ways to offset these imbalances.
Lower the costs for materials
Rather than buying the roving I could buy dyed yarn from the dyers. They would again cost it to where they would make money, but it still saves me time and money to have it already in a form I can immediately use. It's the same with any kind of materials. You want to find it for as cheap as possible (without sacrificing the quality) so consider your options: can you find it cheaper elsewhere? Is it cheaper to get it in a different form? What about bulk buying? This can be especially useful if you find it on clearance and buy it all, or if another maker is going out of business or selling excess.
Costing the product appropriately
A lot of people think that once you work out how much the materials cost per item then you just need to pay yourself on top of that. But there are unforeseen costs that come up from time to time, or ones you may not have thought about or accounted for: do you need a permit to sell the item; the average of stall costs; are there fees if you are selling online; packaging costs; display costs; advertisement; how many items will you make before your equipment needs replacing or repair? What about a percentage for breakage?
A lot of these may seem like such a small cost, but it all adds up, and you don't want it coming out of your pocket.
How much is it worth to you?
Of course, you need to make sure it’s reasonable. For smaller things my method was ‘how many can I make in an hour’? I produce in batches, then divided my hourly rate between the average I can make. On larger pieces, or ones I really like, I make sure to cover costs and be paid for my time, but I adjust the price accordingly for the demographic. The problem is you need to be flexible on the price if you are starting out, or if items simply aren't selling. Trends come and go, maybe it's not the season for what you’re making, but it will come back around, and it will be trendy once again.
With that in mind if you want a quick sale, price it lower. Never sell something at a loss if you can avoid it, but be prepared to earn a little less if you want to sell fast. If you have the space and time to hold onto a piece, price it higher and eventually someone will come along willing to pay that price.
Try not to be sentimental
Remember if you are particularly attached to something, that might affect how you want to price it. Just because you love it, doesn’t mean someone else will be willing to pay what you believe it is worth.
A lot of artists will tell you that you’ll never get paid what the item is worth, and in a sense I can understand that. If you take into consideration your education, hundreds or thousands of hours put into perfecting a technique, translating it into a product, and practicing over and over, then no single item will ever sell for what it’s worth, as everything you make is representative of those thousands of hours and dollars of effort.
That’s not to say you can’t factor in what it’s really worth to you, but for me it’s always been a markup that I consider to be a long term investment, repaying the effort over a lifetime of sales rather than anything immediate. Sometimes you may just have to write off the time and effort spent making items as experience, and recognise you won’t be compensated for them through sales, at least.
Have realistic expectations
Subjectively, without knowing what techniques or time went into items, think about how much you’d be willing to pay for things. It is quite likely, of course, that what you are willing to pay goes up the more you consider the effort and cost that went into it. But when you are used to seeing mass produced things stacking the shelves your expectations can change, and sometimes people forget the difference between things mass produced by machines and those made by hand. Ultimately, and unfortunately, from my point of view an item is only ever worth as much as what people are willing to pay for it, so looking around at similar items and artists may be very helpful in setting your expectations.