Pricing handmade items

Money-PilePricing is something always in the back of the mind of anyone trying to sell their handmade goods. It’s extremely difficult to find the perfect balance which won’t see you out of pocket, and won’t see the customers fleeing in shock. It’s the main reason I have massively slowed down my production of crochet items for my shop – they simply do not pay.  Take, for example, the baby blanket I have started making mentioned in my last post. The cost of the wool for the blanket was £42, and this wasn’t highly priced wool, this was pretty average priced wool – about £2.80 per 50g ball of DK weight. I worked out that it will take me around 45 hours to complete the blanket, and it’s not a very complicated pattern at all. If I was to request minimum wage for my hours spent on it (currently £6.19), then the cost for the labor alone would be £278.55. Add to this the cost of the wool and you’re looking at £320.55 for a baby blanket. Who would pay that? Seriously? Luckily, the blanket is for me, so no shocked customer 😀

I enjoy crocheting, so I still make some crochet items for my shop, but I decided a while ago I would only make items when I felt like it, when the mood took me, and when I properly had the time. I’m using yarns already in my stock, and when they run out, I will be seriously limiting the amount I buy in future. The items I currently sell for the most part don’t even cover the cost of the yarn, but I enjoy it, and the yarn I have already bought is better put to use than left on a shelf. If I wanted to make a living out of my handmade business, I would need to pick something more cost and time effective to make. For the moment, I no longer see it as something I may well do full time ‘one day’, like I optimistically did in the beginning.

Winter Trees at Sunset

But could this be changed? In an ideal world (for me!), consumers would recognise the time spent on such items and be willing to pay the price, but these customers are few and far between. Society has been spoiled with highstreet brands offering wooly items for pittance, and handmade isn’t appreciated as much as we makers would like. I’m not holding my breath that things will ever change to be honest. I certainly wouldn’t have the cash to spend on a £320 baby blanket when you can get a lovely knitted one for £36 in Mammas and Pappas. With a difference of £284 I doubt the fact one was handmade and one was made by machine would sway my decision much! It’s a shame, but that’s life.

Knitting

So if you’re just starting out your handmade business, and you DO want to do it in order to make a living, rather than just as a hobby, what tips can I give you? Well, I’m certainly no expert, but I’ll share what I believe is at least a good place to start:

  • Calculator-ZeroCost your materials. Work out exactly how much of something you need to make an item. If you order your supplies online, you need to be including any postage costs you have paid in there. Include ALL materials; so if you sew, include the thread (I know it’s going to be hard to work out how much thread you will need per item but do try and educated guess), if you make jewellery, include every piece, if you make plushies include all the buttons and little accessories they have.
  • Work out what you want your hourly rate to be. Do you want to be working for minimum wage or a bit more? Remember you will need to be paying tax on this rate so you won’t see all £6.19 (or whatever rate you decide on). Then, work out how long it takes you to make each of the items you make. Assign each piece a ‘labor’ cost.
  • You would think cost + labor = final cost of item. I would disagree. You will have other outgoings you will need money for. Things like sewing machine repairs and services, tools such as crochet hooks or pliers.  If you are working from home, you are going to have heating and lighting on more than you would if you were working in an office. You need to make sure a little bit is added onto each item to account for your other outgoings.
  • Now you have your final cost for each item – do you think people will pay it? Within a certain bracket it’s hard to know. For example, I would struggle to tell you whether people would pay £50 for a crochet blanket. Some people will, some won’t. Are there enough people out there who will to keep your business afloat? Only one way to find out… I would however be able to take a pretty good guess that nobody would pay £350 for a crochet blanket, and at that kind of price, I’d be thinking of ways to bring down costs.
  • So, you think your item/s are too expensive, like, waaaaay too expensive. What do you do? Well, look at ways cost can be brought down. Can you find cheaper supplies for example by buying in bulk? Can you make the item any quicker by using different equipment (for example knitting machine over hand knitting)?

If after going through this costing exercise you think your items could still be way too expensive then don’t rely on your (or my!) opinion alone. Do ask people for their honest opinion. Lots of people. Maybe even just get stuck in and try it for a bit (if you can afford to lose money). It can help to look at the prices of people selling similar things to you, afterall, they will be your competitors, but if you are going to do this then try and find the ones who are making a proper go of it – the ones who are doing this for their sole income, because it’s only those people you can compare yourself to fairly.

I don’t mean to sound all doom and gloom, I really think it can be done (I have some ideas myself but just haven’t had the ‘get up and go’ to begin them!) but for some crafts (crochet especially) it’s REALLY hard to make it work. Really hard. Pricing is just part of the battle mind, finding your target audience and engaging them is a whole different ballgame 😉

Please do share your stories of success (or failure!) in the comments section, I’d love to read them and get some more tips as to how a handmade business can become a full time job.

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3 Comments

  1. Thank you so very much for this article! We have passed through the same doubts, questions and hesitations in our work. Finally, we have reached the same conclusion as you: “only make items when we felt like it, when the mood took us, and when we properly had the time”. There is a thing in pricing: if you decide to be cheap, you will sell cheap. If you decide to be well compensated, you will find the rights customers that will appreciate. So, persistence and patience are good virtues. Taking part in workshops and meeting with prospective clients in person is another good thing to do. During these conversations one can estimate how much exactly the audience appreciates one’s art, how much exactly it is worth, what to do and what not to do, where the trends are etc. Selling cheap or under the price of materials is really not a good idea. In cases like these, we simply prefer to give away for free. If it is gonna be a deal though, it has to be worth your time, efforts, talents and material. There are people who aprreciate. Sooner or later one meets with them. One learns the basics of bargaining, the art of striking a good deal and so on. Your text is very true and very helpful too! Thanx again!

    Reply
    • Thank you for your comment! I can’t imagine many people last very long selling their goods at massively reduced costs compared to the time spent on making them and money spent on supplies, but there sure are a lot of people out there giving it a go. One only has to look through my favourite shops on Folksy, for example, to see that not many shops stand the test of time – not one of the shops I have marked as a fave on Folksy still trades. It’s really sad, because it is SO often due to either one of two things – they couldn’t keep up selling things at such a low price, or their prices were at a point where people didn’t think it worth it. But these handmade items ARE worth it. It’s such a shame that society in general no longer appreciates the handmade item and wants quantity of cheap things rather than fewer, quality items in their lives.

      Reply
      • True that, but after all. we’re artists in the first place. All that “society in general” needs to satisfy its needs are cheap goods from India and China, due to slave labor, ecology distatsers and energy inefficiency. We, as artists, we do not work for “society in general”. We work for people with taste. In our case, they have “a taste for miracles made out of paper and waste” :), as we recycle paper (mainly bulk mail and spam matereials) in order to produce the “ingredients” needed for work. What you say about shops is right, of course. We have the same observations on blogs. Pricing is definitely the hardest task in marketing handmade goods. May be there is one thing that is harder – perssistency. And the love of art, of course. But the last, they say, comes naturally. Thanx for the reply and greetings from Bulgaria! 🙂

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