Wednesday, February 6, 2013

How to Price your Handcrafted Items

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The one thing I hear from a lot of people is "I am getting sales but, not making enough off the items" or the famous, "how do I know I am pricing my items at a good price?" The truth is there is no wrong way to price an item, the difference is who you are and what you feel is right for you and what you have to offer. Ask yourself this questions: "Would I pay for this item at this price?" If the answer is yes the likelihood of others paying for that item is better. Although, remember each person is not the same. 

Let's talk about some baseline ways to price your items:

1. Know what the person down the street charges for the same service. You can find this out by visiting this website link and putting in your information.

2. Keep close track of how much you are spending for each item. Example: Materials, time, etc.

$4.00 for Ball of Yarn 2 hours creating it $15 gas to and from town, etc. 

3. What do you want your profit to be? How much money do you want to make on each job? $10, $20, $30, etc. 

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Danielle from Etsy has devised a formula that many seem to like including myself, although I do use my own formula of where I feel comfortable at in charging for items and services. 

Danielle’s Formula:

Materials + Labor + Expenses+ Profit = Wholesale x2= Retail – baseline formula for pricing

Now for a little break down of this formula. What this formal asks for is the following:

1. How much were the materials?
2. How long did you work on it (your hourly wage)? 
3. Expenses, electric, cell phone, etc?
4. What is your profit?
This will equal Wholesale
Now you times wholesale by 2 and that gives you retail which is the price for a baseline product. 

Danielle has even devised a worksheet for figuring the formula. You can view and print this document here:

To learn more about Danielle’s Formula and to see what she had to say about pricing please follow this link provided here:

My Formula I devised that will work on handmade items only: 

Materials + Etsy Listing Fee+ Etsy Sale Fee+ Paypal Fee x2= Price. – baseline formula for your price. 

1. How much did you pay for the materials?
2. Etsy Listing Fee
3. Etsy Sale Fee
4. Paypal Fee
Multiply by 2 and get the Baseline price. 

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