How to Price Your Homemade Crafts

From- http://www.fairsandfestivals.net/index.php/pricing

Ready to sell your crafts but stuck on how to figure it out? There is an art to pricing your crafts. First learn what the demand is, do some market research then price your crafts.

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.

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.
Priced high enough to make a profit.
Create volume in sales.
The most important part is to research your market. To do this, attend craft shows, see what items similar to yours are selling for. Look online and see what is selling, and check out stores and boutiques in the area to see the prices.

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 $10 an hour equals $20.
Cost of Materials: $8 for all items to create your finished piece.
Hard Costs: for production and material costs: $28
Ideal final price: Multiply hard costs ($28) by 2 to get your final pricing = $56.

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. 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 and just take a lower profit, 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).