Probably the most common question we see in our group is, ‘What should I charge for this?’
This is a really interesting question and has so many factors to influence the answer. Here are some points to consider:
What is the cost of your materials? Ok an obvious one to consider. What is the cost of your fabric, buttons, threads, glue, hair clips, toy fill, embroidery thread and all the items that go into making up your product. What about your electricity, machine wear and tear and those type of overheads? Website costs, packaging, petrol to get to the post office. It all adds up. Have you ever sat down and really figured out the true cost of your product/s?
What is the cost of your time? I think if all home crafters factored in the true cost of their time, they wouldn’t sell a thing! I guess what I mean by this question, is don’t just cover your costs and add $1 on top. Some go by the rule of double the cost of your materials, some triple. Just make sure that what you add on top of the cost of your materials makes it worth your while.
What are the prices of comparable products? As a general rule, I don’t think you should just charge the same as everyone else does. Not everyone creates in the same way or style. You may use more expensive vintage fabrics and so need to charge a little more to make money. However, doing some research and having a look at what others are charging, might give you an idea of what range you should price your product.
What value do you place on your own work? I think we are the biggest self doubters. We don’t think our products are amazing and often wonder if others would even buy them. Having recently done my first markets, it truly is a thrill when people admire your creations and ask ‘wow, did you really make this?’ (said with a note of awe in their voice). If you price your products cheaply, how does this reflect your brand? Cheap prices to me are cheap quality products. Plus if you price your products cheaply, you simply cannot sustain this and expect to make money. Right?
What do you want to charge? If you spend hours creating a custom designed quilt then you should charge accordingly. What you charge will reflect on your brand. Don’t be afraid to charge what you want. Ok you might loose some people who want a bargain, but in the long run, you will gain customers who appreciate your work.
I hope this helps you to determine what you should be charging for your products. If anyone else has some ideas or points to consider, please comment below. We would love to hear from you!
Jane from Lil Pip
A couple of other ideas on this topic to ponder on:
ReplyDelete1. I come from a fine-art background and was taught not to set the initial price too high. Its easier to go up as you get more in demand, but you can't go backward without looking like you are desperate for a sale and undervaluing your work...
2. ...HOWEVER, this isn't fine-art, this is handcrafts and our customers have more 'average' retail expectations. So you need to keep in mind things like regular sales or reduced prices to shift slow moving stock. Its a good idea to also factor that in when setting the RRP of your goods (along with materials, time etc), because ideally you'd like to still make some profit even when the items are priced to clear.
3. Lastly - and this is the one I always get in trouble from my Sisters for - is undervaluing yourself. There's a fine line between pricing yourself out of the market and undervaluing your time and effort and the quality of your work, and its a line I find hard to walk.
Sometimes when I sit down and try to work out what I am actually "making" then I want to cry as it doesn't seem much for the love I pour into my creations and then I think why don't I go and get a "real" job instead, but then when I readjust my thinking to consider the fact I'm not paying chldcare which i would be if I had a "real" job, that I can set my own hours and work around my kids needs I do feel better. The way I look at it is if people don't want to pay what I am asking then are they really worthy of the effort and love I have put into my creation.
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