Craft pricing properly done maximizes your income without drivingaway potential customers. This and cost controls are the keys tothe profitability of your craft business.Setting, let alone, maximizing...
Craft pricing properly done maximizes your income without driving away potential customers. This and cost controls are the keys to the profitability of your craft business.
Setting, let alone, maximizing, your craft’s price is a little more complicated than it first seems. The obvious price is as much as a willing buyer is ready to pay. But how do you arrive at that figure? Craft pricing has often been left more to gut feeling than to rigorous analysis.
Knowing your easily-quantifiable costs, for example raw materials, tools, packaging etc, on the one end, you need to consider, on the other end, what the market will bear. You need to charge as much as you can to cover all the unknown or unanticipated costs, as well as to maximize your bottom line profit. This is the essence of proper craft pricing.
When trying to set prices, most crafters forget to include the most important expense of all - the cost of YOU. You are talented and skilled, otherwise there would be no market for your craft.
Most crafters get into their crafts out of love for what they're doing and are just looking to cover expenses. But your time, skill and effort are valuable. Take them into account when you set your price.
In order to sell your goods at a reasonable profit, you need to determine the maximal price. “Maximal” is defined as “the greatest or highest possible”.
I got comfortable charging the most that I could for my crafts when painful experience showed me there would be costs I hadn’t anticipated – the very expensive ink that sprayed all over the room (and me!) when I was trying to refill a cartridge – the products I had to recall and replace when I determined the chemical used to fix the ink to the fabric had gone bad.
The space between your costs and your price is not only your profit; it is also your wiggle room for when things go wrong, as they certainly will from time to time.
The Golden Rule of craft pricing is: Charge the most the market will bear and you will still make less than you anticipated. Set your expectations – and prices – accordingly.
Ask yourself, “What is the market willing to pay for my unique crafts?”
Show your craft to friends and retailers and ask them how much they would expect to pay for it. Then you want to expand on that basic data. Go window shopping wherever you think your type of product could possibly be sold: local retail shops, catalogues and/or the Internet.
Be sure to consider the relative raw materials employed. If you see a beaded bracelet similar to one of yours, but using semi-precious stones, where yours is made with glass beads, adjust your craft's price down. Or vice versa.
If Wal-Mart sells a mass produced version of your craft, made in China, don’t be discouraged. Know you have a competitor. Make your product obviously better, but keep the competition in mind when you set your price.
One more thought on pricing: if your initial price turns out to be too high (i.e., more than the market will bear), you can easily lower it. However, the reverse is much harder to do.
This is a complex subject. You want to maximize your profits, but you don’t want to drive your customers away.
Fortunately, there are resources that can help you determine the proper price. Please visit http://www.theartfulcrafter.com/ craft-pricing.html for information about a great program you can use. There is also a wealth of information on my website that any crafter and, for that matter, any small business owner can use to get their enterprise up and running whether it be online or off.
Ms Bergen has had a varied career, first as a special education teacher and then, after obtaining an MBA degree, as a vice president at a major insurance company. For the last eight years, she has been making and selling crafts.