Pricing for Crafters

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.