Pricing Your Handmade Items to Sell

Pricing is definitely one of the trickiest and one of the most important decisions you will have to make when you start selling your handmade items. Take it from me it’s something I struggle with and agonize over often! 

Pricing your items to just cover your costs or slightly higher will seem great when you’re selling a ton of things and thinking that means you’re wonderfully successful. Sounds like a fine idea if your only goal is to cover the costs of supplies for your hobby, so what’s the harm? By doing this you’re hurting not only yourself but also everyone in the handmade selling community.

Take into consideration that even if this isn’t your full time job you still deserve to be paid a fair hourly wage. What is your time worth? There is so much emphasis recently on buying imported “Fair Trade” items to make sure workers in third world countries are being paid a fair wage, so I don’t understand why so many skilled local artisans think it’s okay to pay themselves only pennies an hour. On the other end of the scale don’t pick a random dream salary. Base your hourly wage on your experience, quality of work and training you have. As you progress and become more skilled you can always give yourself a raise.

The cost of supplies is an obvious expense but you also need to think about the cost of marketing, packaging, tools, the cost to enter shows, your camera to take the beautiful photos, transportation to buy supplies or attend shows, the time you spend promoting online and selling at shows, classes you take to improve your skills…all of these things cost money and if you’re not charging enough to cover this overhead and still make a profit then you’re not charging enough. As a business these are all expenses that need to be considered and accounted for. Any successful business needs to earn a profit to be able to reinvest in itself and grow with new products and ideas.

Another concern of pricing your items too low is that it may give some customers the impression that it’s acceptable to expect to pay next to nothing for a beautiful handmade item. It lowers the value of everyone else around you who is trying to charge fair market prices and chances are you may alienate other sellers who could be wonderful contacts. I once read somewhere that it’s easy to pick out the amateurs at a show because they will be the one with the rock bottom prices. Nobody wants to be known as the amateur! I can almost guarantee that all sellers will get mixed opinions about their prices from time to time but if everyone you meet cries out “your prices are so low” then chances it’s time to rethink them.

If you search online you will find dozens of variations of the formula all claiming to be the best one. I will share with you the one that I seem to hear most commonly from other vendors and the one I see come up online most often. Keep in mind that many sellers don’t like to share these “secrets” so don’t be offended if you ask and they don’t want to tell you!

 (Total Material Cost + Total Labour Cost) x 1.5 x 2 = Retail Price

 Total Material Cost (don’t forget to include packaging costs in this number)

Total Labour Cost (include costs for photographing packaging and marketing the item)

1.5 (should cover your overhead expenses)

2 (is your profit margin)

The key using a formula is to find one you are comfortable with and be sure that you are accounting for all your labour, overhead and profit. Keep in mind with any formula you still need to use common sense and have an idea of what price you can reasonably charge to fit within the market you will be selling in.

You may find that some items just aren’t profitable enough to sell. And that’s okay, you can reserve those products to make as special gifts or offer them as part of your signature or limited edition collections just to showcase that exceptional talent!

Please don’t take anything I’ve said as an invitation or suggestion to gouge your customers, but if they are truly fans and appreciate what you make then they will have no problem paying a fair price for your work. And I do repeat fair…for both you and them!

Creativity should be encouraged and as a community we need to work together to make sure buyers understand the effort that goes into making something so unique. Make sure to offer information so your customer understands the quality materials and hard work that goes into each item. Reward their loyalty by giving them a wonderful personal shopping experience and an exquisite handmade item they can be excited and proud to own. ♥

23 Responses to “Pricing Your Handmade Items to Sell”

  1. This is very informative, pricing handmade is a challenge! Thanks for the insights!

  2. excellent advice, very informative post!

  3. Hmmm, if only that forumla was so easy for photographers!

  4. Great psot, I have readed some things about it, but maybe I´m in trouble with this, because always there are cheaper items to bit me, and it´s difficult to keep the prices to get enough profit.

  5. I totally agree with you!

    Pricing is very difficult, and when customers tell me how ‘reasonably’ I price my items, I probably haven’t charged enough …

  6. That was a fantastic post! I’ve listed “understand a proper pricing scale and supply costs” as in my top two New Year’s resolutions. (The other is to finally get healthy and get over this nagging head cold!)

  7. Thanks for all of the great tips!

  8. Pricing is such a difficult thing to do sometimes, this is helpful.

  9. Pricing is a challenge :) Your new layout is very interesting! It’s like reading a newspaper!

  10. Sound and clear analysis…

    I always wonder how come that so many people price their items so low as to not even be able to cover the expenses…

    And yes, they’re affecting all the market, in a really bad way.

    Just to give you an example: photography. Let’s price a 12×18″ photographic print: let’s say you’re printing in a lab, that’s about $10-$15, plus, you have the packaging, let’s say another $3 for a good cardboard tube. So it’s already $18 just of materials, then you have to consider the gas you used to reach the photograph spot (ok, you could have taken the photograph in your studio, but still), the price of the camera, lenses, memory cards, software (unless your pirating it, but I wouldn’t consider it), and so on… Now, you can find 12×18″ prints for less than $30… That’s insane, completely insane.

    Ok, sorry for the rant ;)

    Have a great 2011!

  11. thank you for the information and the council on my time having value. I appreciate the help.

  12. Good post, It is a really hard thing to decide how to pitch prices. i don’t know if I’ve got it right, i certainly don’t pay myself a decent hourly rate but I don’t want to be left with a mountain of stuff my Husband would go barmy! lol.

  13. I find keeping track or determining what my supplies cost for each item difficult. I mean — it’s a little of this and a little of that. It’s certainly not cut and dry. I usually estimate costs, somehow decide what I’d like to make and then I compare to what others are selling. Then I either adjust up or down. When I first started I tried to price my items to be lower than most, then I said “Why not be on the high end”. Our most expensive cost is our time and it’s what we take for granted most.

  14. Your blog is very nice. Great articles and a fabulous layout. It looks professional but fun, too.

  15. Excellent articles! Totally agree with you about not pricing your work too low. Seller/s should consider paying themselve for what they do if they want to stay in business. Buyers would appreciate the time and afford that the artist/makers have put into making their beautiful product if they’re the true lover for handmade goods.

  16. This is a good basic formula, but don’t forget to account for the cost of taxes at the end of the year!

    Happy 4th of July!

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