How do you price handmade stuff?

[mjr]

I know there are various different ways, but anyone who makes and sells crafts, how do you determine a price point?

I know that Kanalah makes and sells quilts.

I guess, in my case, it's more a matter of figuring out a rough material cost, and what I want to "make" per hour.

I was thinking of putting together a couple of really nice chessboards, and selling them, but I really can't think of a good price.

I mean, $100,000 per year is roughly $48.08 per hour (so, round up to $50).

So $25/hr is about $52K per year.

I'm not looking at this as a "full time" thing, but possibly an occasional thing.

But I don't want to "price myself out" of people buying what I'm making.

So with some stuff, I can't figure out how to factor in material costs. So if I buy a paint brush to stain wood, for instance, and I make two products, how can I calculate the cost of the brush, as a percentage, to include in the price?

Also, how much markup? Or does the hourly rate cover that?

I can see what I'm planning on making taking probably 4 to 6 hours, minimum, to make. So at $25/hour that is basically $100 to $150, not counting materials costs.

[Kogarashi]

My husband and I both sell craft items as a form of "fun budget" income. Here are some of the basics of how we figure things:

First, tally up the cost of items that get used up in the piece you're making. In my case, it'd be blank paper folding fans and watercolor paint. In my husband's case, colored glass and whatever base he's putting a mosaic on if necessary, plus hanging wires and things. Never price below this cost, or you're just losing money.

For reusable items like paint brushes, pliers, layout boards, rulers, etc., I usually figure they contribute a very small amount to the final cost. For me at least, they tend to get covered by whatever startup funds or past profit I have available, so I don't have to try to figure out what miniscule percentage will actually get used on one particular item. So for your paint brush example, if you're going to make several of these boards over a period of time, it may not be necessary to calculate the cost of the brush in completely (especially if it's not a really fancy, expensive brush).

For my time, I figure out how long it'd take me to make the item if I had no other distractions (like my kids), then figure a good wage for that and add this amount to the materials cost.

Finally, I do some market research to compare the price I came up with against similar items sold by others. I sell primarily on Etsy, so I do my research there. If my prices are too high or too low compared to other similar products, then I'll usually nudge them toward the average to stay somewhat competitive. I don't want to over-price myself for the market because then my things would pretty much never sell, but at the same time I don't want to undersell myself compared to other fan-sellers because not only would it overwhelm me with orders I'd have a hard time filling (or get me no sales because people think I'm undervaluing my goods), it would likely result in a loss of business for other fan-sellers as people refuse to pay the higher prices. So keeping a balance with similar shops is good.

[NecessaryCatharsis]

I started making flies for myself when I couldn't afford to buy them, then when other people admired them I started making them and putting them in local tackle shops. The markup on them is actually ridiculously huge, but the way I figure my minimum price is:
goal to make 250/year
tools and equipment I need to make them is $280
materials for 250 pieces is $80 + time to collect the rest of the materials and clean it (if you have to source materials don't forget to include that time to pay yourself. I mostly just grab feathers when I'm out and about so I don't)
Even though I don't need to purchase new tools every year, I still figure one year out of tools use so 360/250 is $1.44 per unit + my time to make

If you purchase (or have, but need) tools to do your work you can figure a reasonable life span for the tool, divide the price by that and then that's your overhead mark up. So if you need a compound mitre saw that could be $450/five years is $90/year on 20 pieces/year (if that's your goal) would be $4.50 for your saw markup. If you are going to go through 5 blades making 20 pieces you would add that cost in on tool use. If you are paying yourself by the hour in your pricing scheme you don't really need to add in a mark up on tools and materials.

I agree about price checking though. I sell my flies about 200% what my minimum price would be, just because that's still a little less than what large manufacturers charge. I could probably charge more just because they're 'hand made' but I'm already paying myself out about $35/hour to make them and I really don't think the work is worth the wage.

[mjr]

My project is going to require leather, leather tooling (mainly stamps), wood, and stain. And of course, brushes, glue, and those types of things.

If I ever get around to it, with all the other projects in my queue...

[April]

I was, for a while, hand making candles that looked and smelled like muffins. The supply cost was fairly cheap, but they were labor intensive. I stopped selling them, because, if we say the cost to make them was roughly 5 dollars per half dozen, the labor alone was roughly an hour and a half for each half dozen. We will guestimate that it "cost" 17 dollars to make 6 of them. Round up to 3 dollars each, I could "make" 18 dollars if I sold 6. But, despite being handmade, in a different style than many have seen before, despite the realism (I had to post a sign saying "DO NOT EAT") and despite smelling awesome, people complained they were too expensive and wanted to talk me down, therefore making it not worth the effort.

This was awhile back, and handmade has become a "thing" now, so I might be able to get away with it now, but back then, it was frustrating enough that I didn't want to do it anymore

[Kogarashi]

NecessaryCatharsis, that's a great way of breaking down the cost of tools.

[Food Lady]

My mom was a contracted seamstress. She charged for materials and then a fee per hour.

[mjr]

So a friend/co-worker of mine turns bowls at his local makerspace. He told me he's thinking of selling his bowls on Etsy or some other online site.

He showed me a few bowls that people made. Some of them are pretty nice, and the people who made them are selling them for a LOT of money. Apparently, somebody had a 5.5" diameter bowl that they were selling for $60. Another one he showed me, the seller wanted $200 for it.

So with my idea (not turning bowls) I'm getting a better idea of how much to charge...if I move forward with this.

[Dreamstalker]

I generally charge for materials like so:

Large OOAK beads--full price. Usually these are bought at small craft shops and I paid full price as well
'mass market' beads--figure cost per bead. I buy most of my beads through Fire Mountain and can sometimes get quantity discounts on top of sales.

I don't charge for findings that would be under 10 cents apiece; that's factored into my labor costs. That's based on what I feel a decent wage would be ($20/hour); per piece it's not a lot for earrings, more for bracelets and necklaces depending on how complicated I decide to make it. If I end up reworking something I only charge for the initial labor (actual creation as opposed to fiddling) as my personal 'hook' is that I rarely plan designs out, so everything is different and I may or may not be able to get a given type of bead again.

Not sure if I should offer some sort of service to fix items that break within X months--that would require photographing every single piece with more detail than the selling photos and is a level of organization I'm not sure about committing to what's basically a hobby/coffee money.

[BlaqueKatt]

there are spreadsheets out there with pre-entered formulae to determine pricing, and a good number of bloggers address it as well.

These are two of my favorites:

10 things you shouldn't say when pricing handmade goods

And this is from etsy itself

simple formula for pricing

[Food Lady]

I was, for a while, hand making candles that looked and smelled like muffins....so I might be able to get away with it now...

If you did I'd be tempted to order them, but be afraid of having them inside the house. I would know they weren't edible, but still I'd want to eat them.

[Kanalah]

I generally do (materials) + (crafting time x hourly wage).

Right now on quilts I am right about min. wage, which sounds bad. However quilting is such a time intensive thing that if I charge $25/hour a lap quilt would be $315.

I try to average my prices around what the other professional quilters in my area are charging. And there are many quilters in my area, plus so-and-so's grandma who does it for pennies.

[Mental_Mouse]

A common issue...

I've heard from a number of artists and crafters that any reasonable "hourly rate" tends to make their stuff unaffordable. This seems to be a particular problem for knitters and some painters/drawing artists.

[Kanalah]

My husband explains it this way: If you want something custom made or one of a kind, it's going to cost you. Not everyone can afford it. Either they save up or buy something cheaper.

I had one guy at the pop culture convention ask my why one of my twin size quilts was $315. I told him it was at least $100 in materials, plus 3 weeks of 8 hour days. Adding to the fact that I've won 26 ribbons in the past 7 years in statewide quilting competitions. He was impressed and left a wiser consumer. Unfortunately it's our job as crafters/makers/artists to educate the public on what things actually cost.

[MoonCat]

My husband explains it this way: If you want something custom made or one of a kind, it's going to cost you. Not everyone can afford it. Either they save up or buy something cheaper.

I had one guy at the pop culture convention ask my why one of my twin size quilts was $315. I told him it was at least $100 in materials, plus 3 weeks of 8 hour days. Adding to the fact that I've won 26 ribbons in the past 7 years in statewide quilting competitions. He was impressed and left a wiser consumer. Unfortunately it's our job as crafters/makers/artists to educate the public on what things actually cost.

That sounds like a fair price to me. I've seen the work that goes into those, and that doesn't even factor in the cost of materials.

People have gotten spoiled by big box stores that buy everything by the boatload from the cheapest factories on the planet, and priced the goods accordingly. The way I look at it is if you want quality, expect to pay for it. Especially if you want one-of-a-kind quality. It's common sense, but we all know how rare that is