Pricing Strategies for Craft Businesses
When you decide that it's time to market your crafts, you can't make a single sale until you set a price. If you price your crafts too high, you might lose customers. If you price them too low, you won't make a profit. There is no one-size-fits-all pricing strategy, so you must choose the method that works best for you.
Your pricing structure should take into account the costs you will incur from the time you begin to create your craft until you hand it over to your customer. If the skills, techniques, and uniqueness of your craft elevate it to the category of fine crafts or art, that lofty designation should also be considered.
Pricing Strategies for General Crafts
If you create simple folk or country crafts or use kits, DIY instructions, or craft store patterns, you probably realize that your work isn't necessarily unique. You should price these general crafts using a simple method that considers time and costs.
Pricing Formulas
Try this simple equation for pricing your general crafts:
Selling Price = Materials + Time + Selling Expenses X 2
This formula doubles the actual costs, so it includes a profit factor. If you feel you deserve more profit, use a X3 factor.
Materials - It requires a lot of record-keeping, but you should track the cost of every bead, bottle of paint, piece of fabric, slab of wood, or whatever materials you use for each craft item. If the items you create are similar and your costs essentially the same, you may choose to figure an average material cost per item and use it in your price calculations.
Time - Figure out how much time it takes to make a single item, then decide on a reasonable hourly labor rate for a crafter of your caliber. If you are a company president who sells crafts on the side, you can't expect an executive's pay for your craft time. If you are new to crafting and it takes you an extraordinary amount of time to make one item, don't include all of that learning time in your sale price.
Selling Expenses - You must package your craft items, market them, pay for a venue, and pack and ship them. If you have equipment--a dedicated computer, a printer--there's a monthly cost. Each craft item price should include a proportionate share of these expenses. Example: If you make 100 items and your monthly expenses are $400, your expense per item is $4.
Here's a pricing example using this formula:
Selling Price $34 = Materials ($3) + Time (1 hr @ 10.00) + Selling Expenses (4$) X2
Pricing Programs and Apps
If you don't like the math of pricing your crafts, there are a number of programs and apps that can do it for you. Here are two examples:
Craft Maker Pro - This company offers a "Free Craft and Jewelry Pricing Calculator" in a downloadable Excel version. You'll still have to plug in your costs, but the program will do the final calculations for you. They also offer a paid version with additional features such as "Automated Inventory."
"How to Price Your Craft For Profit" - The price of this Kindle book includes a link to a crafts pricing calculator that also operates with Excel or Google Spreadsheet.
Pricing Strategy for Fine Crafts and Art
You may have heard the expression, "the perceived value." That's a key concept when it comes to pricing fine crafts and crafts that are considered art. Like a Van Gogh, a Kandinski, or any contemporary work of art on a gallery wall, the price of a fine craft or art item can't be calculated based on material, labor and expense costs.
As artistic craft pieces are often time intensive--a single necklace could require days of effort--a formula that depends on a per-hour cost just doesn't work. Your price should reflect your material and business costs, of course; but it should also include vague factors, such as your uniqueness, skill, techniques, the fact that it's one-of-a-kind, and its desirability to art lovers.
Pricing your fine craft items requires pricing research in your area. You should stroll the aisles of a fine craft show or scan the fine crafts in an art gallery or online shop. Check out the prices other people charge for what you're selling and you'll get an idea of what you should charge for your own fine craft efforts.
Don't Get Stressed Out Over Pricing
As you become more experienced in selling your crafts, you'll develop your own pricing strategies. You'll base it on the crafts you create, the venues where you sell, and the trial and error inherent to the process. Eventually you won't need formulas or apps or books to tell you how to price your crafts, and you'll do just fine.
When you decide that it's time to market your crafts, you can't make a single sale until you set a price. If you price your crafts too high, you might lose customers. If you price them too low, you won't make a profit. There is no one-size-fits-all pricing strategy, so you must choose the method that works best for you.
Your pricing structure should take into account the costs you will incur from the time you begin to create your craft until you hand it over to your customer. If the skills, techniques, and uniqueness of your craft elevate it to the category of fine crafts or art, that lofty designation should also be considered.
Pricing Strategies for General Crafts
If you create simple folk or country crafts or use kits, DIY instructions, or craft store patterns, you probably realize that your work isn't necessarily unique. You should price these general crafts using a simple method that considers time and costs.
Pricing Formulas
Try this simple equation for pricing your general crafts:
Selling Price = Materials + Time + Selling Expenses X 2
This formula doubles the actual costs, so it includes a profit factor. If you feel you deserve more profit, use a X3 factor.
Materials - It requires a lot of record-keeping, but you should track the cost of every bead, bottle of paint, piece of fabric, slab of wood, or whatever materials you use for each craft item. If the items you create are similar and your costs essentially the same, you may choose to figure an average material cost per item and use it in your price calculations.
Time - Figure out how much time it takes to make a single item, then decide on a reasonable hourly labor rate for a crafter of your caliber. If you are a company president who sells crafts on the side, you can't expect an executive's pay for your craft time. If you are new to crafting and it takes you an extraordinary amount of time to make one item, don't include all of that learning time in your sale price.
Selling Expenses - You must package your craft items, market them, pay for a venue, and pack and ship them. If you have equipment--a dedicated computer, a printer--there's a monthly cost. Each craft item price should include a proportionate share of these expenses. Example: If you make 100 items and your monthly expenses are $400, your expense per item is $4.
Here's a pricing example using this formula:
Selling Price $34 = Materials ($3) + Time (1 hr @ 10.00) + Selling Expenses (4$) X2
Pricing Programs and Apps
If you don't like the math of pricing your crafts, there are a number of programs and apps that can do it for you. Here are two examples:
Craft Maker Pro - This company offers a "Free Craft and Jewelry Pricing Calculator" in a downloadable Excel version. You'll still have to plug in your costs, but the program will do the final calculations for you. They also offer a paid version with additional features such as "Automated Inventory."
"How to Price Your Craft For Profit" - The price of this Kindle book includes a link to a crafts pricing calculator that also operates with Excel or Google Spreadsheet.
Pricing Strategy for Fine Crafts and Art
You may have heard the expression, "the perceived value." That's a key concept when it comes to pricing fine crafts and crafts that are considered art. Like a Van Gogh, a Kandinski, or any contemporary work of art on a gallery wall, the price of a fine craft or art item can't be calculated based on material, labor and expense costs.
As artistic craft pieces are often time intensive--a single necklace could require days of effort--a formula that depends on a per-hour cost just doesn't work. Your price should reflect your material and business costs, of course; but it should also include vague factors, such as your uniqueness, skill, techniques, the fact that it's one-of-a-kind, and its desirability to art lovers.
Pricing your fine craft items requires pricing research in your area. You should stroll the aisles of a fine craft show or scan the fine crafts in an art gallery or online shop. Check out the prices other people charge for what you're selling and you'll get an idea of what you should charge for your own fine craft efforts.
Don't Get Stressed Out Over Pricing
As you become more experienced in selling your crafts, you'll develop your own pricing strategies. You'll base it on the crafts you create, the venues where you sell, and the trial and error inherent to the process. Eventually you won't need formulas or apps or books to tell you how to price your crafts, and you'll do just fine.
When you decide that it's time to market your crafts, you can't make a single sale until you set a price. If you price your crafts too high, you might lose customers. If you price them too low, you won't make a profit. There is no one-size-fits-all pricing strategy, so you must choose the method that works best for you.
Your pricing structure should take into account the costs you will incur from the time you begin to create your craft until you hand it over to your customer. If the skills, techniques, and uniqueness of your craft elevate it to the category of fine crafts or art, that lofty designation should also be considered.
Pricing Strategies for General Crafts
If you create simple folk or country crafts or use kits, DIY instructions, or craft store patterns, you probably realize that your work isn't necessarily unique. You should price these general crafts using a simple method that considers time and costs.
Pricing Formulas
Try this simple equation for pricing your general crafts:
Selling Price = Materials + Time + Selling Expenses X 2
This formula doubles the actual costs, so it includes a profit factor. If you feel you deserve more profit, use a X3 factor.
Materials - It requires a lot of record-keeping, but you should track the cost of every bead, bottle of paint, piece of fabric, slab of wood, or whatever materials you use for each craft item. If the items you create are similar and your costs essentially the same, you may choose to figure an average material cost per item and use it in your price calculations.
Time - Figure out how much time it takes to make a single item, then decide on a reasonable hourly labor rate for a crafter of your caliber. If you are a company president who sells crafts on the side, you can't expect an executive's pay for your craft time. If you are new to crafting and it takes you an extraordinary amount of time to make one item, don't include all of that learning time in your sale price.
Selling Expenses - You must package your craft items, market them, pay for a venue, and pack and ship them. If you have equipment--a dedicated computer, a printer--there's a monthly cost. Each craft item price should include a proportionate share of these expenses. Example: If you make 100 items and your monthly expenses are $400, your expense per item is $4.
Here's a pricing example using this formula:
Selling Price $34 = Materials ($3) + Time (1 hr @ 10.00) + Selling Expenses (4$) X2
Pricing Programs and Apps
If you don't like the math of pricing your crafts, there are a number of programs and apps that can do it for you. Here are two examples:
Craft Maker Pro - This company offers a "Free Craft and Jewelry Pricing Calculator" in a downloadable Excel version. You'll still have to plug in your costs, but the program will do the final calculations for you. They also offer a paid version with additional features such as "Automated Inventory."
"How to Price Your Craft For Profit" - The price of this Kindle book includes a link to a crafts pricing calculator that also operates with Excel or Google Spreadsheet.
Pricing Strategy for Fine Crafts and Art
You may have heard the expression, "the perceived value." That's a key concept when it comes to pricing fine crafts and crafts that are considered art. Like a Van Gogh, a Kandinski, or any contemporary work of art on a gallery wall, the price of a fine craft or art item can't be calculated based on material, labor and expense costs.
As artistic craft pieces are often time intensive--a single necklace could require days of effort--a formula that depends on a per-hour cost just doesn't work. Your price should reflect your material and business costs, of course; but it should also include vague factors, such as your uniqueness, skill, techniques, the fact that it's one-of-a-kind, and its desirability to art lovers.
Pricing your fine craft items requires pricing research in your area. You should stroll the aisles of a fine craft show or scan the fine crafts in an art gallery or online shop. Check out the prices other people charge for what you're selling and you'll get an idea of what you should charge for your own fine craft efforts.
Don't Get Stressed Out Over Pricing
As you become more experienced in selling your crafts, you'll develop your own pricing strategies. You'll base it on the crafts you create, the venues where you sell, and the trial and error inherent to the process. Eventually you won't need formulas or apps or books to tell you how to price your crafts, and you'll do just fine.
Troy Corbin is the CEO of Country Brook Design with a background in computer science and business administration. He's spent the last 13 years helping small businesses source and utilize quality crafting materials, and assisting them navigate the worlds of e-commerce and SEO.
When he's not working, Troy enjoys photography, PC gaming, music production, model railroads (choo choo!), and his cat Pippin...