So you’ve decided you want to start selling your craft. Whether it’s a knit hat or upcycled jewelry, determining the price of your product can be a daunting task. In her book The Crafty Superstar Ultimate Craft Business Guide, Grace Dobush gives great advice on pricing your craft. Here are some tips from Grace:
When you’re running a creative business, even if it’s not your sole source of income, the basis of all pricing is your hourly rate. Your hard work is what creates the value in your products, so it’s super important to never discount yourself.
Thinking about how your creative business fits in your annual income, you might decide, based on your needs and your town’s cost of living, you’re cool with $15 an hour. But if you’re living in an expensive place or trying to cover all the costs an employer would usually cover (like health insurance, taxes and a retirement account), your hourly rate might be much higher. (If you offer a professional service, research the going rates of other professionals in your area. For certain types of creative businesses, flat fees for projects make more sense financially.)
When you’ve determined the hourly rate you want, that’s the basis for everything you sell. For a physical product, your price must include your cost of labor (your hourly rate times how many hours it takes), your material cost, overhead and markup.
More than likely, the price you come up with for your goods will be more than their made-in-China counterparts. And this is when you have to start having honest conversations with people about why your goods are priced like they are. Keep the conversation positive, and don’t apologize for your prices. Sometimes customers can be rude, but resist any urge you have to get hostile.
This is the time for you to highlight what makes your goods valuable and different from mass-produced versions. When they buy from you, they’re supporting a locally owned business, a small business, a real person standing in front of them. If you source your supplies locally, ethically or in an environmentally sound manner, that’s also worth mentioning.
Always remember: You are worth it!
For more tips on starting your own craft business, check out the rest of The Crafty Superstar Ultimate Craft Business Guide.