“Price is what you pay. Value is what you get. – Warren Buffet”
Handmade with love. Can that be valued with money?
It is priceless.
In this article, we will discuss aspects and a number of pricing strategies that may help you determine how much to sell your handicrafts for.
How to determine how much is appropriate to Charge?
A certain amount of research and survey is advisable to find out the market price of similar products being made. Online stores are also an important competition for handicraft business. Sites like eBay and Etsy are selling a wide variety of handicraft items on a discounted price, which is a threat to the retail market. You can always change or adjust your prices according to the times, but try to set a price and stick to it for several months at a time. You can always lower your prices and offer sales as an added incentive for potential clients to buy your product, or you may even decide to offer special deals for credit card purchases, bulk orders, or as a promotion.
To begin with, it is essential to determine what expenses your prices should cover. These include the cost you pay for materials and supplies, your time, and the amount of money you must necessarily spend on marketing or advertising. The most important of these is overhead costs.
Your prices should be able to cover the costs of, at the minimum, the amount of money you have put in your business; your telephone bills, a portion of the rent for your home or garage, insurance, supplies, and other expenses need to be considered when determining a price for your crafts.
Your pricing should also take into consideration the direct costs of operating your business. For example, the price you have to pay for fabric for your quilts, or wood for birdhouses or cabinets, are considered direct costs.
Lastly and most importantly determining the profit margin is very crucial, as without a profit no business is a success.
Determining your final prices may be a trial and error endeavour. It takes careful consideration to determine the cost of your crafts. Your pricing will not only determine how much profit you can make but may also be used as a barometer or guideline to the future success of your business.
The best way to determine potential prices for your crafts is to compare what others are charging for similar crafts. You can do this by visiting physically, as well as online stores. Take the time to understand your competition, what they are selling, and how well they are doing. Find home-based craft business forum boards, or discussion groups on the Internet, and find out what others are charging for their crafts and how successful they are with those prices.
It goes without saying that in order to generate sales, you will need to price your crafts a little under what your competition is charging for some items; and if you are striving to create a brand name or premium craft, you will need to charge a little more than your competitors, but be prepared to explain why. The best part of creating art is being unique. If you can create something unique you can easily charge double your cost without being questioned.
A variety of online stores that sell a wide variety of crafts may be found at:
eBay, Etsy, Amazon, Google and Craigslist
Spend a day, or a week, browsing online stores, and try to find items that incorporate at least the number of materials and time spent that your craft does. Look to see how detailed other competitors’ crafts or products are, and what customers are willing to pay for such crafts. Find a middle ground. Ask yourself whether or not you would pay that much for your craft. If you would not, it is doubtful that your customers will, either.
