So, you have worked really hard to make an item and you are ready to put it up on Etsy. When it comes time to put a price on it you suddenly go blank! This is a common problem for many Etsy Sellers. In fact it is a problem for many crafters in general. How do you put a value on something that you made from scratch?
There are as many pricing formulas as there are breeds of dogs. Okay, I made that up, but there are a lot of different pricing formulas. I want to share my favorite and what seems to be the most accurate one. First add up all the cost of the finished product.
Material Cost + Labor + Overhead = Cost of finished product
Cost of finished product X 2 = Wholesale Price
Wholesale Price X 2 = Retail Price
Material Cost is just that, the cost of all materials.
Labor is the amount of time you spent creating the item.
Overhead is the cost percentage of rent/mortgage, electric, use of machinery, etc. that was used in the creation of the item.
Generally to figure wholesale you would double the Cost of the finished product. To figure retail you would double the Wholesale price of the item.
Now there are a lot of variables in this. I go into a lot more detail in my eBook on Pricing Hand Made Items For Etsy which is currently on sale for just $3.50. There I talk about how yo figure your material cost, labor and overhead. I also talk about how to lower your retail without sacrificing your time and energy.
I would like to hear your experiences in pricing your handmade items. Feel free to leave a comment or send me an email to MarketMyShop@gmail.com
I need to raise my prices. Sigh.
ReplyDeleteIt is funny but every time I raise my prices I get a bump in sales.
DeleteMy pricing strategy is to price as high as I can, but still have the item sell. I've been told for several years that I should be getting more than $100 for my dolls. I'm slowly inching towards that price point. Sold 2 large primitive rabbits this Spring for $95 each (to the same customer!). Have a primitive cat that sells *easily* for $75 (so she'll be going a little higher this year!). I've just been accepted to an "art fair" (not a craft fair) at a boutique shopping center in town; those stores are very expensive and I'm going to use this as a chance to try out some considerably higher prices for my items!
ReplyDeleteGood plan. The people who are going to be regular customers are the ones who understand paying for quality. You don't want customers who are going to constantly want deals.
DeleteI am glad to find your impressive way of writing the post.
ReplyDeleteNow it become easy for me to understand and implement the concept.
Thanks again and good luck!
Thanks! I try to make it so anyone can understand.
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