July 22, 2010

How much...??!


In addition to selling handmade craft items through online market places like Etsy, I often, as I imagine most blogging crafters also do, get a lot of speculative email enquiries.  The difference I find with being approached in this way, is that when a potential customer is browsing through an online shop, they can already see the prices there next to the item.  But when someone makes a direct enquiry, they genuinely have very little idea how much a commissioned item is potentially going to cost, and they are, in my experience, usually a little shocked.  Even though the asking price may well not be particularly high.  Herein lies my personal pricing dilemma, one which I suspect other crafters may well recognise.

I find myself cringing, when replying back with a price.  Then I ask myself, why is it making me cringe so much?  There are no hard and fast rules when it comes to pricing craft items, and most crafters will already know this basic formula for working costings out,

materials + labour + overheads = minimum sale price

what about this next formula?

materials + labour + overheads + % profit = minimum sale price

I quite often feel like 'profit' can be a bit of a dirty word.

Looking at this another way, this time in terms of a comparison to drawing a salary.  A small softie, eg a cotton reel pincushion, lets say I charge £12 ($18.34).  It takes just less than 2 hours to make from start to finish, so divide £12 by 2, and that's £6 ($9.17) an hour.  In the UK, from October, the minimum wage will be £5.93 ($9.06) an hour.  Am I, despite being Degree educated and having 12 years worth of industry experience, really only worth 7p (11¢) more?

But can I realistically charge more than £12?  In all honesty in the current global financial climate, no I don't think I could.  The end product is after all, despite being handmade, just a pincushion.  Which leads me to ask, do I automatically devalue it myself by making it into something practical?  If the same item was marketed as an art object instead eg, vintage cotton reel soft sculpture, how much impact, if any, would this subtle re-branding have on its commercial value?

The answer lies partly in breaking down the business model behind each product any crafter makes.  Looking at the figures I've quoted above, a cotton reel pincushion would not be classed as a commercially viable product.  They take too long to make (or I probably need to speed up) when compared to the income generated.  I make them because I like to make them and they look cute.

I am certain I can't be alone in feeling like this, and hope this post will open up a bit of a discussion about pricing as I would dearly love to hear your experiences...

29 comments:

andrea creates said...

I have a hard time pricing my creations too.I too sometimes cringe(at least to myself) when telling a price. But I figure those are the people that are not our customers. Those that understand handmade- all the time and effort that goes into it etc- are willing to spend fairly on these items...Others, will just go to the local store and pick up something mass produced. Think of your creations as little pieces of art-or heirlooms~I would :)

Ellie said...

And don't forget your material costs .... even on pincushions they'll add up. But yes, I agree - I sell my little knitted animals for $22 (about £15) on Etsy - the materials probably cost about £2 - 2.50, and each animal takes about 3-4 hours. So again the maths doesn't add up. I did start off selling them at £11, and have gradually raised the price and think I've reached what the market will stand. I think the problem is that they are compared with cheaply made imported items by many people who then see them as poor value and expensive - totally overlooking the quality materials and uniqueness of each item. £3.50 per hour is rubbish pay - but (1) I can watch TV while knitting, and (2) like you with your cotton reels, I love making them. I'm diversifying into pdf patterns now, which I am hoping in time will be more financially rewarding. (Woman cannot live on chocolate alone!) Will look forward to hearing others' thoughts on this.

Sarah Coggrave said...

It's really good to see someone blogging about this! I've just started making tentative attempts to sell my work and it's really hard trying to set a price that simultaneously reflects the value of the piece, the cost to make it and the need to make at least some profit.

Sarah x

Closet Writer said...

I used to inwardly cringe when telling my customers a price (celebration cakes) and as I worked from retail premises and had staff to pay most of the 'profit was gobbled up in overheads. What I did learn over the years was the same price for the same goods can illicit very different reactions. To some a £300 price tag for a wedding cake gets a 'how much!!!!' and yet to another its 'is that all?'.
I would say however that they wouldnt be asking us to make something if they could do it themselves so the customer is not just paying for materials and time spent, they are paying for ability, skill and experience and because we can and they cant. We could sell more if we drop our prices but do we really want to be busy fools?
I learnt not to cringe...it takes a while, those who value quality handmade will pay for it...the rest? let them buy cheap imported mass produced rubbish.

The Fairy Glade said...

A very emotive subject. I would love to buy everthing handmade but simply don't have the funds to do so. It doesn't mean that I don't appreciate all the time, effort and skills involved, and would certainly pay for it if I could..except maybe £300 for a cake. That would have to be covered in gold leaf and encrusted in diamonds! Dev x

Scented Sweetpeas said...

I think the reason creators find it hard to give a price is because an item is personal to you. From past experience I find it so much easier to praise and sell other peoples items for them (e.g. a necklace I bought recently from a local artist) as I love the item but did not make it myself. If I had made it the shyness would then effect me telling someone a price through embarrassment. Maybe everyone should get their mates marketing for them :-)

Jodie said...

I think you are right, this is something that every person selling their own work must find difficult. WhenIi sold dolls with little collections of their clothes and accessories, my partner would scoff at the price and tell me I may as well be giving them away (he was right). It was another crafter that I admire who said that there was a kind of responsibility to charge prices that included labour etc as devalueing my own work could then devalue similar work of others...Does that make sense?

I make less items to sell now (patterns are easy as there is a kind of recognised industry price average) but when i do i still struggle to price them.

Swirlyarts said...

I hate, hate it when people undervalue their work as it brings down the whole handmade market. 'But it only cost me £1.50 to buy the materials so £2.00 is a good price to be selling at because look I get 50p profit' It doesn't work like that! My gift tags are fairly labour intensive but don't feel that I can realistically sell them for more than £2 for a set of 10 - people even blanch at that price! I used to sell them at £1 for a set of 10 but I doubled my price last year as I really was making nothing on them! I'm going to come back and read the other comments later :)

Gina said...

I agree it is a real problem but it is so important not to undervalue your work. I recently had an enquiry about a doll on my website and when I responded with the price I didn't even get a reply back... so rude!

Apryl said...

I try not to undervalue my crafts but I struggle so with my self esteem most days that i'm never quite sure what I'm worth let alone what my crafts are worth. I usually scan etsy as find a middle ground where i think my doll (because thats what I keep making recently) would fit in price wise, where all my materials are covered and a small bit of my time making it. I don't have any degrees in textiles nor have I worked in the industry I just like to make dolls and dream up little stories for them. I have been quite shocked and thrilled that they have been selling and perhaps I should think diffrently more postively becuse if people want them then that means I'm doing somethign good right? I think I'm waffling now.

Scrumptious Treats said...

I completely understand what you mean i'm just doing an 8inch jungle themed birthday cake at the moment which i have charged £25 for. I have made 5 animal toppers which i've been doing all week the monkey alone has taken me 3hours. I struggle so much with pricing and would love to charge more but im worried people wouldn't buy my cakes if i did.

Teresa said...

Thank you for raising this subject, I like yourself and the other crafters who have commented here, struggle with the pricing issue. I've appreciated reading the other comments, realizing that I am not alone in my thinking and gaining a new perspective in my pricing process. Thank you. I think this post will be a great help for many of us and will certainly give us something to think and talk about.

Mindy said...

I feel your pain. My dh is always trying to get me to sell what I make. I'd rather give it away than realize all of the heart, imagination, time and joy that went into creating a piece is only worth the price of minimum wage or less. At least if I choose who I give it to I know it is someone who will associate it with my feelings for them or some sentimentality.

Julia said...

Hello

Im so happy to have found your blog today, and this post is very timely as I was chatting about this very thing recently with a friend.

I feel that perhaps some customers do not fully understand what goes into a hand made item, and when they gasp at the price (or fail to reply to a quote which is generally quite modest) I instantly feel that I'm charging too much, but then when I sit and work it out, I'm getting something similar to your maths equation on your post.

It's a toughie - do we charge more for our skill, time, materials, design etc and perhaps not sell an item because it seems expensive, or undercharge and therefore devalue ourselves in the process?

I'll come back and visit again soon to see how the replies unfold :)

Sending love,
Julia x x x

x vInTaGe VioLeT x said...

i do find it very hard to work out prices for my handmade items - i check out etsy/folksy to compare the meerkat - try and work out how long it took - realise that was too long - shave some time off - get my price - cringe - put item in my shop and hope it sells! If it doesn't nearing the end of listing time i'll sometimes reduce it.
so my advice would be aim high - pay yourself properly for your time and if it doesn't sell reduce it :o)

Magdalena, The Craft Revival said...

It's so refreshing to read not only your post, but also subsequent comments on this particular topic. I'm another one who finds it quite difficult to price my items. I've actually stopped listing items through etsy and have taken up to selling items at handmade markets. In 6 months I didn't sell a single item through etsy(!!!), but I've now had 5 successful markets where my items sold with lots of accompanying praise and wholesale enquiries.

I have marginally increased prices with each market I've done to test price elasticity. What I initially thought would not sell for AU$20 has sold just as well for $40 as it did at $20!

A lot of the time it also comes down to what you;re trying to sell. In my instance, 90% of my range is textile based which requires the necessary sense of touch by a potential customer. As great as photography skills can be, a photo doesn't evoke the same emotional connection as a touch and feel of a soft toy or up-close embroidery detail of a cushion.

So my advice to others in the same position is try different avenues, research the demographic of your retail environment and experiment with pricing. Trial and error really. It's all you can do. And don't rely on just one avenue to sell your items. Try a few different ones and see what works (consignment, wholesale, online, markets, etc)

LoopyLou said...

It has been very interesting for me reading your post about pricing and all the comments.

I have been making little bits and pieces for my self and for my family for quite a few years now, and I have always had people saying to me "you should sell this, you would make loads of money", but I have always been put off selling things I make as I am too worried about the pricing side of things, I have many times sat down and thought "ok, if I was going to sell this what price would I charge" and I never seem to get anywhere with these thoughts, so nothing gets sold... Maybe one day I will be brave enough to sell items, but at this moment in time I will just enjoy making presents for family and friends... (Expensive presents mind you as I am quite a slow crafter)...

Amanda said...

It's been really interesting reading all these comments and quite often I'm told 'you should sell these'. I'm so glad that I'm not alone in feeling the awkwardness of pricing. I find it so hard and like you have often broken down the cost of making something only to find that what you actually get out of it is peanuts. I find that people fall into two camps either they really value a handcrafted item and will often give you more than you ask for or they have a want something for nothing approach and they're doing you a favour by buying something.

Depending on what I am making charging for the time it has taken to make an item can't even come into the equation. The price of some materials also makes it difficult as I think sometimes people really don't realise the cost involved.

Having said all that if someone as talented as yourself finds it difficult I don't feel so bad. I'll try to be more confident in the future and more positive in my pricing afterall if people don't want to pay what is a reasonable price I'd rather give things away as gifts to people who will appreciate them.

Handmade in Israel said...

Excellent post! I too am a cringer and feel embarassed when it comes to the business side of things. Luckily I have a husband who constantly reminds me that what I have made is unique to the buyer and that they don't have to buy if they don't want to! There are always the few who question the price, but the overall majority don't even seem to blink!

Charles said...

I too am glad i found your blog today! You have voiced what every 'crafty' person feels inside. I was asked by a friend (even worse than being asked by a stranger i think!) to make a bridesmaid dress for her. I've come to the conclusion that most people would not pay enough for handmade creations, to actually make yourself an acceptable 'profit'.

But at the end of the day, life isn't all about making money, and there are lovely people out there who will appreciate the hard work you put into handmade items! Your blog looks great and i'm about to become a follower!

Forest-Dweller said...

I appreciate you bringing this subject up. And all the comments left by you lovely artist. I love supporting people of craft by giving handmade items as gifts. Or making them myself. I think support from within is the best place to start. We each know the time, skill and love that go into our creations and enjoy them that much more for them.

Ann said...

I've been through this too, 25p an hour for labour that I used to charge was ridiculous just so that they would sell. Now I price fairly to myself because I enjoy what I make and would rather give my work away as gifts to friends and family. Anyone who does pay my prices knows how much has gone into an item and appreciates it. The ones who think my things are too expensive have never picked up a needle!

Whosies said...

price is such a hard thing! when commissioned I sometimes make 2 {though not identical} and so that helps with the cost thing. takes just a bit longer, but you get 2 finished products.
http://patchworkposse.com

The Sleepy Badger said...

This is such an interesting topic. I've started to make things to sell now after my family and friends have told me for years that I should sell them. However its been very interesting when they have asked me to make something for them and I have told them the price...suddenly they dont ask anymore or ask for 'mates rates'

Its a touch choice, do I make things just for pleasure or weed out those things that take too much time...but then am I losing the craft approach and moving towards an industrial approach.

I have to say, since pricing my items, I am now willing to pay the price for handcrafted items.

Its interesting how your perspective can change so therefore is it part of our role to educate the customer?

Louise
aka the sleepy badger

hautecute.net said...

I agree that it can be hard to price things, especially if you primarily make one of a kind items like I do. I think I need to start clocking how long it actually takes to make things!

jojoebi said...

I couldn't agree more and I think most of us are on the same page, the formula is all good and well but when you work out the selling price and then say HOW MUCH? you start to wonder if it is all worth it.
I love doing custom orders but it is so difficult to price them and when I make things for my Etsy shop, I check the marketplace to see what others are charging, it annoys me to no end when I see things obviously underpriced, especially to the point where they can't possibly be turning a profit - not so much because the artist isn't making any money but more because they are harming the rest of the market by doing so.

Jane Dominica said...

The cringe factor is always there when it comes to prices. I make hand knitted baby shoes and bootees as well as celebration and wedding cakes. When it comes to prices, I tell people what it is going to cost them - if they want to buy, they buy; if they don't, they don't. I no longer undersell myself and I get so upset when I see others doing exactly that. Hand made items take time and love and patience; if a customer wants handmade, they have to pay for it - otherwise, don't bother! Harsh but true!! And thanks for a fabulous blog - your crafts inspire me.

LifeCovers said...

Great subject and very interesting comments. I'm *toughening up*. I now ignore the raised eyebrows when I give the price of my OOAK items. I'm selling very little through Etsy but am confident that the quality of my workmanship will be recognised and I will find my niche market. I do believe that effort spent developing my own website will be eventually be far more lucrative. As for pricing, I use a formula that I used when I was in the catering industry. Take the cost of the ingredients and multiply by 3 (one for my time and one for profit). Sometimes I do a little comparing but only when my items are not selling do I then discount them.

I totally agree about folk who do not add a margin of profit to their items - it's damaging to the rest of us who NEED to make a living from our 30 year apprenticeship!

vintagerockchick said...

What a timely post, from my point of view. I posted yesterday about just such a pricing dilemma. I've decided from now on I'm just making things for me - or maybe as presents for people who I know will appreciate them. (I recently spent 8 hours making a beaded necklace for someone and I didn't even get a thank you!)