FIRST ORDER OF BUSINESS ~
HOW TO PRICE $ YOUR WARES
But before you address how to price your crafts, you have to be able to answer the
question, "How much is the customer willing to pay?"
Your first step in determining a pricing policy should be to do a survey of what craftwork similar to yours is selling for in each market like the one you are selling in. For example, what does jewelry like yours sell for at craft fairs? in stores? in galleries? in mail order catalogs? Once you know what prices the market will bear, look at all your expenses and see whether you can profitably produce and sell the piece. The following formula tells you how many dollars you have to get back for a given piece.
COST OF MATERIALS
(Add up all the little and large materials that go into each piece. Estimate costs for paint, fabric and other items you only use small amounts of.) +
COST OF LABOR
(Pay yourself a decent hourly wage. Example: $10 hour. Determine how much time goes into producing each piece and include the dollar value in your pricing.) +
(Overhead expenses like rent, utilities, insurance, phone, etc.. Since most of us work from home, you may have no overhead costs.) +
PROFIT (optional) (Amount you expect to earn beyond the cost of your labor.) =
(Amount you must recover from your time and expenses)