So you have decided to turn your craft hobby into a business – you have crafted for hours and you have begun to get a nice body of work together! Well Done!
Well now you need to price up your work.
Pricing your Art and Craft Work
Pricing is always a tricky area – and crafts people are often tempted to undersell their work (and themselves), but if you want to make money from your craft stop undervaluing your self now – if you price correctly you are more likely to be still running your business in 2 years time and on into the future.
Understanding the Different Terms for Pricing
Cost Price, Wholesale and Retail
These are the different terms you need to understand to sell your work.
Cost Price – The price it costs you to make your product
Wholesale – The Price you sell to shops for
Retail – The price the general public should pay for your work.
Pricing – Cost Price
First up we need to work out a cost price – the price it costs you to make your products
So you need to know your cost of materials (remember to buy wholesale).
next your hourly wage – for crafts about £25 an hour plus seems common – remember you are charging for your skill and expertise. Check your charging enough to make a living as it is unlikely you will be spending more than 50% of your time making.
and finally know your overheads – you can work this out properly (which I would recommend) by adding up your annual costs for workshop, elec, water, marketing, phone, internet, insurence, advertising etc – if you are short of time add 10 – 20%
Add them all together and you get the cost Price (What it costs you to make your item!)
Pricing – Wholesale Price
Wholesale price is the price you sell to shops.
As a guide Cost Price x 2
Pricing – Retail Price
Retail Price is the price you sell to the public.
As a guide Retail Price x 2 or 3
Another pointer for pricing is to research the market place – check you are pricing in the right area in the market place (obviously check you are still making profit!)
If your pricing is working out very much over what you can charge, look at changing different factors, can you batch produce to get costs down, are you buying materials at wholesale or trade, do you need to sell in more upmarket venues?
There is so much more to say on pricing, but that is a guide for now.