Everybody wants to turn a profit when it comes to selling their crafts and to do this it is necessary to know some helpful hints or guidelines for success. First, find out what other craftspeople price their crafts at. It is always important to identify your target market and then to work to keep your costs low. Next, you must “maximize your selling price” and finally it is time to market your crafts in every way you can.
We will focus here on keeping your costs down to as minimum as possible in order to maximize the price you charge for your wares. It is also a good idea to always take note of what the experts or seasoned pros are selling their crafts for. Do not let pride get in the way. Acknowledge that those who have been in the craft business longer than you can teach you plenty. Learn from them whenever possible.
Keeping your costs low means being aware of every dollar and cent that you spend. Know what your money is being spent on by keeping exceptional financial records. Keep in mind all of the legal and tax costs, as well, including but not limited to, taxes, insurance, permits and licenses of any kind. Buying the materials to make your products on a wholesale basis is preferable as it keeps your costs down as much as possible.
In order to make the most profit for your products, you have to be aware of what the craft market will bear. You need to be reasonable but you also make to make as high a profit as you can. It is a general rule in the craft business that you “need to charge as much as you can to cover all the unknown or unanticipated costs, as well as to maximize your bottom line profit.”
Only you can decide for sure what your crafts are worth but there are certain guidelines that you can go by to help you figure it out. First, decide how much of an hourly rate you would like to make for designing the crafts. Next, take this hourly rate and multiply it by the anticipated hours it will take you on a weekly basis to make the crafts. Whatever number you come out with this equals your “weekly cost of labor. To give an example – if you desire to earn ten dollars an hour and will work 40 hours a week then that brings your weekly cost of production or labor to $400.
The next thing you have to look at is how much your materials cost to make the crafts. Consider the cost of supplies for one craft from start to finish. Then figure out how many crafts you can make in the run of a week. Always be realistic about what you can and cannot do! Then you need to multiply what it would cost to make one craft by how many you believe you could make in a week’s time. For example, if the supplies for one craft would cost one dollar each and you can realistically make 100 new crafts a week then the dollar amount would work out to be $100. Take this number and add it to what you calculated above as being your weekly production costs. Then take this figure and divide it by the quantity of crafts that can be manufactured by yourself in the period of a week. If you plan to go wholesale with your crafts then take the last number calculated and multiply it by the number two. If you do not plan to go this route then leave the number as is.
Now it is time to take the final number you ended with after all your calculations and compare it in the craft marketplace with crafts that are similar in nature to yours. If you find that your price is substantially higher than others you might want to consider lowering it by either decreasing the hourly wage you want to make for yourself, by increasing the amount of time you spend making your crafts or by finding ways to cut costs on materials. If instead your asking price is substantially less than others are selling at, you might want to consider increasing your price somewhat.