Pricing handmade items is a tricky ordeal. The advice and the formulas are varied,stretching far and wide. Passionate debates over how to price handmade items are fierce and all over the internet and craft fairs and even at art galleries. If you price too low, other crafters and artisans will despise you for lowering their market value and for being unfairly competitive. If you price too high your potential customers will scoff at you, and your items may look silly (They want HOW much for THAT?!?) Needless to say, asking for $580 for a plastic cabochon ring will probably get you laughed at, not thrown into the prestige world of high-earning customers (unless the ring is made of gold, of course.) Needless to say, it’s a challenging decision to make. One that is make exceptionally challenging by those of us whose craft takes FOREVER to complete.
I’m a beadweaver. Beading a billion tiny seed beads one teeny-tiny, itsy-bitsy bead at a time can take a long time, as other beadweavers will tell you. A simple, free-form peyote bracelet will take me about 3 to 4 hours, and one of my beadwoven headbands typically takes me about 6 to 8 hours. I buy a lot of my supplies in bulk, so that I can save on costs there and keep my overall prices down. However, if I actually followed many of the pricing formulas out there, the prices on my items would still be outrageous. Especially considering that the recommended hourly wage is $15 or higher.
Take this typical, simple formula for pricing handmade items:
[(time x $per hour) + cost of materials] x 1.5 = wholesale price
wholesale price x 2 = retail price
Okay. If I were to use this formula on one of my headbands, say, one of my simpler one that took me 6 hours to make, the formula would result as this:
[(6 x $15) + $3] x 1.5 = $139.5 (wholesale)
Retail = $279
Even if I lowered my hourly wage to $10 an hour, my retail price for this basic beaded headband would still result at $189. Better, but still outrageous. We’re talking about a headband I would typically charge $19.95 for. There is a HUGE difference between $279 and $19.95 (a whole frikin $259.05 worth of difference!) I would feel exceptionally silly if I charged that much for my items. Now please don’t think I am devaluing handmade, or that I don’t think I am a very good crafter. I have been beading since I was 5. I know I’m good at it. I’m not trying to be unfairly competitive, or devalue anyone else’s work either, I am simply trying to be reasonable. I’m sorry, but I just cannot imagine even coming close to following the price points that the above formula suggests.
In my mind, lower prices (but not too low, just REASONABLE) keep the merchandise moving off of the shelves. High prices may be great if someone actually buys something, but if they don’t then the finished pieces will just sit in my studio without a home to go to. Not a best case scenario in my book.
I think that it’s more important to calculate time into your pricing formulas if you are a made-to-order seller. Meaning, you make the items only AFTER the customer has paid. you will be needing to charge for your time so you don’t get overwhelmed and backed-up on orders. However, if you are like me and make the items beforehand, it’s important to price what the market will bear. Otherwise the items simply won’t sell. I try to keep a variety of price points in my shop and in my booth at craft fairs, ranging from $5 earrings, to ornate necklaces at $60. If I tried to charge $60 for the earrings I would look ridiculous, same with if I tried to make the necklaces $5 (browsers would be wondering, what’s wrong with it!?!)
These are just my thoughts of the subject. I knows it a touchy one with other crafters and artisans, so even if you completely disagree with me: I would love to hear your thoughts!