My Thoughts on Charging for Your Time

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!

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28 thoughts on “My Thoughts on Charging for Your Time

  1. FeltLikeHelping November 15, 2011 at 8:37 am Reply

    Thank you for your well thought out explanation.
    I do needle felting and I feel the same way as you regarding pricing my items. My craft is also very time intensive, so calculating a dollar amount for actual time spent on an item would lead to outrageous prices. I try to figure reasonable prices based on a respect for my work and time spent, but also considering my expectations of what a buyer would be willing to pay. I also compare prices with other needle felted items available.

    • Megan November 15, 2011 at 10:06 am Reply

      Felt, it sounds like you go beyond looking at how much time it takes for you to complete a project and try to do more market research on what your product’s expectations are. That is exactly to what I am referring to in this article!

  2. Pat White November 15, 2011 at 9:56 am Reply

    I do understand part of your thinking. I do stained glass and lampworked beads. At some point, you become quicker at getting the job done. However, your time should have value. And not only that, but your skill level as well. I have had someone ask why one bead would sell for over $100.00 (not mine btw) and that person had no idea how long it took to make, the skills involved, the preparation for parts that would be included in the bead and the possibility that for all the time spent, the bead may not come out of the kiln in a usable state. That bead maker is an artist just as I can tell you are. There are those who will recognize the levels of bead weaving and put a higher value on your work. And I’ve seen those pieces knowing full well what went into making them and why they were priced as high as they were. They are more pieces of art than everyday, run of the mill items very likely being made in a foreign country.

    It is a personal decision and I would not criticize your choice. But I sure hope you’re selling that headband for more than $19.95.

    • Megan November 15, 2011 at 10:03 am Reply

      Thanks for your response Pam, and I completely see where you are coming from. That is why when other beadweavers choose to price their pieces more in the $100 – $600 range I don’t scoff at them and tell them they need to lower their prices. Some of these sellers have actually found a market where their work can sell for this much. Hooray for them! (And I genuinely mean that!)

      That market just isn’t my market. I think I’ve found a customer base that I am comfortable with, and most of them don’t live in mansions or have hundred of dollars they can afford to spend on beautiful beadwoven pieces of jewelry.

      The headband? X-) Sold for $19.95.

      But I know that it sold to a girl who thought it would go perfectly with her Homecoming dress. I doubt she would have been able to afford a much larger price tag, but was very happy to find something unique and one-of-a-kind within her budget.

      Maybe I tend to look at these things through the customer’s point-of-view too much?

  3. madamesaslow November 15, 2011 at 9:57 am Reply

    Its really a tricky balance. At this point I’m going for slightly too high than too low. I’d rather lower my prices or have a sale or coupon since I’m still figuring things out.

    • Megan November 15, 2011 at 10:04 am Reply

      Good point. It’s important to have a little wiggle room so you can offer special discounts, or so you can afford to do consignment with B & M stores who take a percentage of the sale $$$.

  4. Sandy November 15, 2011 at 10:32 am Reply

    Thanks for sharing your thoughts on this. It is a hard decision to make. I can understand where you are coming from on the subject of pricing. It is not easy.
    I’m a quilter and in the quilting forums, I see that question come up often. One quilter suggested a formula for us to use and that has made my price decisions a lot easier. According to my quilting friends, I am still under pricing my quilts.

    • Megan November 15, 2011 at 11:01 am Reply

      If you have a quilting friend that is pricing higher, AND is selling consistently, I would take a look at not only how she is pricing, but how she is marketing her work. A lot of crafters in your same field will tell you you are underpricing because they feel you are contributing to bringing their own market value down. However, if their merchandise isn’t moving at higher prices, then I might venture out on my own to find a price range I am more comfortable with.

  5. irina November 15, 2011 at 11:11 am Reply

    I’m a beadweaver as well, and I had no qualms on pricing including time… although not $15/hour – that is my hightech salary, and it’s obvious it won’t work for handmade :-)

    on the other hand, free form payotte bracelets sell for $80 – $200: this is the price accepted by all.

    the way I work is, I calculate the ideal price I would like, and then look for similar items in shops that have lots of sales (of the similar item…, if the lots of sales are of other items it defeats the purpose ;-).
    if my ideal price is lower, I put it up a bit, if it’s higher, I sell it off line.

    thanks for sharing :-)
    http://www.RedCatArtBeads.etsy.com

  6. Brooke Shambley November 15, 2011 at 11:39 am Reply

    Personally, I agree with your decision to price to your market rather than using a formula. The formula that you use on the blog seems a bit unrealistic. My E-designs should be extremely expensive due to the high cost of Interior Designers, but the ladies that I wish to provide services to cannot afford a stereotypical Interior Designer. I do not make what I should, but I help the clients that I wish to help. It’s a hard trade off, but at times I think of it as I’m getting paid to do what I love!

  7. Kim November 15, 2011 at 11:48 am Reply

    What I don’t understand about these formulas is that they often tell you to take the price of the supplies and double it (I once saw that one said x6) – that’s making a profit off of the supplies. I always thought that it was quite simply take the price of the supplies, add on a wage (which, as far as I’m concerned -is- profit when people recommend £15 and hour – what job on earth would you make that money in anyway?), then maybe add a little more for a clean profit. The way I see it, if you enjoy doing it, you shouldn’t need to add on a wage, and -then- some more money. If it’s a commission, then it’s a different story, since you’re not making it on your own time and doing it the way someone else wants you to, but otherwise, I disagree with a lot of the formulas, to a point that I don’t even use them. I make my jewellery – I often don’t even notice how long it takes, the only way I ever have of knowing how long it takes me to make is by how far through the film I’ve put on for backgound noise is. I take the cost of supplies, then I give myself a wage, then I throw all that aside and look at the product and ask myself what I would pay for it, and honestly. It’s not failed me yet! Nothing seems too expensive, ‘nor is it too cheap. Though I suppose that wouldn’t work for a lot of things, but it does for me. I think sometimes people need to try it that way. Yes, you want to make money, but when you get a job, they don’t pay you on top of your time spent there, do they? I see this in the same manner.

    I think people should make their products, take into consideration the cost of supplies, and perhaps, rather than an hourly wage, think about how hard it was to make it, did you enjoy making it, and did it cause you any pain to do it (if you have back or chest problems, does it aggrevate it, or did it simply hurt your back a little hunching over the workbench?) and work from that.

    This is just my opinion, though, and I think I could probably make a whole blog post about it :P

    • MegansBeadedDesigns November 15, 2011 at 12:22 pm Reply

      “I take the cost of supplies, then I give myself a wage, then I throw all that aside and look at the product and ask myself what I would pay for it”

      I’m right there with you Kim! Thank you so much for your thoughtful comment!

  8. kjwinston November 15, 2011 at 2:31 pm Reply

    And don’t you wonder who came up with that formula? I don’t know anyone who sticks to it and makes a living. Thank you for this very reasoned approach.

    • MegansBeadedDesigns November 15, 2011 at 3:00 pm Reply

      I don’t know who came up with this one specifically, but there are variations of it all over the place. lol

      I think one could easily implement it if they create something that is quick. for example, if I made headbands that took me 10 to 15 minutes to make, it would make a lot more sense.

  9. pcourneya November 15, 2011 at 9:17 pm Reply

    Wow, what a great subject.

    I think we tend to work things backwards. We first make something, and then apply the formula to get pricing. We then, put the item it into the market. We should really begin with our market. Let’s suppose one is making jewelry and selling it into a market that wants to pay 20-50 dollars for an item. One then must ask himself, “what can I make that costs (including labor) 5-12 dollars to make”. That headband might very well be worth the 200 plus dollars, but not in this market.

    I might also mention that the various formulas produce what is usually referred to as a manufactures suggested retail price (MSRP). Retailers rarely sell items at that price. They only use it to create advertising. When you see advertising that says “70% OFF.” They are talking 70% off the MSRP.

    • MegansBeadedDesigns November 15, 2011 at 9:29 pm Reply

      Awesome points.

      until recently I worked at a department store retailer (similar to target, but not Target). Everything in the store was always on sale. ALL OF THE TIME. I couldn’t believe it when people would fall for it “Well, I have to get it, it’s 40% off!” Everything was ALWAYS 30-60% off. Nothing was every the price on the tags,

      I personally thought this was a poor marketing strategy, because it meant that people who only came in when a big sale was advertised would think that the store would be too expensive to shop at on a regular basis.

      This made me make the decision with my own business that I would not be one of those shops with constant sales and unrealistically high prices.

  10. FlightyFleurs November 16, 2011 at 8:38 am Reply

    This really is an interesting and divisive issue. I’m definitely more in your camp. At face value, my products (paper flowers and wreaths) look pretty simple, but I really do put an absurd amount of time into their production, particularly in planning color schemes and matching papers (and that’s effort I’m sure NO ONE thinks about when they look at the finished product). I found my prices by starting on the low side and then, whenever something would sell, the next round of products would be priced a dollar higher, and so on. It’s pretty obvious once you go too high, giving you a pretty clear picture of what the highest price you can charge is while still moving your products. That’s what worked for me. Good ol’ trial and error. =)

    • MegansBeadedDesigns November 16, 2011 at 9:04 am Reply

      That sounds like a simple but effective enough strategy. I just might give it a try eventually! Thanks for sharing!

      • pronetouncontrollablefitsoflaughters November 16, 2011 at 10:45 am Reply

        This is so difficult indeed! How can one compete with mass producers? Seems nearly impossible to me. I agree with FlightyFleurs–start of low then pick it up from there! Great advice!

  11. chickstyle November 17, 2011 at 8:23 pm Reply

    I start beading when I was like 12 and then I met wire and metal and totally felt in love with it. I like working with wire because I think I can get more creative any way it takes a lot of patience and time. For a period of time I sell my crafts and I understand pricing can be a total headache, I learned that I did not charge enough for the time invested but I was always worry on overcharging or setting the price too low and not getting my investment back. So I calculate how much it cost to made a pair or earrings or whatever I made then add how much I wanted to make so I could come up with a reasonable price and get my investent back. A smart way to do so is to buy on wholesome products it cost cheaper and you can get more out of it.

    • MegansBeadedDesigns November 17, 2011 at 8:27 pm Reply

      Buying material in bulk is simply business-smart! Thanks for the awesome comments and great points!

  12. Poison Garden November 19, 2011 at 7:23 am Reply

    Glad to see someone else out there struggling with this problem! We have tried the formula’s too but then lower the price significantly because it is a little unrealistic for our items.

  13. Sarah S November 21, 2011 at 9:23 am Reply

    I think, especially in the current market, all of us struggle with our prices. In general, I try to make lots of smaller items, like beadwoven rings, that make up quickly. I can then price them to include the time it takes. This puts them at a moderate price point, but not too high. Then when I do make something that is a little more time consuming, like a necklace or bracelet, I can charge a little less and not lose too much on my time.

    I think for many people, pricing depends on a lot of factors: is this a one of a kind art piece or a production run piece? Is selling this my sole form of income, or am I supplementing another job? Do I really NEED this piece to sell quickly, or am I okay with it being on display until just the right buyer comes in?

    All of this influences price.

    • Sarah S November 21, 2011 at 9:49 am Reply

      Ok, I got to thinking about this some more and had to post again.

      You say a headband can take 6-8 hours, but you are selling them for $19.95.

      Doing the math here, in a 40 hour work week, you could make about 7 headbands (if you made and did nothing else). At $19.95 each, that would get you $139.65 for the week. Then, beyond that 40 hours making headbands, you would have to spend time photographing them, writing descriptions, posting on Etsy, packaging and mailing, going to and attending the craft shows, ordering supplies – and most of this will cost money that will cut into that $139.65.

      At your current pricing as stated here, you are actually loosing money on that headband. And you are working around the clock.

      The question of pricing becomes, are you running a business or are you just a hobbyist?

      • MegansBeadedDesigns November 21, 2011 at 10:16 am Reply

        Thank you for your thoughtful responses Sarah! I guess I should point out that my headbands range from $14.95 to $44.95, so they aren’t ALL $19.95, I try to think of the materials, overall style, -occasions such as weddings can fetch a higher price- etc when pricing. I used my average $19.95 as an example though. I understand where you are coming from as far as the 40 hours work-week. Truth be told, if I wanted to make enough money to replace my day job, I would simply have to choose another craft to do it, or stick with only the simple rings, earrings, etc. items that don’t take me as long. The point of my post is that for those of us who do heavily time-consuming pieces, we can’t always charge for our time because the ending prices would be outrageous. Honestly, who would pay $279 for a headband? Maybe if it had precious metals or rare gemstones on it, but sequins and czech seed beads? I don’t think so.

        So I don’t just make headbands. I also make less time consuming items such as rings, anklets, lanyards, etc. I also sell beading patterns and tutorials, which take me a significant time to make, but I can sell an infinite amount of copies afterwards. Yes, if I ONLY sold headbands then I would be subject to a similar rule of charging for my time as those of the made-to-order folks. I think with any business model, a variety of products and price-ranges helps to cast a wider net.

        You make some awesome points though! I do dream of a day when I can charge at least $50 for similar headbands as in my example, but I am also aware that I’ll need better marketing, images, descriptions, etc. As of now, if I were to try to sell them at that range, they would simply sit there and never find a home.

  14. […] Charging for Your Time Why I don’t give myself an hourly wage when selling my handmade goods. […]

  15. 622press January 25, 2012 at 12:34 pm Reply

    Thanks for this post, I’ve just started embroidering by hand and I’m trying to answer this same question!

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