If you know anyone who makes beadwoven creations, or have tried it yourself, you know that it takes FOREVER. Even after years and years of practice and the development of some seriously mad beading skills, most of my pieces still take me several hours from start to finish. Even the simpler pieces take me at least 1 to 2 hours each.
Other time consuming crafters (this post isn’t exclusively for beadweavers) can also relate. When it takes multiple hours to finish a project, following most handmade pricing formulas is daunting. Take this very simple, and often used handmade pricing formula:
(time x $per hour) + 2(cost of materials) = wholesale price
wholesale price x 2 = retail price
The retail price is what you charge in your online shop, at craft fairs, etc. The wholesale price is what you offer boutiques and shops so that they can re-sell your items at full retail price for a profit. It is recommended that, depending on your level of skill, you give yourself at least $20 an hours for your labor.
While this formula works all fine and good for one of my quick projects, for example, a glasses lanyard that takes me 20 minutes to make, it gets tricky when using it for one of my more time consuming projects, such as a cuff bracelet that took me 4 hours. (I’m totally making up my supply costs here, so just bear with me.)
(0.333 x 20) + 2(3) = $12.67 <- wholesale price
12.67 x 2 = $25.33 <- retail price
While over $25 feels a bit high for me still, it’s a reasonable price and I could live with it.
Now let’s try it with the bracelet cuff…
(4 x 20) +2(6) = $92 <- wholesale price
92 x 2 = $184 <- retail price
Okay. Let’s take a moment to process this. According to one of the most conservative handmade pricing formulas out there, I should be getting close to two-hundred buckaroos for one of my beaded bracelets. TWO HUNDRED DOLLARS.
I would LOVE to actually sell my pieces for that much, but let’s be honest here. I’m not working with solid gold or silver, I’m not incorporating diamonds or rubies, my items are made up of mostly glass seed beads. Who is REALLY going to pay me that much for a new accessory. I’m simply not targeting the affluent, upper-class fashionista audience that apparently I should be. While my customers are happy to support handmade, and are willing to pay a bit more for a unique piece of jewelry that they won’t be able to find anywhere else, I have a hard time imagining that they would be willing to pay anything more than $80 for a bracelet like this, and even that’s pushing it with most of them.
So what’s a time-consuming crafter to do? How can we continue to create the unique, labor-intensive items we love, be able to actually SELL them, and make enough money off of our sales to consider our model a realistic business venture? Here are a few solutions from yours truly, a time-consuming crafter who does not charge for her time, but still manages to make money selling handmade… (Totally just referenced myself in the third person. Do I get an award for douche-baggery now?)
Figure out ways to speed up the process.
For me personally, this means prepping several projects that utilize the same supplies at once. This can also mean making multiples of the same project, one right after another. You’ll have all of your necessary supplies out and ready, and the repetitiveness of creating the same thing over and over again will result in better timing for each one.
Mix your time-consuming projects with non-time-consuming ones.
Just as in the glasses lanyard example above, I buffer my Etsy shops and craft fair booths with plenty of “filler” pieces that take much less time to make, but ensure I have a full inventory. Some of these simple items take me less than five minutes to create, and I can easily make several at one time. As a result, these projects often make up for any profit-loss that the most time-consuming projects take-up regarding labor spent.
Optimize what you sell.
What else can you sell besides your finished handmade pieces? Can you make and sell patterns of your original designs? Maybe you can sell left-over supplies as destash lots, or get paid to teach a class in your art form. If there are other ways in which you can supplement your income from selling, it never hurts to explore those options.
Keep all of your costs in mind.
When coming up with prices for your items, don’t forget that your costs aren’t all included in your labor and materials. Remember shipping charges, packaging materials, craft booth fees, Etsy and PayPal fees, time spent photographing and writing descriptions for your items, marketing time and costs, and so on. Even if you are like me, and planning on ignoring the results of the basic pricing formulas for handmade, you still need to make sure you are covering all of your bases.
Consider your target market.
If you are targeting geek-item-loving college students, chances are, they don’t have a whole lot of cash to spare and you need to do your best to keep your costs down so you can charge less for your items. However, if you are targeting an older, more well-to-do audience, you may be able to splurge on some high-end supplies and charge a bit more for your creations.
Consider the tangible nature of your product.
Some items can command a higher price simple because of what they are. Others have much lower expectations, due to the very nature of the item. For example, everyone expects a T-shirt to be a basic, low-priced piece of clothing. Even if you were to spend hours and hours hand-embroidering a design onto one, most people would still balk if you commanded anything higher than $30 as the final price. However, those same people would probably expect a wedding dress to be a much higher-priced item, and often come prepared for that when shopping around for one. If the previous hand-embroidery had been completed on a vintage wedding dress, even if it initially cost you the same as the blank T-shirt, you could command ten-times the asking price, and no one would question it.
Whenever you start to get caught up in calculating your labor time, your supply costs, your marketing tactics, etc., it doesn’t hurt to take a step back and consider what your item actually is. A t-shirt. A necklace. A scarf. You can cover a toilet seat with Swarovski crystals, but it’s still just a toilet seat. If you REALLY want to push the limit of what customers expect to pay for your product (like Starbucks did, for example), then you need to preprepared to work on some serious branding efforts to change people’s mind-sets.
How high is your craft-barrier?
Your craft barrier is the design and creation skills you possess and use to make your items. Basically: how many other people can make what you make, or easily learn how to? If the answer is anyone who can shop at Micheal’s, then you won’t be able to charge very much for your items. If you price too high, people will simply get their goods from someone else selling the same thing for less, or they will figure out how simple it would be to make it themselves. If you have a low craft barrier, you won’t be able to make much of a profit in order to compete.
On the other hand, if you have a high craft barrier, you get to command a higher price. The more skills and experience required to master your craft, the more people can expect to pay for it. Before slapping a price on your goodies, keep in mind how many others are already making what you make, and if they are at the same level of skill as you or not. If the number is small, you have good reason to ask for more.
What did I miss? Please share your tips for pricing time-consuming items in the comments below. I love hearing from you!