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Monday, June 23, 2014

How To Determine Sales Price For A Handmade Item ?

SewCalGal frequently hears from quilters, as we as sewing and embroidery enthusiasts how much to charge when they make a handmade item, or perform a service (e.g. longarm, machine embroidery, etc.).  There are a variety of methods.  But what ever formula or tool you use, don't undersell your skills and service!  Your time is worth every penny you get paid.

To start, be sure to keep a log of ALL of your hours and expenses.

Some apply a formula to the material such as 2, 2.25, 2.50, or 3 times the cost of supplies for final payment.

Some apply an hourly rate for their time, which they set as what they feel they are worth.  Hourly rates can vary based on your skillset, service and how much you are in demand.  I know of several designers, as well as quilters right now who are totally swamped and are in hot demand that really should consider increasing their rates.  Several are at the point where they have so much to do, the increased rates could allow them to move to the next level where they could hire an assistant for cutting, piecing, paperwork, etc.. So where every you are in your home based craft business, there are things to consider when you get overloaded with work!

There is also a free Crafts Calculator that you can use online, or download the free APP.  It is very simple to use.

You simply enter the cost of your supplies, the hours you worked on the project and set the level of your skill (e.g. Novice, Competent, or Expert).  You can also easily adjust the scale of profit that you want to achieve from 10% on up to 100% profit.

When you press the Calculate Sale Price it comes back with a suggested price to sell your creation (or service).

This tool is very easy to use.  What I also like about it is when a crafter is asked "how much" and struggles with telling the person the final price, this tool could be a good tool to have your customer use.  You could give them a ball park on cost of supplies, how many hours you "estimate" the project to take, your skill level,  and the % you want to set your markup to be.  Maybe having them play with this tool initially, will help some customers better respect what the final cost would be for creative souls that need to earn a living.

Check out this tool at:  http://craftscalculator.com/

If you make and sell handmade items, or a service, SewCalGal is also interested in hearing how you price your services.  I hope you'll leave a comment to share such insights, or email me if you do not want your details published.

UPDATE:  Katie shared that she found an APP in the Apple Store for this type of calculator.

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Brenda said...

I always joke that my quilts are free or four figures. Seriously, I don't know how to price something to sell, so I'm interested in this app/link.

Daryl @ Patchouli Moon Studio said...

Pricing handmade things to sell is very difficult and selling handmade things is even harder. I have been trying to sell my creations off and on for decades. I followed the advise of others like you said here and didn't price too cheap. Nothing sold. I lowered my prices and still I didn't sell very much. People compliment my work all the time, yet they don't buy. I tried selling at craft shows and online with little results at the shows and no luck at all online. There is way more competition out there now than there was decades ago. The market is way too saturated that people just aren't buying like they used to. Plus so many more people are creating things now themselves.

Since I cannot keep everything that I make and I cannot give all my creations as gifts to the same family and friends, I wanted to sell some of my things. Well I have sold a few things here and there, but not as much as I would like to. I cannot charge what I am really worth because no one would pay that price. They don't even want to pay for my material cost with free labor. Unless you create items yourself, people have no idea what the materials alone cost let alone the time to create something. I like to make bags and I cannot ever sell them for enough money to get any hourly wage. Sometimes my materials alone can cost me $40, and people don't want to spend much more than that to purchase a bag. I made a bag once that took me 3 long days (over 24 hours total)to make. Even if my material costs were free, I wouldn't be able to sell that bag for much over $50, so I would be making around $2 an hour. That doesn't include wear and tear on my sewing machine, iron, costs of upkeep on my sewing machine, electricity, other supply costs like needles, etc.

I am a quilter too. People don't want pay a lot or quilts either. I do mostly small wall quilts. But I have made bed size quilts. If you create a quilt top and have to pay a long arm quilter to quilt the quilt for you, the cost of the quilting alone is $150.00 or more. I find people who don't understand those costs won't buy. If you try to educate people they still don't really get it unless they try to go out and buy everything they need to create an item themselves. Only then will they appreciate the work of any artist or crafter.
So no matter what your formula is for pricing your creations, you have to be realistic and realize that unless you are selling to the rich and famous, you probably aren't going to sell much or get as much money as you would like. I create for my spirit and my soul. If I am able to sell something that's great, but I know unless I price my things more affordable, they just aren't going to sell. That is unless I become famous myself, lol!!!

beaquilter said...

great calculator, I just bookmarked it, then tried a quilt I had priced last year for $350 and this calculator said $960- way too much! so... hmmmm and even for $350 people won't pay that. But I won't lower it anymore than that....sigh.

Nancy at EmbroideryIt.com said...

I'm just beginning to sell on Etsy so thank you very much for letting me know about this app. I downloaded it!
Nancy in Grand Rapids

Barb said...

That is awesome, thanks so much, I will have to use this.

Missy Shay said...

Thank you, I'm going to pin this for future use!

Vivian Helena said...

Hi,, I looked up the calculator, have you bought it and tried it? There is a cost of 99 cents. Not that that is the end of the world,but curious as to how you like it?

Katie said...

what an awesome tool -- does it come as an app? this would be great for vendor events to show people how you get your prices.

Brandy Pettit said...

Thank you for sharing this tool, I am always hem-hawing over what to tell people when they ask prices for most of my crafts. I do have my cake decorating prices down though, I charge $2.75/serving, be it wedding cake or birthday cake. It's middle of the road for our town (Walla Walla, WA) but I make plenty in profit and still am affordable with a great tasting product (which I think is very important). I figured out my pricing by getting quotes from the places around town, then figured out my cost, and also decided how I feel I compare to the competition (definitely better than Wal-Mart, not as fancy as the cake shop downtown) and settled on my price. I don't calculate my time, I have pretty well accepted that I will probably never be reimbursed for my time. But I don't care too much about that, I enjoy creating for others, and that pays me more than money can. Thanks for the bit of exploration into pricing, this is great for me to talk about, I'm excited to see other people's thoughts!

Judy B said...

Thank you for a great link!