Are you a creative person? Do you make crafts? Ever wonder, “How do I price my handmade items to sell? This is for you if you craft. If you are a photographer or painter, check out this post.
In the last blog post, I taught you how to get a tax id number. If you didn’t read that post you can read it here.
The next thing you’ll have to figure out is how to price my handmade items to sell. This can be a little tricky. If you have time to stop at some local gift shops or a craft show before the one you are signing up for, walkthrough that venue. Take the time to check out the craft, and compare it to yourself. Same materials or cheaper/more expensive? Is it quality? Take notes (mental). Then note the prices in your area. Pricing differs in different areas.
I live in Northeastern Minnesota where a lot of folks are kind of cheap. Unless the craft is being sold in the proper venue then folks will be bold and ask if you’ll take less. If this happens, you are not in the correct venue. 12-years-ago I sold reversible aprons from my own designs. I couldn’t sell an apron to save my life in my town, but an hour in any direction, they sold like hotcakes. I’ve also worked in the handcrafted business since 2004 so I know the market fairly well.
Determining Your Price
To help determine your price you need to determine what it costs you to make your item. My aprons used 2 yards of fabric. 1 for the front and 1 for the back, including ties and pockets. I ONLY shopped for fabric on clearance or on a great sale. So my fabric was $8, no tax as I told them it was for clothing, and tax wasn’t charged (Minnesota doesn’t charge sales tax on clothing.) Then there is the thread. I buy the large spools of 100% cotton thread, I buy enough for my project and then I wait until I have a 50% off coupon. Thread turns out to be pennies per apron so I estimate it at 30¢. I also had a button and a towel per one of the types of aprons I made. The towel was a hand towel I’d again buy on clearance or on sale for $2 per towel. I use a 1” button 25¢. So I had $10.55 in each apron plus my time.
Determining How Much to Charge for Your Time…
How to determine how much time you spend on making one item needs to first depend on how much you are charging by the hour. At that time $12/hour was a lot of money. That’s what I charged. $12 divided by 60 minutes (in an hour) is 20¢ a minute. It only took me 30 minutes to cut and sew my most expensive apron. 20¢ times 30 minutes is $6 labor. So now we are up to $16.55. I doubled the price and then some. I sold that particular apron for $38. Aprons are considered clothing in Minnesota so I didn’t charge or collect or pay sales tax.
Price Bundling
My aprons were 100% cotton, reversible, convertible, one-of-a-kind, and cheaper than the stuff from China. I had a good sales margin. I did not raise my prices in cities where stuff was more expensive because I had already found my sweet spot. Occasionally I offered a sale such as bundling 2- June Aprons (the one with the button and the towel) for $70 vs $76. They made great gifts. People also saw they were getting a deal and would sell lots of aprons because I used price bundling.