About WBC   |   News   |   Contact Us   |   Sign In
Taking Care of Business
Blog Home All Blogs
Search all posts for:   

 

View all (16) posts »
 

Pricing Your Handcrafted Products

Posted By Program Admin, Friday, June 22, 2018

 

Pricing your products correctly can be a challenge for many businesses, particularly those that create handcrafted items. If your prices are too low, customers may perceive that your items are cheap or poor-quality. If your prices are too high, you risk alienating customers. 

So what’s a business owner to do?

 

Here is a simple formula that many artisans use to calculate item cost:
Supplies + Your Time = Item Cost

For example. It takes you 15 minutes to make a necklace and your hourly wage is $20. The supplies to make the necklace cost $0.75. 

$0.75 (supplies) + $5 (your time) = $5.75 (item cost) 

RETAIL PRICING
To price the item for retail, multiply item cost by 2.5 or 3
$5.75 (item cost) x 2.5 = $14.37 (round to $14.50) 
$5.75 (item cost) x 3 = $17.25

You may want to take into consideration your overhead (equipment, advertising, website, Internet, phone, shipping supplies/costs, etc.) Average out these expenses and calculate a percentage as overhead cost for each item. 

The formula will look like this:
Supplies + Your Time + Overhead = Item Cost
Item Cost x 2.5 = Retail Price

WHOLESALE PRICING
One of the most common formulas for wholesale pricing is to multiply your item cost by 2. 
Using the necklace example:
$5.75 (item cost) x 2 = $11.50

You can also offer a wholesale pricing scale. For example:

Orders of 25 necklaces or more will get the x 2 pricing at $11.50 per necklace
Orders of 50 necklaces or more will get a 1.75 pricing per necklace at $10.06 per necklace
Orders of 100 necklaces or more will get a 1.5 pricing per necklace at $8.60 per necklace

Check out these links for more information about pricing:
Feltmagnet.com
Creativehiveco.com
Craftmakerpro.com

 

This post has not been tagged.

Share |
Permalink | Comments (0)
 
For more business resources
and information on the
Wyoming Business Council visit: 
www.wyomingbusiness.org

© 2017 Wyoming Business Council.

Access New Markets
      Trade Show Incentives
      Agriculture and Food Products
      Market Research
Association Management Software Powered by YourMembership  ::  Legal