How To Price What You Make In 3 Simple Steps
Deciding how to price the items you make is one of the hardest choices you’ll face as a Yarnpreneur.
In fact, there are a lot of questions that surrounding this topic:
Should I multiply my cost of goods by three?
Should I charge for materials? What about shipping?
Should I check Etsy for similar items, and prices?
Am I charging too much?
Am I charging too little?
When I began making items to sell, I consistently lost money for months because I had no idea what to charge, and I was afraid to “compete” with others who sold similar items on places like Etsy.
I wanted to actually make an income when selling my work, so I came up with a really easy formula that I could apply to any item I made. When I stick to it, I have a clear price for my work, and I always get paid what I’m worth. And, this structure can work for anything that you make to sell!
Step 1) Pay yourself by the hour!
If you were to have a minimum-wage job, what would your hourly pay be?
While I’m not suggesting minimum-wage is your top value, I am suggesting this is a good starting point to consider.
Think about it; you can only work so many hours per day, per week, per month, and that time is valuable. An hour spent hand-crafting can take a toll on your body; your hands, wrists, arms, shoulders, neck, back… This is your skill, and it’s laborious.
Your time spent on a project should be documented by the hour, and that is worth a fair wage. So, research what the minimum-wage is in your area and consider that as a starting point for your time!
Step 2) How much time will it take you to complete the item?
Let’s say you’re making a baby blanket, and it takes you 8 hours to complete. Let’s say you’ve decided that you need to make $10 per hour. You should charge $80 for your LABOR. Make sense? You’ve spent 8 hours of your time making an item, and you know what you need to earn for a day’s work, so don’t be afraid to charge accordingly.
“But I crochet really slow…” I hear this a lot, believe me. But, your time is your time. Your skill is your skill. You are making one-of-a-kind items by hand, and your time matters. If you are making a consistent array of items then you will naturally streamline your process to speed up just a bit.
But, don’t skimp on the value of your time, and what it’s worth. You are worth a fair wage!
Step 3) Factor in additional costs.
Are you making a blanket with $12 in yarn? Add that in to the overall price.
Are you shipping the item? Add that in, too.
Let’s see what that looks like…
You made the baby blanket, and your LABOR charge is $80.
Add in the cost of materials, $12.
Add in the cost of shipping, let’s say $6.50.
The total you should be charging for that blanket is $92 + $6.50 in shipping.
Some of you will immediately have a sense of sticker shock. “But, nobody will pay $92 for a baby blanket…”
If this is your profession, you’re worth a fair wage, your time is valuable, and you deserve to be paid a wage that makes this business a successful, sustainable one for you and your future.
Do you have questions about our pricing structure?
Let us know in the comments below!
Peace + Love + Crochet