Agonizing over your prices? Worried you are losing money with every sale? Afraid to raise your prices because you’re sure people won’t buy?
You need a pricing strategy
After years of selling at craft fairs, wholesale to shops, through my own store, and online on Etsy and Amazon Handmade, I came up with a pricing strategy that continually earns a profit.
A profitable pricing strategy example goes like this:
- Calculate the exact cost of making your item. This includes materials, labor, and an estimate for overhead (an estimate because you probably work from home, right?)
- Research what products similar to yours sell for in similar markets. If you sell on Etsy, check out prices on Etsy. If you sell at craft shows, visit several and note what other sellers ask for items like yours. Find craft shows here.
- If your asking price is lower than the average market price, raise your prices to around the average.
- As long as your total production cost is less than your asking price, you are profitable.
- But are you profitable enough to expand through advertising or selling wholesale to stores. Use the Profit Calculator option here for a live pricing strategy in marketing.
- After you know your costs and the average price of similar items, look at ways to reduce your costs and ways to enhance the perceived value of your items so you can successfully raise your prices. Examples, include gift wrapping or boxing, selling in sets or limited editions, using earth-friendly materials, or more expensive looking materials in production.
That’s the pricing strategy I’ve used to build a 6-figure crafts product line. It worked! Customers were happy and my profit margin allowed me to run ads.
How to price your art works differently. Artists often come up with a price per square foot based on their time and experience. The greater the reputation, the higher an artist can ask.
To help you figure out your own profit margins, I’m updating a more complete online Handmade Products Pricing Calculator to give you a more complete and profitable pricing solution.
Meanwhile, check out the net Profit Calculator here to discover if you are really making a profit or losing money. If you want to grow your business through running ads or selling wholesale to stores, you have to know your exact costs.
The tool above will help you calculate your true profit. It’s not unlike a cost calculator to build a house, except that you don’t have as many expenses. You are just adding in all those little things that go into making your crafts or other things to sell.
Some full-time makers earn steady profits with their work. What are the pricing strategies of these pros? Pretty much what we said above.
Without a strategy, worries over how to price a product can leave you anxious and paralyzed.
Ditch the anxiety by discovering the real cost of every item you make to sell with the pricing profit calculator above.
When I first started selling my crafts, pricing stressed me out because I suspected, perhaps like you, that I wasn’t earning as much as I should have from every sale.
Knowing your margins allows you to grow at the pace you want your dream business to take shape.
For more help with what a pricing strategy can do for your business, see How to Price Crafts and Things You Make to Sell.
Check out more craft business books that can help you get your handmade products in front of more online shoppers.
