How to Price Handmade Crafts So You Actually Make Money
Most people who sell handmade things start by looking at what others charge and picking something close. It feels safe. The trouble is that you do not know what the other seller's costs are, and you probably have not counted your own.
Here is a straightforward way to price a craft so the sale leaves something in your pocket.
Step 1: Count your materials, per item
Materials are the easiest part, but people still skip pieces of it. Work out the cost of everything that goes into one finished item.
If a roll of ribbon costs $12 and makes 6 bows, the ribbon is $2 a bow. If a wreath form costs $20 and you get 4 out of a pack, that is $5 each. Add wire, glue, floral picks, tags, and anything else you use. Small things add up. A few cents of hot glue in each piece matters when you make a hundred pieces.
Buy in bulk when it makes sense, but always figure the cost per item from what you actually paid.
Step 2: Put a price on your time
Time is where most crafters shortchange themselves. Time how long an item really takes from start to finish, including cutting, assembling, cleaning up, and packing it.
Then pick an hourly rate you would accept from anyone else. If a wreath takes 45 minutes and you want $15 an hour, your labor is $11.25. If it feels wrong to pay yourself, remember that the price of your time is part of what keeps the business going.
Step 3: Add the costs that are not in the item
There are costs that never show up in the supply list:
- Booth or table fees at craft fairs
- Selling site fees and payment processing fees
- Packaging, shipping supplies, and business cards
- Gas to get to the fair
- Waste, mistakes, and pieces that don't sell
A simple way to handle these is to estimate your total for the year and spread it across the items you expect to sell. Or add a fixed percentage on top of the cost. Either is better than ignoring them.
Step 4: Add your profit
Materials plus labor plus these extras is your cost. It is not your price. Add a profit on top, the money that stays in the business so you can buy more supplies, upgrade equipment, and have a good month and a bad month.
A common starting point is to set your retail price at about twice your cost of materials and labor combined, then check that number against your own math. Some items will support more. Some will not, and that's useful information too.
An example
A door wreath: materials $14, labor 45 minutes at $15 is $11.25, extras $3. That is $28.25 in cost. Priced at $56 or more, you're covering your costs and keeping around half. If shoppers at your fair balk at $56, you'll know whether to cut the time, find cheaper supplies, or sell it somewhere else.
Wholesale and sales
If you ever sell to a store, they'll usually expect roughly half your retail price. Your retail price has to be high enough that half still leaves you a profit. Discounts work the same way: know your cost, so you know how low you can go.
Check your numbers regularly
Supply prices change. Fees change. Do a quick check once a season, and look at which items you sell the most of. The bestseller might be the one making you the least.
Where Craft Pal fits
Craft Pal is a free app for craft sellers. You enter your materials and what they cost, build recipes for the things you make, and log your sales, and the app shows your profit. It keeps your data on your own device and works offline once loaded. It is free and supported by ads.
Try it at Craft Pal.