I often get asked for advice on pricing, and my heart sinks. On one hand I want to shout "Charge a proper rate, get a decent wage" but in reality any crafter will tell you that that hardly happens.
To earn a 'decent wage' you really need to establish a name for yourself. This is the hard part. It involves a lot of work on your part, work apart from your beloved crafting. You need to be up on Social Networking - push that Facebook page, Tweet those Twitter updates, hover around Pintrest, post on Tumblr and of course update your blog regularly. Shove your name and your work into peoples faces - every single day, do NOT let them forget you. Of course, while you are busy doing that you cannot find any time to make anything.
Once you have established yourself a name and you have people hankering for your products, then the pricing gets much easier. But for us mere mortals down here on the 'no-one knows who I am' shelf, things can be a little different.
So, for arguments sake, let's sake you want to earn £10 an hour. It's not a great wage, it's certainly not on par with other craftspeople such as plumbers, electricians, mechanics (It's a form of craft, right?) but it's ok, it's better than minimum wage, better than delivering the local free newspaper in the rain.
You take some headpins, thread some beads on, make a loop, add to an earring wire, repeat - one nice pair of beaded earrings. Personally that would take me less than five minutes to make.
Those five minutes however do not include sourcing the beads, making the purchase, going down to the Post Office to collect the parcel because the Posty Person was too lazy to follow the directions round to The Shed!
Now if I was working on a basis of £10 per hour, five minutes would be about 84p.
Let's look at the approximate costings:
- 10 Swarovski Beads - 80p
- 2 Sterling Silver Earwires - £1.50
- 2 Sterling Silver Headpins - 50p
- Time - 84p
- TOTAL = £3.64
Not bad for a pair of sterling and Swarovski Crystal earrings huh?
Imagine though if they were cheaper Chinese beads, and plated findings:
- 10 chinese crystals - 20p
- 2 plated earwires - 10p
- 2 plated headpins - 6p
- Time - 84p
- TOTAL = £1.20
Now, THIS is what people want to pay in my experience. It doesn't/shouldn't matter to you as you get the same amount in wages, but it does, because you want to use quality products. Your customer will look at your prices, then go and buy the product in Primark. Quantity not Quality in many cases I am afraid.
But these earrings of course are going to be relatively cheap, what happens when you put a lot of time into a piece?
I had a necklace on display at work, not for sale, just to showcase a class I was going to run. A lady asked me how much it would be if I was to sell it. My immediate thought to myself was "You will never buy it once I give you a price", I knew this, it was displayed in Hobbycraft where people come to buy their craft products, if it was displayed in an art gallery would she have dared to ask? I think not!
This particular piece was a peyote link chain, very tactile, everyone loves holding it, but it took me 15 hours to make it - at £10 an hour that should be £150 before the price of the beads (which as is happens was only around £3.00).
If I had have said £153 she would have had a heart attack I am sure, so doing some quick calculations in my head, which went something like this - the beads cost £3.00, time has already been spent and gone, it's hung around a long time, probably will never make another - let's say £30. (That's under £2.00 an hour!)
I tell her it took 15 hours to make, I tell her that at £5.00 an hour (which is below minimum wage) and not including materials, it would be priced up at £75, I tell her I couldn't possibly let it go for anything lower than £30.
As predicted, she nearly died on the spot, recovered, then proceeded to tell me it wasn't worth anything like that and she thought it would be "about a fiver".
I calmly took my necklace off the display and walked away with it. (actually, I wasn't that calm :) )
One problem with under-pricing is something you might not think of until it happens to you. You decide to sell a pretty bracelet for £10. The material cost is relatively low, say £2.00, but it has taken you 3 hours to make it. You think, OK, it's made, let's just get some money in on it, and £8.00 profit isn't bad.
Now imagine this, a lady picks up your bracelet, admires it loads, beautiful it is, you are grinning like a Cheshire Cat, then she says - "I would like to order 12 please. Do I get a discount?" You agree on £9.00 a piece. Your first emotion is "WHOOPPPEEE" I got a commission, you order the beads, order the wires, sit down to work. 36 hours later you have finished, you are sick to the back teeth of seeing this blooming design, you never want to make it again, EVER !!
You deliver the goods, you get paid - £108, seems like a lot, you might order pizza tonight to celebrate :)
Lets break it down:
- Materials (originally £2.00 worth, but as you ordered them specially you had postage to pay) - £36
- Time at 36 hours at minimum wage of £6 per hour - £216
- TOTAL - £252
- Total Loss - £144
Gulp! Ok, so taking your time out of the equation you have made £72 profit on materials, but you really DO deserve to be paid you know.
Here is another example of my own.
I made a Lynn Davy special which I named Cottage Garden, took me 14 hours to make - all weekend in fact, I sent it down to my Mother-In-Law as she wanted to sell some of my stuff on a craft stall at her craft group (there was no beaders amongst the group) I had to price everything up, and as it was close to Christmas I priced it to sell. Except this piece, that really I didn't want to sell, I just wanted to showcase it. I priced it at £75 thinking it would put people off. (I did have Lynn's permission to sell it by the way, as it was her design I thought it only right to ask)
It didn't put people off, it was the first thing to sell. Now let's work out what I made on it:
- Materials - approx £5.00
- Time 14 hours at £10 per hour - £140
- TOTAL - £145
- Sold for £75
- Loss = £70
Looking at it another way, £75 take off the materials cost = £70, divide by 14 hours spent making it = £5.00
I actually made £5.00 an hour making that piece. Not bad I guess if you are crafting for pocket money and not to make a living.
I know crafters who have had a bit of hassle for underpricing, personally I think it's no body's business but your own deciding on what to charge. Just because my neighbour on the next craft stall sells a similar product for less does not mean I will change my price structure. Neither does it mean that I can give her a hard time about raising her prices (trust me, I have seen this happen) If customers want your item enough, they will buy it.
Be confident in your prices. Always charge on the high side if you can as it is much easier to drop your prices later if need be, rather than hike them up. Buyers think you are being greedy if you put your prices up, not many would realise that you were actually charging too low to begin with.
Be wary of 'sales', to me they mean two things - 1: the item has hung around too long and you need rid of it, 2: you need money, fast. Better just to quietly drop the price.
So there you have it, clear? No, I thought not. I don't think pricing your own crafts will ever be clear. It just needs to be something you are happy with. Just make sure people know how many hours you put into making your stuff and if necessary ask them if they would work for £2.00 an hour - not many would, trust me!
Right, off to put some crafting time, this blog has just cost me £10 in wages ;)