There are some very different approaches you can take to price your craft. Choosing the right one is important because it makes a big impact on the amount of money you make. The first thing you need do is throw out any preconceived notion about what you think your craft should is worth. Many amateur crafters tend to grossly undervalue their work.
Understand the principles of pricing and you will probably realise that your craft is worth much more than you thought.
Using “Limited Supply / Premium” Pricing Principle
There is one major reason that should have a direct influence on the price of a handicraft. It is also the same reason that is very often ignored by a craftsperson. This ignorance almost always leads a selling price that is far lower than what you can actually charge. This reason is that of limited supply.
Unless you are a huge production unit it is likely that you can only create a finite number of units of a particular craft. Specially in a particular timeframe.
You probably know and understand the relationship between demand and supply. When the demand out matches the supply, that is, more people want a particular object than they are actually available, there is a competition between the buyers.
When there is competition people who want the object more are willing to pay more for it. You can and always should take advantage of this fact.
You have a limited number of items to sell in a particular batch, of a particular design and in particular timeframe. Uses scarcity to get higher prices for your crafts. How? By making people compete for the same craft. How you do this? By creating an auction on eBay or other auction sites. We will talk more about auctioning a little later in this post.
“Fixed Price” Pricing Principle
The second strategy is to sell your crafts at a fixed price. We cannot tell you how much to charge for your craft. You will take the following things into consideration.
- Are you into premium craft category?
- Cost of materials.
- Numbers of hours put in and how much you would like to be paid for your labor.
- Your profit margin on top of the hourly work-rate.
- All overheads that need to be met.
“If you have put a certain price on the craft and you are still getting more orders you can by all means increase the price.”
One of the principles of pricing any product says that the right price to sell anything is “as much as you can sell it for”. Therefore do not feel guilty about raising the prices till the demand has come in balance with your supply.
The disadvantage of selling your craft at a fixed price is that you might get to hear complaints that your craft is too highly priced from people who have a certain figure in their heads about how much your craft should cost. These people might be comparing it to a similar craft from another crafter.
The kind of the feedback can be damaging because people now have the liberty of posting such comments on public platforms like social networking, your blog and website etc.
Be that as it may stand firm if you have used sound principles and examples in setting your fixed-price and it is working just fine for your business. The instance where fixed-price method is better than the auction method is where you have a craft that is not restricted by supply.
For example, if you are selling prints of your digital artwork. Unless you want to artificially create a supply shortage, the same digital art can be ordered numerous times by numerous wild without the need of the extra work.
Some artists choose to create an artificial shortage by saying something like “only 10 prints available”. Even when selling at a fixed price the notion of limited supply creates the fear of a sell-out in the buyers mind which mostly leads to faster sales.