Ever wondered about why handmade goods cost more than something from the big box store? Here is the main reason plus how to calculate your own handmade price point.
“Dang, That’s Expensive!”
That’s something that a person once exclaimed to me at my booth. At the time, I was pretty taken aback and wasn’t sure what to say to this person, but since then I’ve been thinking a lot about the price of handmade goods and wanted to talk a little bit about it here.
Here’s the thing about handmade: it’s most likely going to cost more than something store-bought. I don’t apologize for my prices, but I do understand that paying a premium for handmade goods isn’t for everyone.
A Living Wage
I pay myself a living wage, and that definitely adds to the cost of my goods. Sure, you could find yourself a lunch bag or an apron for less than what I charge, but who made it? Chances are, it was a child in a sweat shop making pennies per hour. That child lives in poverty, has no medical insurance, and works 10-12 hour days under horrific conditions.
Some crafters short change themselves, underpricing their goods and not compensating themselves for their labor. Part of that, I’m sure, is that we’re comparing our prices to what you’d pay at a Wal-Mart or a Target, and there’s just no way to compete with those places price-wise.
It takes us time to hand craft each item that we make. Some items are quicker than others, of course. It takes me hours to make a Lunch Kit, which limits the number I can produce. If I’m going to put food on the table and keep the lights on around here, that means I need to charge more. For something like my recipe cards, once they’re designed I can send them off to Greener Printer, so the portion of the price that goes to labor there is much less.
I think there’s a gap in education when it comes to handmade wares. Not the schooling sort of education, but I think that since things like labor are invisible to shoppers, it’s hard to convey that intrinsic value, you know what I mean?
Folks see the price tag and balk, because they don’t understand what they’re paying for. When you buy handmade, you do more than just warm the maker’s heart: you’re supporting her choice to follow her heart and do what she loves. You’re saying that you respect her time, her talent, and her imagination. You’re putting money into the local economy, and you know that what you’re purchasing was made with fair labor practices.
I hope none of this came off as self righteous or ranty. It’s just something that’s been on my mind lately, and I felt like I needed to get it out there.
I don’t think that folks who recoil a bit at handmade prices are advocating sweatshop labor or even being insensitive – I really think it’s just a question of education. People don’t always know how much time and effort go into handmade items, and I think that has to change if this movement is going to continue to grow and thrive. If we’re going to support ourselves as artists, we need to be able to pay the mortgage and feed ourselves, and we can’t do that if we undervalue our work.
Calculating Your Price
I know that it took me quite some time to figure out how to price my goods. If you’re interested in my formula, here it is:
cost of materials + (hourly wage)(number of hours) = wholesale price
My formula for retail price varies a bit. A lot of folks just double the wholesale price, but I don’t always do that. A fellow crafter mentioned that her wholesale price is around 60% of her retail, and that feels a bit more right to me. I think it’s a matter of weighing your cost versus what the retail market will bear.
It’s a pretty simplistic formula, and there are other ones out there that you might want to take a peek at, too. Here are some good resources for finding the right price for your items:
- The Handmade Marketplace by Kari Chapin
- Pricing Your Handmade Goods on What the Craft
- The Art of Pricing on the Etsy blog
So, my crafty pals, do you think you’ve been pricing your goods appropriately? It took me ages to come up with prices that I felt comfortable with, and I’m still tinkering with my formula a bit.
Image Credit: cash register photo by oufoxy; hang tag photo source unknown – if this is your photo, please email me, so I can give you credit!