If you sell finished items, you’ve inevitably hit the “pricing roadblock”.
Determining how to price your handmade work can be difficult, and asking around or searching on Google can turn up more questions than it answers.
I see so many yarnpreneurs make the mistake of trying to compete on price, or simply guessing at their prices because they couldn’t find a simple formula to help.
That’s when I reached out to my good friend and fellow yarnpreneur Salena Baca to help.
Salena is the instructor for our Master Course titled My Crochet Career, and she’s developed a simple pricing formula that ensures you get compensated properly.
When I saw this, I knew it would be helpful to so many yarnpreneurs!
So I’ve asked Salena to explain her pricing formula and then I built a simple calculator you can use to easily plug in your numbers and voila! your price will appear!
Happy pricing 🙂
How To Price Your Products In 3 Simple Steps
Deciding how you will price your work is one of the hardest decisions you’ll make as a finished items seller.
When I began making items to sell, I had no idea where to begin.
Should I multiply my cost of goods by three?
Should I charge for materials? What about shipping? Am I charging too much? Am I charging too little?
When I began making items to sell, I continuously lost money for the first six months because I had no idea what to charge, and I was afraid to “compete” with others who sold similar items on places like Etsy.
I wanted to actually make money selling my work, so I came up with a really easy formula that I could apply to any item I made. When I stick to it, I have a clear price for my work, and I always get paid what I’m worth.
Step 1) What do I NEED to make per hour?
$10 an hour? $15 an hour? If you were to have a job elsewhere, what would your wage need to be? Think about it; you can only crochet so many hours per day, per week, per month. That precious time is valuable. An hour spent crocheting can take a toll on your body; your hands, wrists, arms, shoulders, neck, back… This is your skill, and it’s laborious. Your time spent on a project should be documented by the hour, and that is worth a fair wage.
Step 2) How much time will it take you to complete the item?
Let’s say you’re making a baby blanket, and it takes you 8 hours to complete. Let’s say you’ve decided that you need to make $10 per hour. You should charge $80 for your LABOR. Make sense? You’ve spent 8 hours of your time making an item, and you know what you need to earn for a day’s work, so don’t be afraid to charge accordingly.
“But I crochet really slow…” I hear this a lot, believe me. But, your time is your time. Your skill is your skill. You are making one-of-a-kind items by hand, and your time matters. If you are making a consistent array of items then you will naturally streamline your process to speed up just a bit. But, don’t skimp on the value of your time, and what it’s worth. You are worth a fair wage!
Step 3) Factor in the cost of materials.
Are you making a blanket with $12 in acrylic yarn? Add that in to the overall price. Are you shipping the item? Add that in, too. Let’s see what that looks like…
You made the baby blanket, and your LABOR charge is $80.
Add in the cost of materials, $12.
Add in the cost of shipping, let’s say $6.50.
The total you should be charging for that blanket is $92 + $6.50 in shipping.
Some of you will immediately have a sense of sticker shock. “But, nobody will pay $92 for a baby blanket…”
If this is your profession, you’re worth a fair wage. Your time is valuable, and you deserve to be paid a wage that makes this business a successful one for you and your future.
Peace, Love & Crochet –
Do you have more questions about how to price your work? Let us know in the comments below!
to use our plug-n-play pricing calculator!