Cha-Ching! How Much are Your Handmade Goods Worth?
When I first began selling amigurumi I priced them around $25 and I was terrified I was ripping someone off. I felt so strange receiving money for something I had made and didn’t want to appear greedy. I quickly realized that my animals were worth more than that and I went up to $40! I thought no one would buy them for such an exorbitant amount, but they did. I began to realize if I wanted to be more serious about selling I needed to know their value.
Pricing handmade items is difficult, really difficult. Not only do you have to consider your material costs and hours spent, but you likely have emotions tied up as well. For me, each piece I make is truly a labor of love. Each one becomes a character with a personality and a name specially chosen for him or her.
Because I know how attached I become to each animal, I decided that a straight handmade formula would work best for me. I researched different ones and came across the one that made the most sense to me:
(Cost + Materials) x 2 = Total Price
Determining the materials part wasn’t too tricky. I took the price of the original skein of yarn and divided it by the number of ounces to determine the cost per ounce. Then I used a food scale to weigh my leftover yarn so that I would know exactly how much I had used. I then added in the cost of small things like safety eyes, poly-fil stuffing, embroidery floss, etc. and gave them a round number, typically around $1. I then added up the ribbon and packaging box I used as well.
The cost part is a little tricky. Cost needs to be what you want to pay yourself for making the item. I decided that my cost would depend on the project. An easy project might only be $15 for cost, while a complicated, time-consuming project would be $30.
Here’s an example of how this would work. Imagine I am making a squirrel and he’s not easy but not terribly difficult and my materials totaled $8.73.
Cost $20 + Materials $8.73 = $28.73 x 2 = $57.46 Total Price
But this formula began to bother me a bit. It didn’t take into account my hours or my skill. I did a little more research and came across a fantastic podcast from the Merriweather Council. One piece of advice Danielle gave stuck with me. She said to price items so that when you sell it you will be happy. That really resonated with me. I want to be happy when I hear the notification from Etsy that an item has sold.
But I needed something more concrete to use as a pricing model. I decided to time how long it actually took me to make an animal. I started with Percy the Pig. He took a staggering eight hours. I had severely underestimated how long my project actually took to crochet. The little backpack he carried took an additional two and a half hours! The entire project totaled ten and a half hours! Yikes! My pricing needs to take my time into consideration as well.
For now I’m pricing based on my time, not the difficulty level. I have decided on a price per hour that I feel my time is worth. It’s a very simple formula.
Time x Dollar Amount = Price
My pricing model will likely evolve over time but for now this seems fair to customers, but also for me as well. Ultimately you are the only one who can decide how much your items are worth, but do yourself a favor and do your homework! You are likely undercharging for your handmade treasures!
This is a great article ~ it really is a tricky thing to do, price what you make, especially when I’m so slow at crocheting. Thanks for your great articles & beautiful makes ~ they are very inspiring 🌞
Thanks so very much! It is tricky! I think the best thing to do is try different formulas and find what works for your particular situation. I’m sure what I’m doing now will change and evolve over time!
Very interesting! I’m curious to know what formula you decided to use now based on your hours of labor.
Thanks so much! Now I just assign a dollar amount for each hour and multiply it by the number of hours it takes me to make the item. For example if I decide that $10/hr x 8 hours to make a pig = $80. I don’t add materials or any other costs, just straight pay myself by the hour.
Thanks so much for sharing your perspectives on this! I have found the process for pricing my cakes to look a lot like what you’ve been working through (and still refining!). This can be tough when you come out with a price that “seems high” if you’re comparing your work to something you can buy in a store that’s mass produced but I have to remind myself (and sometimes customers) that there’s a big difference from start to finish in custom made art and what you can get at WalMart 🙂
Yes! I listened to a podcast and the title was something like “You’re Not Walmart so Stop Acting Like It”. It was about pricing and was really helpful. If someone wants one-of-a-kind, I’m you’re girl, if you want cheap and mass produced, head to Walmart!