What to charge?

[MichelleMermaid]

Hi everyone,

I'm wondering if you can give some advice for how to charge for your work. I've had several requests to sell my Christmas ornaments so people can give them as gifts, but I really don't know what price to put on my work.

I've sold things in the past and my experience is it is nearly impossible to be paid for your time. I spend hours on each ornament and use expensive supplies, but will people really be willing to pay accordingly?

I have pictures on my page of some of the ornaments I've made. Perhaps you all can give me some suggestions. How do you all charge for your work?

Thanks!

[Judy B]

If people are not willing to pay accordingly, don't sell yourself short!

I always worked out the cost, added a bit or a lot depending on whether it was a simple or complex item, and rounded up, then doubled it. The doubling up is, in theory, the profit, but it is often diminished by hidden costs. Don't forget to guess how much thread you used, factor in needles, packaging and tags, handling, time spent working (I actually wrote worrying but corrected/changed it!) on design, researching safety regulations and labelling requirements, power and lighting, cost of shopping (not just cost of materials), wastage......etc.

Getting all this information together sounds daunting, but is worth doing early and setting a standard for yourself, rather than try to lift your standards later when you have some established customers.

[Unique Christening Gowns]

I am with Judy. You need to follow those steps.
Having said that, I work out the cost of the fabric and laces plus 20% on top for the waste ,power etc. Than the nr of hours it takes me to make an item X 150% of the hourly rate. 50% will cover the website hosting, advertising etc. Hope I explained it properly :)

[MichelleMermaid]

Hi Ladies,

Thanks for your input. I need to put some thought into this, obviously. I figure I easily have $5-$7 in materials for each ornament. Time has got to be at least 3 hours (I'm probably slow). It's hard to think about charging so much, but I'll keep pondering.

Thanks again!

[Carmen]

I usually figure out what the materials cost and double that amount. I also take into consideration how much time it takes to make it if I already have the materials. Ask a couple of friends, family members what they might pay for an item.
Dreaming Quilts : ) Carmen

[Elizabeth]

Do NOT undercharge and undercut yourself. It's very tempting, as we tend to think, 'No-one's going to pay that much for something like this', but they probably will if they're in the market for handmade things. Those who undersell their handmade items can spoil it for others who are needing to charge a reasonable and fair price for their stuff.

Materials/expenses+labour+profit = retail price. You could also look on Etsy or other places (not Ebay though), for how much folk are charging and what sort of stuff sells for how much.

[Tansy]

I posted my own question(s) about this on a different forum a while back, because I'd run into problems with the usual methods for figuring prices. Maybe people here on Stitchin' Fingers can help, because the reply I got on that other forum was less than helpful. Here's what I posted:

My philosophy on the selling of one's crafts/art is that it is better to give these things away as gifts to those who appreciate what they are given (friends who know how much work and skill you put into it) than to sell it too cheaply to someone who says "that ain't worth no ten bucks" and makes you feel guilty until you agree with them.

Anyway, here's my problem:

If I make something that isn't a gift for a close friend, I would like to be able to sell it and make a reasonable (meaning "fair
compensation for the work involved") amount of money for doing it. However, I have yet to encounter any of those much-loved customers, the kind who understand and expect that handcrafted items will cost more than a "similar" item purchased at, say, Wal-Mart. If I make a dragon doll, for example, people seem to expect it to cost no more than a mass-manufactured teddy bear or whatever of the same size. I can't get the -materials- for that dragon for less than $6, and it takes about 12 hours to make, yet I'm supposed to sell it for $2...?

If I charged half a cent per stitch (cross stitch, always in 28-count, usually with cotton floss but sometimes with silk), most of my embroidered pieces would run more than $35 just for the embroidery itself. Then add the cost of materials and such, which admittedly isn't much compared to the time involved... If I did what many people have suggested to me in the past and simply charge twice the cost of materials without adding anything for the time, then something like my "belt of 50,000 stitches" would only go for about $20, and I am NOT willing to put that price on anything that took me
over 150 hours to make. (Yes, it took that long, and I'm not slow. The exact count on the embroidery stitches is 49,292 at 784 stitches per square inch.) If I'd made that belt with silk floss on linen fabric instead of cotton on cotton (not that ground fabric matters much when it's completely covered by the embroidery), "materials times 2" would go up to about $60. Still doesn't seem fair for the work involved.

One person on that forum had mentioned that she charged half a cent (US currency) per stitch for the commissioned embroidery that she did, adding that some of those pieces had as many as 500 stitches 'so it all adds up quick.' It's one thing to ask someone to pay $2.50 for an item that's smaller than 3 square inches and another to ask them to pay $250 or more for an item that's still only 63 square inches. And if I figured time plus materials - and generously allowed myself to make at least minimum wage - that would end up close to a thousand dollars for that 63-inch (49,292-stitch) item! That's getting a bit ridiculous, isn't it?

So... Anyone have suggestions? What am I doing wrong (other than being entirely too prideful about my needlework - I already know that), and what can I do to fix it? Is Etsy better than Ebay for selling dolls and embroidered items and such? (I've not tried either one, but I've seen friends have total non-success with Ebay again and again despite them doing everything "right" according to the usual Ebay advice.)

All advice much appreciated.

The reply I got on the other forum was basically 'No one will pay more than $20 for a belt' (I did show a photo of said belt - it's part of a fancy medieval costume, not a hold-up-your-jeans kind of belt) and that maybe I should just get myself a sign that says "Will sew for food." This from a fellow needlework craftsy person... *sigh*

I agree with Elisabeth on this forum - DON'T look to Ebay for how much you should charge. Ebay, in my opinion, is as much a cause of the 'Wal-Mart mentality' (the 'I can get something sort of like that but lesser quality at Wal-Mart for a lot less, so why should I have to pay more for something handmade and special?' attitude) as Wal-Mart and stores like it are.

It isn't really about the money for me. I'm just so very tired of hearing "it's just sewing - not like it's a skill or anything" from various people.

Anyway. What I have charged for my work in the past:

I think I've got a photo of my "Sherlock" dragon up here. I was paid $120 for him. In fact, I was offered that much for him - twice what I'd have settled for at the time. And the fact that he was purchased by a charity group to give away as the prize in a fundraiser they were hosting was nice... (They were holding a "murder mystery dinner party," with the dragon dressed like Sherlock Holmes given to the person who solved the mystery first. The dragon was so popular that they asked me to make 2 more in following years.) But this critter is 19 inches tall, entirely hand-sewn including his clothes (the dragon itself I'd already created a pattern for - he's the same design as "Molly" - but I had to make new patterns for his coat and hat), and the fabrics to make him weren't cheap. I think I made about $50 profit on a doll that took far more than 10 hours to make. And that's my "success story."

The little serpentine dragons that I also used to make (no photo available on Stitchin' Fingers) usually went for $25 when I managed to sell one at all - those are the ones that took $6 in materials and 12 hours in time.

What is a reasonable hourly rate for hand sewing or embroidery, anyway? I've tried to find out, and the usual answer is "whatever people will pay for it."

[Judy B]

Tansy,
The answer to how much to charge for hand work is how much you are prepared to sell it for, not what people are willing to pay.

How much do you need to get for an item for it to give you at least a basic wage for the time you spend on it?

Initially I used the basic cost doubled, round it up a bit formula, but as more and more people wanted my work I kept putting up the price. Unfortunately, we have to prove our worth, get some fans or followers or patrons, before we can ask a fairer price, and get it without haggling. I gave items which didn't sell to charity, to family and friends, never sold it below my asking price. Missed a few sales for a while, but people got to know they weren't going to get a late bargain from me at craft fairs, so came and chose what they wanted early.

There is some merit for counting the stitches, or measuring the length of thread used in hand work as we all work at different paces. Skill level and quality of work is harder to measure, and choice of colour and materials has to be appealing, ..... how do we put a price on the experience we need to make the right choices? My cynical view is that we need a good publicist. We never have the confidence to sell ourselves and our work well, we need someone out there to tell the world how good we are! People will pay a fortune for a painting by an elelphant because someone has given it a good review!

The thing to remember when pricing your work is that your market is not the people who shop in the $2 shop, but those who value their money and so value what they spend it on, or people in a family with two high incomes and an appreciation of work they have no time to do. The next problem is finding the marketplace to reach those people with the good taste to appreciate quality as well as the disposable income to buy it. Comes back to that publicist again!

I have read on several blogs that people are selling work on Ebay for less than cost, but as I understand it you set the starting price. If you set it below cost price and nobody wants what you are offering you have to sell, so it is an act of stupidity to set such a low price. (I didn't look at the quality of the items produced by the blog writers, but obviously they didn't value their work very much.) I don't know how Etsy works either, but all items I have seen destined for Etsy sale are small inexpensive items, and don't know what sort of people buy on Etsy either.

I have made the decision not to make and sell any more, but am aiming at selling patterns in the future, and the prices I want are a bit above the average, but I think my patterns are worth it. (Some of the patterns have a lot more pages than a lot out there.) All I have to do is write more, and work out how to sell them!

Sounds easy...............

[Ruth Lane]

I agree with Judy. It appears you are trying to sell to the wrong market. I own a fine craft gallery and sell only handcrafted items from US and Canada. I have heard so many price comments from the average "Wal-Mart" shopper that it drives me crazy sometimes. I do try to educate these people but it is very frustrating. But I also have many customers who appreciate the craftsmanship and effort put into handcrafted items.

You need to charge for your time, your supplies, your overhead plus your profit and then double that to get your retail price. It is very hard starting out as many people don't appreciate needlework as an art form. You have to get your products in the right location to sell though. I would try more high end craft galleries, museum shops etc. and try and get your work in those types of locations. You have to be persistent and find the market that works best for your work. I don't think ETSY and E-bay would be appropriate. I cringe when I see the prices that some people are willing to sell their work. It just makes it harder for the rest of us to get a fair price.

[Melinda]

While my embroidery is nowehere near good enough to sell, I am a marketing major in my final semester (yay!) and I've done some work with other small businesses trying to get their products off the ground. So maybe I can help...
One of first rules in pricing, perhaps even the golden rule, is to always always always set your initial price higher than you think it should be. It is always easier to lower your price than to raise it. If you set your initial price too low and get many customers and then try to raise it, you risk alienating your existing customer base and losing repeat business. It costs five times more to get a new customer than it does to keep an existing customer.
Secondly, but no less important, is to figure out what type of customer you are selling too. Perhaps it someone fashion forward who wants one of a kind pieces, or a new mom looking for a personlized piece for their child, or, as Judy B said, someone who appreciates the work they have no time to do. You must know who you are selling to, and then cater your product feature to appeal to their desires.
With that in mind, there are many different methods to setting pricing products, but I will just give you the basics.
First, there is the competitive method. This is a pretty simple method, and can work well for most categories of products. Basiclly, you do loads of research and find products that are similar or the same as yours. Then you set the price of your products based on what your competitors are offering. This method works particularly well for items that are already popular and that consumers are already familar with. But be careful, because using the method means you are always on the defensive and always reacting to what your competitors do. And what is best for your competitors business is not always best for yours.
Another method, and in my opinion, the most effective method, is called the value based method. Basiclly, this method looks at the value the customer recieves from your product and the sets prices according to that. Customers do not buy a product because they want the product itself, but because of what the product will give them. People do not buy drill bits because they want drill bits, but because they want holes. To relate that to handmade items, perhaps what you are selling will become a family heirloom, or perhaps your customer is looking for a one-of-a-kind piece. Perhaps they are buying a personalized baby blanket that a child will sleep with for years to come. Once you have decided on the value your customer will recieve from your product, you must decided how much your customer is willing to give up to recieve this value. A good way to go about this is to ask third parties what they would use your product for, and what they like best about it, and what they think makes it special. You can try to ask them what they would be willing to pay for it, but they will often give an exorbidantly high number so as not to hurt your feelings, or will just guess a number because they really don't know. Although at first is can be somewhat of a guessing game, eventually an equilibrium will develop where your customers will be willing to pay what you are willing to accept. It can be hard, but this type, and other effective forms of pricing and marketing, must be done with the customer in mind.
On a final note, although we each understand how much time and energy, as well as the years of experience, went into making our products, the customer does not know that, and they will not know that unless you tell them. Pricing is part of the overall marketing plan. Focus on what makes your product special and the value your customers will recieve from your product, and then tell it to your customers. Customers will pay more if they understand what they are recieving.
Well, I've tried not to sound like a textbook, and I hope I have succeeded. This is all general advice that works for many products, but can be very specialized. If anyone would like any personalized advice, or a bit of a "consulting session" as Juby B was saying, please don't hesistate to ask me and I would be glad to help.

[Elizabeth]

What an interesting, and useful, thread this has become! Thanks to both the starter and all the others who've joined in!=)

I too am hoping to do some selling of handmade items and have come to similar conclusions to many of the above comments. We have an annual 'Staff Festival' in early September before the students come back at the Uni I work at and I can get a free stall there and try to sell. The others there are doing something very similar and few, if any, are selling for the fun of it! One lady said there that she 'wouldn't get out of bed for minimum wage', so she makes sure that she prices her handmade leather bags so as to give herself a fair wage.

My idea is to make small, quick and inexpensive items that everyone can afford, (such as bookmarks and greetings cards, both in papercraft and with small silk painted and/or stitched pieces in), and also some more upmarket things that, basically, target the senior staff members who'll be looking for fancy goods for wive's, mothers' and daughters' birthday gifts etc. I got a lot of my materials for small purses at a very good rate whilst in Taiwan, but it was hardly cheap to get there and 'materials personally sourced in the Far East' has an appealing ring to it, no?=)

Let's all report back as to how we get on and hope that the economic downturn we're all labouring through at the mo doesn't cripple our ambitions too much. After all, people these days are more concerned about paying the mortgage and feeding their families than buying them luxuries.=( But that goes for us too, so sometimes we need to prey on the 'have's to stop ourselves becoming 'have not's.

Re E-bay and Etsy. If my own experience as a buyer is anything to go by, I simply do NOT go on E-bay to pay full price. I'm going there for bargains and cheap deals. Etsy (and the new Folksy in the UK) seems to be a different proposition with people selling both cheaply and at more realistic prices. If someone is selling cheaply, I think that they're either doing it for the pure joy of it or that their stuff isn't top quality.

[Judy B]

Elizabeth,
Your idea to make some inexpensive lines is good, because in a craft fair situation it looks good to have a steady stream of customers, and if you keep people coming and buying, every so often you get someone who has the money to buy the more expensive items.

And people who sell cheaply put themselves down, along with everyone else who wants to sell hand made stuff.

Even with a lot of people loosing jobs and struggling to pay the bills and feed families, remember that most people still have jobs and incomes much as they did two or three years ago before the finacial crisis. Some of them even own their own homes. And those people can still buy some luxuries, even if their budget is a little tighter than it was a few years ago.

[Elizabeth]

Nice thoughts Judy, thanks!=) I have so many ideas for this stall, if I don't write them all down, I'll forget something!!! I hope to price my stuff between £2.50 for papercrafted cards through £15-50 for mini purses from oriental fabrics and small silk bags with a little motif embroidered on them right through to £100+ for embroideries. Not sure I'll do many of the latter, maybe just one 'large' one and a few small pieces. Look me up in September!!=)