Preparing for Craft Shows #2: What should the price tag read?

When it comes to pricing your handcrafted items, the million dollar question is "How much should I charge?" 

What does "Pricing it Right" Mean?

As creative people, this might be an area where a lot of us struggle. We are consumed with self-doubt and self-worth as we place the price tags. We live with myths of our own creation. "OMG! Will anyone even buy it if it's priced so high?" "People like cheap stuff", "If it's cheap then I will sell more!", "Why would anyone pay $25, when they can buy something similar at Forever21 for $6"...

STOP UNDERPRICINGRemember that buying is an emotional decision. And you are NOT competing with China. You can't! So don't even try! People who care for the handmade label will come to you even if your items are priced higher than a factory made item that serves the same purpose. 

People don't go to Starbucks to buy "just coffee". They go there for the experience. They go there for the ambience. And they are willing to pay extra for that.

Focus on Quality and Uniqueness

As long as you keep your overall attention on quality, uniqueness and an enjoyable shopping experience, you are on the right track. Tout the Handmade label, and go ahead and price your item as high as you think it is worth. What's that, you ask?

And is there a formula?

Here's a rough pricing model that seems to work for a lot of artisans:
1. Hours spent x $7 (e.g. 0.5 h x $7 - $3.5)
2. Material cost (e.g. $5)
3. Hidden costs: Travel costs, Booth Cost, Electricity and other shared costs over the total number of items you are likely to sell (e.g. $2.5)

In my example, the cost so far is $11. To calculate the sale price, add a suitable profit margin. I am going with 50%, so that adds up to $22. This is your "Wholesale" price. 

Hours + Materials + Hidden costs + Profit = Base Price (or Wholesale Price)

You could sell 100 of these items and still make a profit. However, if you are selling directly in a craft bazaar or even on an online store like Etsy, I would double that to get the "Retail" price, which would be $44. (This is what a fancy retailer would display your item for in a shop window.)

There is a great article for Etsy sellers that talks about what to do if you think that the price of the item seems too high for the market. There is always scope for improvement in your method and line of production, the materials you source and how you source them (online or not).

And again, remember: DONT UNDERPRICE! It's just not worth it!!

Next time, we will look at even more aspects of selling in craft shows, so don't forget to Subscribe to this blog! Have a great week and I will see you soon!

In case you missed part #1 of this series, you can check it out here.

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#localbusiness #businesscard #business

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