Pricing Your Crafts - Simplified
Sunday October 21, 2007
- Decide how much you (or your employee) will be paid per hour to produce products.
- Multiply this hourly rate by the number of hours a week that will be spent producing crafts.
- Write down this figure, this is your weekly cost of labor. (If you need to make $10 per hour, working 40 hours per week the weekly cost of labor would be $400.)
- Calculate the total cost-of-supplies needed to make one finished product.
- Determine how many products one person can produce in a week.
- Multiply the cost of supplies-per-piece by the number of products produced in a week. (If your cost of materials per piece is $1 and you can produce 100 products a week, the figure would be $100.) Add this figure to your weekly labor costs. (In our example here that would be $400 + $100 = $500)
- Divide this figure by the number of products produced in a week. (So $500 labor/materials divided by 100 finished products a week would be $5.00 per piece.)
- If you will be wholesaling your products, multiply this number by two. (Which would give you a retail price of $10 per product.) Compare this cost to similar products on the market.
- If your price is more than similar products, you may need to reduce it by cutting hourly price, finding less expensive supplies or by increasing your production time.
- If your price is significantly less than similar products, you may want to consider raising your price.
Comments
Hello Mr. Tasley,
If the cost of your product (labour + materials + fixed costs per unit) is $5 then your wholesale price would be $10 (price charged to retailer-depending on the mark up you want). The retailer will in turn likely charge $20+ to the end consumer. I just wanted to clarify to avoid confusion. I enjoy your column keep up the great work!