|How to Determine the Right Price Point for Handmade Crafts|
|Written by Iyna Bort Caruso|
Is the price right?
That’s the million-dollar question. Overvalue your work, and you can price yourself out of the market. Undercut your competition and you might jeopardize a mortgage payment.
Include Hidden Expenses
Brown said he factors in education, materials and cost-of-living expenses, and then averages them “to generate a basic projection of the monies needed to achieve my goals.” It’s helpful, he added, to have a “get-out-of-bed price,” meaning a minimum figure to even think about starting a commission.
Marcie Davis, a south Florida glass artist who produces instructional glassblowing videos and “Glasscaster,” the first hot glass podcast series, said newcomers have a “terrible time” with pricing because they’re afraid to ask for what they need. “If an artist or craftsperson wants to survive and thrive in the business, they must approach pricing from a businesslike perspective,” she said.
When Davis started working in stained glass more than 20 years ago, she mistakenly priced her work based only on the cost of the materials. Left out of her sales equation was all her labor—the cutting, grounding, foiling and soldering—not to mention all it took to keep a roof over her head.
Experts say artisans tend to err by underpricing their work, especially early in their careers. According to Davis, “There’s the common apologetic approach where artists are so uncomfortable putting a price on their efforts. It’s like selling yourself. You don’t want to be greedy. You don’t want to be rejected. It’s so hooked up in your personal self-worth that you can really get tangled up in the process.”
Davis bases her pricing on a simple formula: “A third, a third and a third. Your materials equal one-third, your labor is one-third and your profit is one-third. Or simply put, multiply your costs by three.”
“Poor pricing practices can be very dangerous to your sustainability,” Davis maintained. “If you lowball to get the sale or the commission, then you either go broke giving it your best efforts, or you’ve priced it so you can’t give your highest degree of service. Then you have to try like crazy to cut back in time and design and possibly quality to meet your agreed-upon price.”
Consider Your Location
“However, if there is a good tourism base that moves through a lower socioeconomic area, there may be some recourse there.”
Joan Blackwood of Weare, New Hampshire, makes one-of-a-kind collectible dolls sold on the Home Shopping Channel, as well as in galleries. Her client base is worldwide.
Despite years in the business, Blackwood conceded pricing is an art, not a science. “I basically look at the competition and then price accordingly. I have priced lower at times just to make sure it sells. I was warned in this business: Don’t price your work so high that it will eventually not sell.” The problem, she said, is her prices have gone up “very little over the past twenty years.”
Boost the Value
A little education goes a long way. Consumers often don’t know enough about a given medium to appreciate whether a craftsperson uses high-end materials. “They will almost certainly be unaware you spent twice as long on your piece by adding a time-consuming finishing technique and that the artist who created the next piece on the shelf did not,” explained Marcie Davis. Give would-be buyers information that differentiates your work from others. “If you use special materials or techniques, be sure to have a lovely little label or card that explains your work, materials and technique,” Davis continued. This will add value in the consumer’s mind.
Jill Berryman agreed. “I love to give gifts from artisans who include a brief bio about themselves and their work. It makes it much more personal, and the receiver of the gift knows that this is a one-of-a-kind piece, not something mass-produced overseas.”
Ask Your Customers
About the author: Iyna Bort Caruso is a New York-based writer who specializes in art, trends and business-related topics.