New here! How do you price craft things you make?

[NoWomanNoCry]

Just wanted to say hello, Im new here and I been a crafter since I was a kid ...always trying to make things...my friends were watching cartoons while I would be watching HGTV channel when they actually showed craft shows..or Id watch TLC when they would show craft shows! lol

 I do have a question for you all, I hope you could give me some advice...

I made these party favors for a party few weeks ago and they were a big hit with the people that attended. Since then I have got a few emails from people wanting me to make some for their events..thing is I dont make these to sale..and I wasn't doing this to start selling so it caught me off guard, but im thinking the extra money would be good. My question is....

do you get the people to buy the supplies? or buy them yourself?

How do you charge for your time?

Any other advice would be great. thanks

[Feast Your Eyes]

Well, I make jewelry, and this is what I did. I downloaded Open Office and use their Excel-type program to set up a simple spreadsheet. I listed each type of material I might need at the top of the column and the unit cost below it. At the end I listed an item for my time and gave myself a fair wage per hour. In the rows below I listed each project and how many units of each material I used and the time it took. Each row has a formula that multiplies the unit by the unit price and adds it to the next then adds my wage multiplied by my time, giving me the cost of the project. Sometimes I adjust this based on the going rate of similar items as seen on Etsy or Ebay or even other seller's websites. You should also take into consideration any added expenses you might have, such as time and gas if you have to deliver, or shipping costs if you must mail them.

[Chris in VT]

Or you can keep it simple by just tripling the retail cost of your supplies.

That's what a majority of people just starting out do. You buy the material you need for all the pieces, break down the cost per piece, and then triple that cost. If you decide to do more of them, you find a way to lower the cost of your raw materials, while keeping the selling price the same. Thus increasing profit.

I have never charged an hourly rate for my time and I do this for a living. My selling price, minus my costs, is my profit.

[Feast Your Eyes]

I think it depends on if your craft is very time intensive or if the materials are more costly. Sometimes I use very simple materials but very time-intensive methods, such as peyote stitch cuff bracelets were each individual seed bead must be applied individually. Seed beads can be very inexpensive, so if I didn't charge for my time, it wouldn't be worth doing. My method is simple for me. I only had to set it up once, and I don't have to guess and stress.

There are several methods for determining your price. You just need to figure out what works for you and pays you enough to be worth your time and effort.

[AshtonagoL]

I generally double or triple the cost of my materials as a starting point and adjust from there.  I'm really only selling locally so I have to consider my local market.  Ppl in my area aren't going to pay $60 for a diaper bag unless it's in a boutique shop or something.  But a diaper bag usually costs me probably $30-35 to make.  So I have to decide if I want to sell one for $40-45 and profit very little for my time or if I want to try to charge $60 and not get any sales.  For me it depends on how much I enjoy making the item.  I love sewing so if I don't make a ton per item I'm ok with that.  Now, I also make clay beads and don't enjoy that a ton so I make sure to make enough profit on those items to make it worth the work.  As far as getting the supplies yourself or having your customer get them, I'd imagine most ppl are going to ask you to get all of the supplies unless they already have them on hand.  But you could set a price for doing it either way.  Good luck!

[Chris in VT]

Let's discuss charging for your time.

I've seen many, many people who claim to do this.  But are you really?

Let's break things down.

You're ordering material. Either on the phone or online. Are you recording every minute?
You go to the store for supplies. Are you recording every minute from the time you leave home until you return?
Unpacking the UPS order. Receiving clerk. Record every minute.

Sitting down to work. Naturally you're paying yourself there. But what if you're sitting in front of the TV at night and just catching up on stuff you need to make? Charging for your time?

Taking photos for Etsy or whomever. Upgrading your online store if you have one. Or your website. Are you recording every minute?

Packing an order and taking it down to the shipper. Recording your time?

What if you do shows? The time spent packing the truck, driving to the show, setting up, selling for one, two, or three days, packing everything back up, and driving home. Recording your time?

If you worked for someone, you would make sure you recorded every minute you spent on the job to ensure you were paid properly.

I have yet to meet anyone who does this for themselves. 99% will charge just for the time spent actually making the product, not realizing that's only half the time spent.
Everything mentioned above must be included in your hourly wage and must be included in your pricing.  Otherwise, why bother?

[AuntJudy]

Well, honestly nobody ever paid me for the time it took me to drive to their office and back home at the end of the day.  Wish they did!!  When I do shows I don't figure in the time to load/unload the van and set-up/break-down my space.  That's part of the cost of doing business.   And no I don't account for every minute of going to the store for supplies or making an internet purchase, can't imagine anybody keeps track of their time that carefully.  But while I have paint drying I can make an internet purchase or run to the store, so it all fits in together so long as you don't waste time.   

[Chris in VT]

Put yourself in an employee's position. If the boss tells you to go to the supplier to pick up supplies, wouldn't you want to be paid for that while the paint is drying?

If your employer tells you to go to a trade show for 3 days, you'll do it for free and not expect to be compensated?

If you take some work home with you, and do it in front of the TV, wouldn't you expect to get paid? Or would you do that for free? If so, you can come work for me and I'll give all your work to you so you can do it at home in front of that TV.

Your "costs" are your rent, electricity, phone, internet connection, taxes, etc. Not time spent actually working.

Your argument is the exact reason I have never charged for my time. because it doesn't work.

[AuntJudy]

When I was an employee and the boss asked me to go to the store for supplies I did it while I was "on the clock" so I was paid for the time, when I went to events outside of the office I was paid for my time.   It's been my experience in a small company there's usually a big difference between employees and the owner and while the employees get paid for their time or otherwise compensated, the owner doesn't always (my parents owned a small business as did my grandparents and in-laws).  Just a fact of life. 

Sounds like you already have your plan on how you want to figure your costs/wage/amount to charge so there's really no argument.  If you try to account for every single minute and figure it all in, you may just price yourself too high.  But again, everyone has their own system and has to find one that works for them.    Same thing goes for bookkeeping and inventory tracking.

[Chris in VT]

"...It's been my experience in a small company there's usually a big difference between employees and the owner and while the employees get paid for their time or otherwise compensated, the owner doesn't always (my parents owned a small business as did my grandparents and in-laws).  Just a fact of life..." 

This is exactly my point.
When I see people charge by the hour to make a craft, you either have to charge for every hour you spend, or you're not arriving at a true price.
When you own the business, you don't charge an hourly rate for yourself. I don't believe your parents did, right?
It's a different story for a plumber or electrician, but not a crafter,

I currently have a product that sells for $5.95. It costs all of 6 cents to make and I can make literally hundreds per day. If I charged by the hour I would be selling it for 15 cents. If I tripled my costs it would be selling for 18 cents.

Sometimes I'll work only two days to get ready for a show, and in the fall I'll work 12-16 hours a day getting ready for my schedule of shows every weekend from Labor Day weekend until the second weekend in December.

The basic rule of small business is income minus expenses equals profit. And the owner of the company gets all the profits no matter how much time s/he spends on the job. That's been my business plan since I started in 1980.