You spend hours making something, finally finish it, and feel pretty good about it.
Then somebody — in my case, usually my husband — asks, “How much are you selling that one for?”
Oh.
You'd think I'd have figured that out before making it.
Pricing has been one of the harder parts of running a handmade business because there isn't a little label attached to your finished product telling you what it's worth. You have to decide that yourself — and somehow account for your materials, your time, your other business expenses, what customers are willing to pay, and the fact that you're supposed to actually make money at the end of all this.
I don't think there's one perfect formula for pricing handmade products, but there are a few things I've learned to look at before putting a price tag on something.
Start with what it actually costs you to make
Fabric is an obvious cost for me, but it isn't the only one.
There's interfacing, zippers, hardware, thread, labels, packaging, and all the other little pieces that go into making a finished product. Some are easy to calculate. Others cost so little individually that it's tempting to pretend they don't exist.
They still exist.
Then there are expenses that aren't physically inside the finished product at all: equipment, website fees, market fees, payment processing, shipping supplies, and all the other costs involved in having a business.
You don't necessarily need to assign every penny of your electricity bill to a particular bag, but you do need to know that selling something for more than the cost of its materials doesn't automatically mean you're making a profit.
Don't forget that your time costs money
This is the big one for me.
Materials aren't necessarily the most expensive part of something I make. Often, it's the amount of time it takes me to make it.
And “time” doesn't begin when the needle hits the fabric and end when I clip the last thread. There's cutting, interfacing, pressing, changing thread, installing hardware, finishing details, and all the little steps in between.
That's before we get into photographing the product, writing the listing, packing an order, or standing at a market selling it.
It's very easy with handmade work to look at $10 worth of materials and think, Well, if I sell this for $25, I'm making $15.
You're not. Not if it took you two hours to make.
Look at the market — but don't let it set your price for you
It is useful to know what other people are charging for similar products.
It gives you context. If your price is dramatically different from everything else a customer is seeing, it's worth understanding why.
But another business's price doesn't tell you what your price should be.
They may buy materials at a different cost, make things faster, manufacture at a larger scale, have completely different overhead, or simply be underpricing their own work.
And handmade products aren't always directly comparable anyway. Two bags can serve the same purpose while being made with different materials, construction methods, features, and amounts of labor.
Research gives you information. It doesn't get the final vote.
Make sure the price works for your business
This sounds obvious, but a price has to do more than convince someone to buy something.
It has to make sense for you to keep making it.
I've had products where I eventually realized the time involved didn't make sense at the price I was charging. At that point, something has to change. Maybe the price goes up. Maybe I find a more efficient way to make it. Maybe I change the design.
Or maybe I decide I don't want to make that product anymore.
Selling a lot of something isn't particularly helpful if every sale leaves you wondering why you agreed to make another one.
Your price doesn't have to be for everyone
This might be the hardest part.
You can calculate your costs, account for your time, compare the market, and come up with a price that makes complete sense — and someone can still think it's too expensive.
That doesn't automatically mean the price is wrong.
People have different budgets and different ideas about what they're willing to spend. Handmade products are also competing with things made at a scale that a small business simply can't replicate.
Of course, if nobody is buying something, that's information worth paying attention to. Maybe the price needs another look. Maybe the product does. Maybe you're not explaining its value well enough.
But lowering a price until nobody can object to it isn't much of a pricing strategy.
Pricing gets easier — sort of
I wish I could say that after doing this long enough, I now look at every new product and immediately know exactly what it should cost.
I do not.
But I have a much better idea of what goes into my products than I did when I started. I know which things take longer than they look like they should. I know that a small piece of fabric doesn't necessarily mean a small amount of work. And I know that a price has to support the business making the product, not just cover the supplies sitting on my cutting table.
So when my husband asks, “How much are you selling that one for?” I still might not have an answer yet.
But at least now I know what I need to figure out before I give him one.
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