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In a nutshell: you need to do market research.
The For Profit section of this website walks you through the process step-by-step, while Maximizing Your Price addresses the craft pricing problem specifically.
Be sure to take the demo tour of Make Your Price Sell
This program turns craft pricing into a science.
Another great resource on pricing is The Basic Guide to Pricing Your Craftwork.
If you are having trouble setting a price, these resources will give you very specific help.
When you need a break from all the studying, go to the Craft Ideas section and read the cute story, For the Love of One's Craft: Crocheting.
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