Pricing as a Science

Craft pricing properly done maximizes your income without driving away potential customers. This and cost controls are the keys to

Setting, let alone, maximizing your craft’s price is a little more complicated than it first seems. The obvious price is as much as a willing buyer is ready to pay. But how do you arrive at that figure. Craft pricing has often been left more to gut feeling than to rigorous analysis.

What the Market Will Bear

Knowing the easily-quantifiable costs on the one end, you need to consider, on the other end, what the market will bear. You need to charge as much as you can to cover all the unknown or unanticipated costs, as well as to maximize your bottom line profit. This is the essence of proper craft pricing.

In order to sell your goods at a reasonable profit, you need to determine the maximal price. "Maximal" is defined as "the greatest or highest possible".

Make Your Price Sell

If you are nervous about putting prices on your handcrafted items or think you have a tendency to under-price your work (most home crafters do!), a unique source to consider is Make Your Price Sell. This is one of the few tools available to help you set your maximal price in a systematic way.

In addition to the manual, you are led step by step through a web based survey process that results in a clear picture of what you should charge.

You now will be sure your craft pricing is optimal. There really is not anything else like this out there. There is a demo tour of the program for you to inspect.

Pricing Your Artwork

Another craft pricing resource to consider is The Basic Guide to Pricing Your Craftwork. While not as complex or exact as Make Your Price Sell, it is also less expensive and should satisfy the needs of a beginner to craft pricing.

Craft pricing should be a science not an art. The profitability of your home business rests on it. Become a craft pricing pro!

Don’t Forget the Unanticipated

I got comfortable charging the most that I could for my crafts when painful experience showed me there would be costs I hadn’t anticipated - the very expensive ink that sprayed all over the room (and me!) when I was trying to refill a cartridge - the products I had to recall and replace when I determined the chemical used to fix the ink to the fabric had gone bad.

The space between your costs and your price is not only your profit; it is also your wiggle room for when things go wrong, as they certainly will from time to time.

The Golden Rule of craft pricing is: Charge the most the market will bear and you will still make less than you anticipated. Set your expectations - and prices - accordingly.

Pricing Research

Ask yourself, "What is the market willing to pay for my unique crafts?" Uh-oh, more market research, right? Don’t be discouraged. You’ve already laid the groundwork.

When you were showing your craft products to friends and retailers for feedback you asked them how much they would expect to pay for the item, right? Now you want to expand on that basic data. Go window shopping! Go window shopping wherever you think your type of product could possibly be sold: local retail shops, catalogs and/or the Internet.

Be sure to consider the relative raw materials employed. If you see a beaded bracelet similar to one of yours, but using semi-precious stones, where yours is made with glass beads, adjust your craft's price down. Or vice versa.

If Wal-Mart sells a mass produced version of your craft, made in China, don’t be discouraged. Know you have a competitor. Make your product obviously better, but keep the competition in mind when you set your pricing strategy.

This is a complex subject. You want to maximize your profits, but you don’t want to drive your customers away. If you are not yet comfortable with how to determine the "right" way to approach craft pricing, please check out the program I recommended at the start of this article.

Determine Your Maximal Price

Maximal craft pricing is so critical to the success of your home business venture that the investment in Make Your Price Sell will quickly pay for itself many times over. But it requires some work to have this program produce a valid result.

It’s really up to you whether you want to expend the effort. However, if you do, you can be sure you are getting the most for your craft that you can.

It will take just a few minutes to go through the demo tour.

Let me leave you with one more thought on pricing: if your initial price turns out to be too high (i.e., more than the market will bear), you can easily lower it. However, the reverse is much harder to do.

Perceived Value

Some crafters hold the firm belief that higher prices lead to more sales. They believe that the higher price creates a greater perceived value in the minds of buyers.

For example you can set the price of a beaded necklace at $9.95 and buyers may think that it is merely a piece of junk jewelry. However the same piece priced at $19.95 or even $29.95 creates a sense that you have added something extra to your work, be it the quality of materials or your design capabilities.

Read my review of The Ultimate Guide to Jewelry Booth Success. The author, Rena Klingenberg, is a successful jewelry crafter, as well as a webmaster and contributor to this site. As I say in that article her ideas about pricing and perceived value are worth the price of the book.