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Meet Your Market

An Introduction to Market Research for Crafters

First: You must know your market

Entrepreneurs often go wrong by misjudging the market, frequently by assuming that because they love a certain thing a lot, other people will as well. Just because you want to run a craft business, because you're an artisan, doesn't mean you can ignore the basics.

If you’ve developed something you consider a unique item people can’t live without, but you haven’t been able to sell it yet, beware. You could find yourself in a supply-push situation, meaning that you can only sell your product using a lot of hype and advertising. This would drive up your costs (think #2 of The Four M’s!) and be a distraction from what you love doing, i.e. crafting.

If, on the other hand, people are already beating a path to your door for your unique craft items, you are fortunate to be in a demand-pull situation. You already know there is demand for your product. You just don’t know how much.

Market Research

Either way, you need to do market research. Get product feedback from everyone you can think of – friends and family, strangers, retailers – and really listen!

Many crafters have invested so much of themselves in their work, that they don’t know how to accept criticism or suggestions. To get your craft business successfully off the ground, you have to listen carefully so that you'll have a much better idea what your market is.

If you want to profit from your craft, learn to think first of your customers’ tastes and needs. Also be sure to ask how much they would expect to pay for the item. You’ve gotten nowhere if you determine they “love” your item but would only pay 50 cents for it though it cost you $5 to make! Become totally customer-focused.

Market research is an on-going process. New product ideas get stale, competition comes in and the market gets saturated with a particular product. As your product line evolves and changes, never forget to do your market research. Know your market and go to meet it.

I suggest that you read Creating a Successful Craft Business

This book was written by a craftsman and his business partner. In addition to describing how to set up a successful home based craft business, the book contains many resources to help any crafter succeed. It puts you on the correct path to discovering your market.

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.

The Four M’s

Minimize Your Cost
In order to be profitable, you must keep your costs down. Here are some suggestions on how to do so.

More Ways to Minimize Your Costs
This answer to a reader’s letter contains more a advice on minimizing your costs.

Maximize Your Price
Ways to get to maximal price for your craft.

Market Your Craft
Ways to find buyers for your finished projects.

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