The Sticky Business of Pricing Handmade by Mary Breen

I started offering my workshop for crafters called "The Art of Selling" last year, in large measure to address the question of appropriate pricing. There are those makers who would argue you can never charge adequately for handmade, so you might as well either give it away, or underprice. I don't agree.

Some items, such as handknit clothing, are very hard to sell for what they are worth. An adult sweater is a very time-consuming project, and the sad truth is that very few people can afford one. But children's handknits and accessories like hats and mittens are marketable, to the right people and with the right message. That message is about the quality and durability of handmade. The math stands up to inspection: a $50 hat that lasts 10 years is way better value than a $15 hat that lasts two. Handmade will never compete with Walmart, and there is no point even comparing.

I always ask artisans who are at a loss as to how to set prices to do this obvious but often overlooked exercise: decide how much you want to pay yourself per hour, count the hours, add in the materials and overhead costs (ink, paper, phone calls, internet...if you're not sure, just add 20%) and you'll arrive at what you should consider your wholesale price. Unless you are going to sell exclusively person-to-person, there will be mark-ups, whether it's the cost of a booth at a show, or the commission a retailer takes.

So, if your beautiful handmade whojeeflip takes 90 minutes to make and uses $12 in materials, you need to charge $34 to earn minimum wage. You should be paying yourself more than minimum wage, of course, but it's surprising how many people realize belatedly that they're making under $5/hour. Next, you need to consider whether this whojeeflip, gorgeous as it is, is worth roughly twice that to the consumer. If you don't think anyone will buy it for $68, then you have a few options: see if you can reduce either your time or your materials costs, consider modifying the design, or go back to the drawing board altogether. I made a charming felted reindeer ornament last year; the prototype took me 3 hours, and it was pretty clear I couldn't sell it for upwards of $75. But I kept making them, taking a few shortcuts and simply getting faster with practice, until I could make one in 15 minutes and sell it for $25.

If you underprice, you take several risks. One is that your product will be popular, and you will set yourself up to make virtually no money filling unmanageable orders. Another is that you will create a demand then piss off your customers when you have to jack your prices up. You can always mark down, but it's pretty difficult to mark up. Most importantly, when you underprice, you contribute to the undervaluing of handmade in general. It's like any labour... if somebody is willing to do a job for $10/hour, what compels an employer to pay a living wage? But if you join a union and nobody agrees to work for less than $20/hour, the work is valued at $20/hour.

I have occasionally turned down work that is too cheap. Sure, I might sell a bunch of whatever-it-is, but I'd be selling short the other artisans in the shop, and myself.

Mary Breen is the owner of Wise Daughters Craft Market in the Junction in Toronto. She also has a store on 100 mile finds. Mary also has a blog