If you’ve managed to transform your craft hobby into a blossoming business, congratulations!
It’s such a wonderful feeling when people want to buy what you’re making. However, it’s often tough to work out what to charge them. After all, aside from the supplies you use to make your crafts, how do you put a price on a labour of love?
What you do need to remember, is that you’re selling your crafts now; you’re not donating them or giving them as gifts. You’re a business, and every business needs to make money. That’s why we’re going to give you advice on the best way to make sure that you’re pricing your craft correctly.
But first, let’s have a look at exactly why it’s so important to get your pricing right.
Why It’s Important to Pay Attention to How You Price Your Craft
Yes, it’s about making money, but to do that in a sustainable way, there are several other aspects of business that you need to keep in mind. So, we’re going to go through them, starting with profitability and ending off with sustainability.
Running a business is all good and well, but it’s quite possible (and common) to appear successful but not turn a profit at all. In order to be properly profitable over a long period of time, it’s essential that you focus on your financials and, most importantly, the price of your craft.
That is, are you producing it in such a way that you can still sell it at a competitive price? Especially if you’re spending hours creating something. Cost doesn’t only relate to material value, you need to consider how long you’re putting into making your product too.
Careful and smart pricing of your craft will dictate your position in your market—where you stand in terms of competitiveness and relevance. If you don’t get your pricing right, your business’s positioning in the market is going to be poor, and you’re going to struggle to do well.
Perceived Value and Quality of Your Craft
Remember, the price of your craft dictates not only how much money you’re going to make per unit, but also how much you think your craft is worth. If you make it too expensive, it’s likely that you’ll alienate a large number of customers. If you make it too cheap, they may think that means the quality is poor, so they may avoid it altogether. There’s a fine line between too cheap and too expensive. Decide for yourself, as honestly as possible, the quality of your craft, and ensure that the price you choose reflects that accurately.
The price you choose for your craft is something that’s going to be important for as long as your business is running from home, from an office or even a warehouse! If you make it too cheap, you may sell a lot in the short run, but you won’t make enough money to cover costs and grow your business. You won’t set yourself up for a long-term future, even though your business may seem profitable at first.
If it’s too expensive, you’re unlikely to have repeat customers—if you get any at all! It’s important that whatever decisions you make, you bear in mind that they need to align with your vision of the future.
Along the same lines of sustainability, your pricing needs to ensure that your business can not only keep going at the same level it already is. But it needs to allow room for growth and expansion.
Pricing always needs to be competitive because if it’s not, competing brands are just going to lap up all the business, and you’ll be left with nothing. You don’t need to cost your products drastically lower than what they’re offering, but if you’re way higher, customers are unlikely to even consider you.
Tops Tips for Pricing Your Craft to Make a Profit
Now that you know how important it is to get pricing right, we’re going to give you some top tips to do just that.
Do A Cost Analysis
This ought to go without saying, but before you come up with a price for your craft, you need to carefully analyse your costs—from materials to labour and anything else involved—before you decide how much to sell it for. You need to cover costs and make a bit extra.
Conduct Market Research
Before setting prices, always make sure you check out what other similar businesses are selling their products and services for. In doing so, you can check if you’re in the same range as them.
Create A Pricing Strategy
Your pricing should be based on costs and whatever else competitors are selling their craft for. But on top of that, you should also have a long-term pricing strategy that includes contingency plans if the situation were to change. You can do a basic forecast that considers potential price hikes of the materials you use, whether to create your crafts or to package them. This will help you to develop a long-term plan that covers inflation and other financial hiccups.
Focus On Efficient Production
Making money is all about efficiency. So, when you’re producing your product, it goes without saying that you ought to be doing so efficiently in order to keep costs low. If your production process isn’t efficient and cost-effective, reassess it and see where you change the way you create your product to streamline your output. It may be as simple as investing in new equipment or shaking up your workspace or workflow.
Consider Marketing and Promotion
If you’re proud of your product, you want people to know about it. You need to factor in marketing and promotion to your pricing and ensure you have enough in your budget to get the word out, even if it’s just by boosting your business Facebook posts.
A Crafty Way To Make Money
If you know how to calculate profit margin and sell your crafts at the right price, you can easily grow your side hustle into a fully fledged business. Don’t be afraid to charge what you’re worth, but be mindful of over-pricing your goods and always ensure you’re competitive.
If you strike the right balance, you can grow your business and enjoy reaping the rewards of crafting for a living. Now that’s what we call the creative’s dream!
Luciana joined our team as a mum blogger in 2020. A dedicated mum to a lively daughter and a dog, Luna, Luciana brings authenticity and passion to every post. Her expertise in parenting and lifestyle topics offers practical, relatable advice for real-life situations.