One of the hardest things about having a handmade business is proving your worth. In a world full of people trying to be the next best thing, we still have a bunch of people trying to under sell their competition just to say they received X number of orders per year. You can’t simply go by the number of orders to determine if you are successful or not. Unless that’s all you care about. I would be willing to bet, however, that you also want to support your family or take a vacation, or save for retirement…and the list goes on.
Much of what you do in your handmade business will come down to pricing so let’s take a look at this. I will use a vinyl decal as an example. You can replace the word “decal” with any word that resonates with you and what you are creating.
Some things to consider when pricing –
(1) Do you want this to be a legitimate business for you and a way to help support your family?
(2) Do you want to work 40 hours a week or 20 so you can spend more time with your family?
(3) Do you currently work a full-time job as well?
(4) If you work a full-time job is your goal to quit that job?
(5) Do you want people to look at you/your biz as a legitimate biz that cares for their customers?
I have a lot more questions you could consider, but let’s start here.
(1) If you want this to be a legit biz you need to price your stuff competitively- not too high and not too low. If too high people think you are full of yourself or taking advantage. If you undercharge you risk people thinking your items are sub-par to the ones selling for more. I get it…you want to stand out, but what you are doing is overworking yourself for no reason. Yes, you may get a lot of orders, but take into consideration every single little thing that goes into making, for example, a decal (time away from family and friends, your time to design it, show a proof to the customer, the cost of the vinyl AS WELL AS how much it cost to ship it to you, the cost of your machine, the blades, weeding, writing a thank you note to include in your package, packing it up, mailing it, etc). As mentioned above – don’t sell yourself short.
(2) If you are working 40 hours a week you need to make what you should make for working 40 hours a week. Let’s just say you were working for someone else doing this exact job – as in you were hired by a company to design a decal and do all the things I mentioned in #1. How much per hour would you expect to make?? I bet it’s not $5.00. So, then, why would you charge $5.00 an hour for something?
(3) If you are working a full-time job AND doing this you are spending even more time away from family. How much is your family worth to you? Is it really worth only a couple of dollars?
(4) If your goal is to quit your full-time job you need to make more money in order to do that. Let’s just say you make $20,000/year. How many decals at $5.00 do you need to sell to make $20,000 AND actually make that? You can’t just say I need to sell 4,000 decals at $5.00 because that doesn’t take into consideration what all your costs are (blades, vinyl, the list we talked about before). So, you probably need to sell at least 8,000 to cover your salary. When you think of it that way does it make more sense to charge more?
(5) Of course you want people to look at you and your biz as legit or you probably wouldn’t be doing it. So that means you need to go the extra mile. Sure, there is a chance your decal will get there just fine in a regular envelope, but it doesn’t show the care and effort you actually put into creating the decal in the first place. I’m not saying that to be mean, but you would want a decal sent to you in a firmer envelope to make sure it doesn’t get bent. You can use cardboard envelopes and as long as they don’t go over 3 ounces it’s $1.93 via PayPal shipping. I’ve owned a brick and mortar shop in the past and now my business. I tell you all this from the experience of failure. And, if I can help one person NOT fail…well, it’s worth the “tough love” and “hard truths”.
No matter what your reason for crafting and selling your items…don’t ever sell yourself short. Be confident in what you are making, your prices, and everything about you and your business! Don’t compare yourself to others, as we all have our own unique situations. And, remember to be humble and help others succeed. We all started at the beginning, and learned from others – don’t be afraid to share your knowledge (even with your competition) you never know when you will need that person to be in your corner!