How To Price My Handmade Goods

stamp_handmade1
Handmade

Some of you may already know, but I run a small gallery and gift shop in Whitley Bay.

The Gallery specialises in local handmade gifts and treats, and we encourage makers to bring in their items to try and sell them through us.

One thing we are always getting asked by crafters and artists alike is, “What should I charge for my work?”

This is a question I can’t possibly answer, as I don’t know the cost of your materials, or how long it took you to make, but here is a little help on the subject.

Know Your Cost Price. work out exactly how much the items actually took to make. How much were the raw materials? Free? lucky you, but did it cost you petrol money to pick it up? Did you use tools and electricity to make the item? All these add to cost price of your work.

What is your time worth? Next, think about how long the item took you to make. How much is your time worth? Have you just started crafting? Then you are at least worth minimum wage. Did you study art/design/textiles/production and have qualifications in the field you are creating in? Then your time is worth much more than minimum wage. Even without qualifications, if you are knowledgeable and experienced in your field, you should charge a much higher rate of pay than someone just starting out. I am forever hearing “I don’t charge for my time, I’m just knitting/creating whilst I watch TV in the evenings, this is just a hobby”. By not charging correctly for your time, you are de-valuing your craft, for both yourself and others.

Insurance and Tax. You may think of yourself as just a hobbyist, not charging for your time, and just doing the odd craft fair here and there, but if you sell what you make, you are classed as a business and must register at HMRC it’s incredibly easy to do it online, and nowhere near as scary as you might think.

And if you are selling to the public, you must also have public and product insurance. There are lots of insurance companies out there that specialise in small craft traders, it can be basic, and cost around £30 a year, or you can get more expensive insurance, that will cover you for much more, like teaching workshops, selling your work via third parties, and insurance whilst in transit. If you sell at fairs and markets, then you may be asked for a copy of your insurance. If you aren’t, make sure the venue has it’s own insurance. If someone trips on your table, will you personally be liable if they decide to take legal action for injury?

So here we are, your basic formula.

Raw materials to make item. for examples sake, lets say £1

You should at least double what your raw materials are = £2

Add on your hourly rate, unskilled at least £10, more if qualified or experienced, if your item only took half an hour, add at least £5 = £7

Does your item have packaging and a label? Do you print out an information sheet? All these little things add to the final price.

Did you have to buy tools to make this product? The cost must be factored in, each item you make creates ware and tear on tools, so they will eventually need replacing. Did you use electricity? A computer? Broadband? All of these things mount up, but can be very hard to calculate. Now don’t forget to add your insurance, any petrol used to take your items to the fair or market, and add on your fee for selling at the market, or factor in the costs of online selling. Ebay, Etsy, Folksy, all great places to try and sell your handmade items, but they all charge. And then paypal takes their cut of the sale price too!

If you want to sell through shops, most charge a commission rate of around 30 to 40%. You need to add this on to your selling price too.

If you want to be professional, your prices should be the same no matter where you sell, shop owners will not thank you when customers tell them they can get your items cheaper direct! So your original £1 in raw materials, should now be retailing at at least £15 for you to make any profit. And that’s at the most basic level of skill. If you are an experienced artist, that’s a skill most people can’t achieve, so you should be charging much more for your time.

I hope this has helped in any way, if you have any questions, don’t hesitate to ask.

Advertisements

One thought on “How To Price My Handmade Goods

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s