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Do you wonder how you will ever be profitable in your craft business when it seems like the only way to make sales is to price lower than your competitors?
I did and I was SO wrong!
Today I’m going to share with you a pricing strategy that takes into account all of the expenses that we have as craft business owners, and this should help put you on the right path to figuring out the right pricing for you.
So to get started the first thing you need to think about, and actually start documenting are your expenses. Below are some of the expenses that you want to take into account:
Supplies (Machines, Vinyl, Blades, Mats, Transfer Paper, T-shirts, other blanks, etc.)
Shipping (Look at domestic and international shipping costs and don’t forget to figure out shipping costs for different size packages.)
Packaging (Mailers, Boxes, Branding Inserts, Stickers, etc.)
Selling Fees (Etsy fees, PayPal fees, Advertising fees, etc.)
Taxes (Local/State and Federal)
Other Costs (Employees, Studio Space, etc.)
Once you’ve listed all of your expenses, you then want to start off looking at each product that you will offer and figure out what each item costs you.
Please note that each product that you sell will not require a new roll of vinyl (at least not normally), so you want to start documenting how many items you can make for each roll, blade, mat, etc. Keep track of these things as they will help you perfect your pricing down the road.
P.S. There’s a FREE PRICING CALCULATOR SPREADSHEET for you at the bottom of this article. You can use this spreadsheet to insert all of YOUR expenses and figure out what your exact profit will be. Use this with every one of your products, and don’t be afraid to come back to the drawing board if you feel like the pricing you settled on isn’t working for you.
Now that you’ve figured out what each product will cost you to make, write that down as your “total product cost” to make and ship that specific item. You want to take that number now and factor in 2 things to come up with your final pricing cost.
1. The profit you want to make. – Make sure to take into consideration how long an item takes to make. Take the profit you want to make and divide it by the amount of hours it takes to make said item and you’ve got your “hourly rate.”
2. Market pricing. AKA what your competitors are selling the same or like items for. (TIP: Look at competitors who ARE making sales, not just people who you see posting in your local groups.)
Don’t be afraid to price lower or higher depending on what pricing you come up with. So long as you come up with the number strategically taking into account your expenses, time and the profit you want to make, you will be good to go.
Remember that you can always make changes in the future if things change or you want to give yourself a raise ;).
That’s it! You’re ready to start your craft business pricing journey.
Schedule some time in the near future to work on this and keep lots of notes. It’s also a good idea to look at your pricing at least once a year to take into consideration any expenses that may have increased and market pricing changes that may happen.
Don’t forget to download the FREE PRICING CALCULATOR SPREADSHEET that I’m including at the bottom of this post to help you with your calculations.
QUICK NOTE: I created this resource with lots of love for my fellow craft business owners. If you’d like to share it with your friends (I’d LOVE THIS!), I do ask that you just link them to this post and help support my website.
Also, I have a quick favor to ask. Before you download this freebie, please, FOLLOW ME on Instagram (CLICK HERE) and PIN one of the images above.
Thank you so much for your support, and if you use my resource, tag me @PerfectStylishCuts, I love following other makers.
DOWNLOAD YOUR FREE PRICING CALCULATOR SPREADSHEET HERE
FREE PRICING CALCULATOR SPREADSHEET – Works with Microsoft Excel and Google Docs.
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