Pricing handmade items…

Okay, let’s try this… I am having summer sale of cell phone wristlets in MerineitiDesign basically because I haven’t had time to actually figure out their true price. I am selling them for 4.90€ unpadded, and 5.90€ padded versions.

So, I also wanted to know how long does it take to make one of these, so I set the timer and decided to make a batch of 6. It is always faster to sew in batches than one by one.
It took me 1h 25 minutes (possibly slightly more,  as I didn’t remember to add ironing) which means one will be made in about 15 minutes So, labor would be 0,25 x hourly wage

Now, what is my hourly wage? At my last job, it was 12.50€ /h
0.25×12.50=3.10€

But, as an entrepreneur, you need to price yourself higher, because you need to take care of all the expenses that if employer, would be taken care by the employee.
So, entrepreneur hour would be 25-40€. Let’s be humble and choose the absolute minimum (according quick online search about Finnish entrepreneurs) 25€/h
0.25×25=6.25

Another BUT. But I am not a just fresh out of school basic seamstress. I have a highly special set of knowledge in corsetry and historical sewing, which means I could easily price my hours at 60€! Though I guess it’s because I am woman and we’re still told to be less worth than a man, I will add on a side note comparison that a well established male tailor prices their hours worth over 80€, if you ever wonder why well fitted suits may cost thousands of moneys.
0,25×60=15€ 

3.10, 6.25, 15 for labor cost… I’ll have to discard the cheap labor, since it won’t be sufficient. And as this is not special sewing, I’m discarding the 60€/h dream. So, we’ll use the 6.25€ labor cost per purse as a starting point. See, how it’s already more than the sale price I have in the shop, and this is just labor!

Let’s try out formulas for pricing handmade items:

Simple  formula from create and thrive

Cost Price (labour + price of materials) x 2 = Wholesale

 

Wholesale x 2 = Retail

With padded black cat purse, (6.25+2.50)=8.75 wholesale
8.75×2= 17.50€

BUT this formula completely forgets other expenses, like electricity, workroom rent, gas etc and profit. If you’ve ever watched Dragon’s Den /Shark Tank, “profit” is the figure capitalist wants to hear.

This formula is from etsy blog

Materials + Labor + Expenses + Profit = Wholesale x 2 = Retail

2.5+6.25 + (I have no clue, but let’s imagine sewing 8hrs a day, 32 purses a day 25business days=800purses , dividing workroom rent 310/electricity 15 and a 30day travel card45=370 that would be 370/800=0,46 per purse) 0,46 + (profit, I don’t know how this is calculated? Is this just random figure you want to make on top?)

So, this retail price would be 17.95+profit… so, if that “profit would be random 2.04€ (wholesale, retail price for this little padded cell phone wristlet purse would be 19.99€

Nice looking figure, actually!  My gut feeling was it would be something like 15.99€ – or that would be the price I have paid for cute coin purses in the past – and maybe if I add a little extra, like a keyring, I woulnd’t be ashamed to ask this. The only problem is, that would make 27USD, a figure that seems pretty high… so I suppose, in the end 18€/24.90USD would be what I will ask for these. I lose that important profit to make the price seem more fair/nice, so I guess I have to forget about adding that keyring…

I still wonder, with cheap factory purses selling 4.99, do people really care that paying a little more they get handmade, unique things? That will pay themselves back when they last longer than the 4.99 ones that may be cute, but poor materials deter fast?
Still, people do pay up to 24.99 or even 39.99 on sloppily made, plasticy little bags as long as there is a popular licenced figure on it… so the pricing may not be so unfair.
Yet, what about all the rich housewives at etsy selling their truly handmade items at 4.99, because it’s just their hobby and they do not need to make a living? Some of them are very skilled, maybe even years of experience and degree, and I just wish they would not undersell either, even if they didn’t need the money. It will help get the appreciation handmade vs. sweatshops needs to price accordingly.

—–

Just one more formula! I thought I found a simple tool in CraftsCalculator, but then this happened:

What? So you’re basically saying I should just quit…
For a moment I laughed and thought this is a joke made by some disappointed crafter.

But it was just that it does not understand decimals (I was trying with the example wristlet, with 0.33h work)

So, instead I put in material cost and hours it takes to make the simplest historical half boned corset, with 10% profit. It gave 327€. I think that’s pretty truthful, actually, for a ready made corset! On the other hand, I have them in my shop at the moment from 89€ to 199€… so, if you want one of those, take advantage now that I’m still underselling. After I get things started professionally, I will not be able to do that.

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