If you read my last post hopefully your ready to get an item listed but first you need to figure out a price! I think it’s safe to say the number one question when people are trying to sell their crochet items is how much should I charge?? This was a huge struggle for me as well. I also see a lot of people asking how to deal with others under pricing. Like many others I started somewhere and have made mistakes (believe me!).
I looked back and my very first hat on Etsy sold for $9. Yep, $9! It sounds absolutely crazy to me now but at the time I thought $9 was pushing it. For me it was a confidence thing. I wondered if my work was worth as much as others. I also didn’t have a very good idea of what items similar to mine actually sold for.
After a while, I finally had enough sense to up my prices. I actually have to thank my husband. For once, he knew better than I did. From the beginning he said I was nuts for setting my prices so low. I was worried if I raised my prices no one would buy from me but at the same time I couldn’t afford to work for such little money. I stared with a small increase (maybe 5-10%) and you know what? I sold more! After some research I realized my prices were still pretty low compared to others so I raised my prices a but more. You know what happened? I sold MORE! I thought, lets try this again so I raised them a little more. Can you guess what happened? I SOLD MORE!
I personally think this is a pretty natural process for all of us to go through. So when others ask how do you deal with others underpricing I’d say I don’t. First, like I said above we all start somewhere. I don’t think others (well, not everyone) do it to mess with other sellers but it’s probably a lack of confidence or knowledge. Second, if these people are in a completely different price bracket than you why should you worry? The way I look at it is these people aren’t really taking customers from me. I think it’s very unlikely that the same person that spent $9 on a hat would spend $25 on a similar hat. If someone wants to spend $9 on a handmade hat go for it! The people who actually understand the work that goes into a handmade item WILL spend the money and THESE are the people you should target by pricing appropriately.
I really wish I could tell you there’s a fool-proof method/formula to pricing your items but from my experience it’s pretty much guessing. I’ll use a little math and common sense. This is the method I try to follow.
1. I think how much I’d like to make for my time. This usually falls around $15-$20/hour for me. Keep in mind, I’m a pretty fast so for someone that’s not a very fast crocheter this might not be totally realistic but feel free to be ambitious!
2. I try to figure in some cost of materials. You could make an item, weigh it and figure exactly how much that item will cost you BUT something to remember. If you used only part of a skein to make a hat what if you happen to never use the rest of that skein (gasp!)? So to keep it simple I just figure the total cost of each skein. If I used half a skein I figure the cost of one skein. If I used one and a half of a skein I figure the cost of two skeins and so on…You might not want to go to quite this extreme when using a bunch of different colors but it’s definitely something to consider.
3. I figure in all other costs. This will include fees and is usually a few bucks. I’ll be honest, I usually just guess a few bucks 🙂
4. I like to figure in a little extra. Remember, you need to figure in paying for internet, gas to go to the post office…etc. This is just to be on the safe side. I rather overestimate than underestimate.
You might have noticed I have not mentioned shipping. This is completely separate and I will address it in another post.
So lets say I want to sell this hat which takes me about an hour (pattern available here).
The skein of yarn is around $3 and lets call my fees and extras $5. That means I’d like to charge $23-28 (adding in what I’d like to make for my time). You could stop here and go list your item BUT I like to get a feel for what’s out there just to see how I compare. I’ll do a few searches on Etsy (don’t worry, you don’t have to sell on Etsy to do this) and see what others are charging. I’ll click around and look at other’s sold items just to be sure they are actually selling at the I see prices.
If you find prices similar to what you wanted great! I’d probably pick somewhere in the middle and go with it. But lets say you see others are getting $12-$25 for similar items. This does NOT mean you need to throw out what you wanted to make and go with the middle of about $17. In this case I’d still go for the higher range of $23-$25. I know it’s hard but be confident in your work and ask what you deserve to get.
The last thing I’d like to add to this post is how to use pricing to your advantage. I use prices to help control the amount of orders I get ALL the time. During the summer things get slow so I keep my prices on the lower range. So for the hat above I’d probably have it listed around $23. Now, if your lucky enough to get so many orders during the busy season that you can barely stand it why not use it to your advantage? I usually see an increase in sales by late Summer so from about August to Christmas time (or until the time I stop taking Christmas orders) I’ll slowly increase prices. It’s usually only by about 5% (which is only a dollar or so) but by the time people are frantically looking for Christmas presents my prices are nice and high (but still fair). If you’re going to be crazy busy why not make it worth it? 🙂
You can also throw in few sales now and again. I try not to go too crazy here. If you condition your customers to too many sales they’re less likely to buy from you at full price. I don’t do any more than one sale a month (usually none during the busy season) and only take 10% off.
**Remember these tips are from my own experience. While I am not an expert I have found success in selling my crochet hats and other items so these are things that have worked for me over the years. I can not guarantee they will work for you but it’s definitely something to consider.
As always if you have any questions feel free to ask. I couldn’t cover everything in this post so I’m happy to help if I can!
In my next post I will be talking about photography!!
Edit: In the comments Leann mentions this calculator. This didn’t exist when I first started but I’ve seen it before. It’s fun to play with and might give you a good starting point for pricing. For the hat above I filled out the info with a competent level of expertise and a 70% profit to get $21 and that’s not including any fees. I’m not sure how they come to this but still interesting and maybe a good way to keep pricing consistent.