Business Tips: Pricing for Profit

Pricing is one of the things that many small retailers struggle with. Today my mission is to help you change your thoughts about the way you set your product prices and hopefully get you thinking in terms of “Pricing for Profit”.

I mean, let’s face it, you didn’t open your Etsy shop to give your product away; you actually would like to earn a profit – whether it’s for yourself or a special cause.

When it comes to pricing, there are a few things you need to consider, but I believe that the main consideration has to be, “what is the perceived value of your product?” If you haven’t noticed already, prices on Etsy are all over the board – some are so low that you wonder how the shop owner makes enough money for materials and others are so astronomically high that it makes you wonder, “who would pay that much for THAT!

If I were to define what “VALUE” means in this context, I’d describe it as “how your product stacks up against similar products being offered on Etsy. The percentage of unique products out there is very small. If your product is one of these unique products then you offer a much higher value.

Before I get into methods, let me warn you that there is no single recipe to determine pricing – remember, “there’s more than one way to skin a cat” – the same goes with pricing.

Now, remember the goal is attract customers and convert them into buyers.  Pricing is just a small piece of the puzzle but it can have a big impact.  Price your item to low your customers will be skeptical, price it to high an they may never make a purchase. I strongly, strongly believe that you need to offer your customers options.  Yes, option – pricing options that is.  Let’s take a look at a few pricing methods you can use:

VERSIONING PRICING

You can offer your customers pricing options using a “versioning pricing strategy” or what some would call a “tiered pricing strategy“.  How does versioning pricing work? Let’s use the oh so popular iPhone as an example.

When you make the decision to purchase an iPhone, you have a choice of an iPhone 3Gs or iPhone4, then you to choose the memory capacity: 8GB, 16GB or 32GB.  The price varies from $99 to $299, depending on the model you choose.  It’s the same phone in different versions.

Now think of your product in these same terms, let’s say you offer handmade handbags; you could offer one handbag in 2 or 3 different sizes and have different prices for each handbag - this is versioning or tiered pricing.

What are the benefits of this pricing strategy?  Well, it allows you to offer a product for every budget – one customer may be able to afford one of your lower priced, smaller handbags while other customers may be interested in the high-end, larger bag regardless of price. Keep in mind that for many customers price is the determining factor in their purchase – with the state of the economy and people being more budget conscious you need to offer options.

VALUE BASED PRICING

Another strategy is to price your product based on the value it creates for your customer. Does your product save your customer’s money? Does your product help reduce carbon footprint and can you translate this into some sort of dollar or impact value?

A good example for value based pricing would be disposable nappies.  Now, it would be hoove you to break down the savings for your customers (being a mom of 3 kiddos, I know this nappy business all too well). The average cost of a jumbo package of disposable diapers is about $30 for a large box.

Research shows that over a 3.5 year span you would have used about 10,000 disposable diapers with a total cost of about $4060 (this does not include the cost of pull-ups for toilet training). The average cost for a a starter package of 5 reusable nappies is about $30, you may want to purchase 3 starter packages for a total of 15 nappies at a cost of $90. You may need to purchase at least 4 different sizes for a cost of $360.  $2400 vs. $360 this is the dollar savings value. Add to that the carbon footprint reduction and you have a good selling point.

FAIR PRICING

Sometime it doesn’t matter how much value your product offers or how unique it truly is, most customers have a limit they are willing to spend on an item; what they consider “fair”.

Let’s say you offer instant pant extenders for little ones, a fun fabric swatch that looks like a cuffed jean which can be easily attached to a child’s jeans to extend the length so the jeans could be used longer .  Your cost of making the pant extender is $3.50, even if it delivered a cost savings of $1,000 a year,  you would be hard-pressed to offer this product $75 – $100. Why? People would feel ripped off – the perceived value is not that high for such an item and so consumers will mentally place a “cap price” on your item before they even look at your prices.

Fair pricing does require that you do a little market research and find out how much your customers would be willing to pay for your product. This may require actually taking your product out and asking people what they would pay.

BUNDLE PRICING

The last pricing strategy I’ll touch on is known as “Bundle pricing” also known as “Promotional price“. Offering a Bundle means that you combine two or three products and offer them as one combined product.

If you’ve ever watched an informercial and heard the tag line “but, wait there’s more!  We are going to give you products b, c & d when you purchase product a” – you have experienced the art of “bundle pricing”. You are enticed to make the purchase because you are getting more for your buck.

When you offer a group of related products for a  price that is significantly lower than the cost of  purchasing each product individually, customers may be more motivated to buy. This is one clever way of offering discount pricing.

Let me give you an example. Let’s say you offer fabulous knit items in your shop, selling each piece individually.  Your most popular item is your cool knit scarf for $20 but your funky gloves ($18) are not getting much love.  If you were to bundle the two items together, the scarf and gloves and offer it at a bundle price of let’s say $30, you may see your sale increase significantly because customers will see the “value” of purchasing the scarf and getting the gloves for a lower price than if purchased alone.  It’s a psychology thing that works.

Now these are just a few pricing strategies you can use, there are tons of other pricing strategies out there you can explore.  So now, let’s put it to work.

SETTING YOUR PRICE

Now that you have chosen a pricing strategy you are ready to start the process of setting your price.  Before you can price your items you need to figure out  a few specifics, such as:

Materials Costs – how much did you pay for the materials you used to create your product.  Pull out your receipts and calculate it all

How many items were you able to make with the materials? If you could only make one item, the to cost of materials is simple to figure out. If you were able to make 3 similar items, you would divide the cost of materials by 3 to get your material cost for one item.

How long did it take you to make the one item? 1/2 hour, 1 hour, 1 day?  If you calculated the time for all three items, then divide the time by three to get the time it took to make one item.

Now let’s put this all into  fancy little formulas to calculate your costs, wholesale price and retail price:

Cost of Materials + Labor + Overhead (10%-15%) = Your Total Cost

Let me put this formula into context for you.  Lets use the handbag example above.  You make these fabulous handbags, each bag takes you 1/2 hour (.50 mins)  to make; you need to put a price on your time – I tend to use $14 – $20 an hour. Your material, all the fabic, thread and other materials for the one bag cost you $6.  How would this fit into the formula format?

$6 (cost of materials)+ $7 Labor = $13

Now you have to figure out your overhead costs. Overhead is comprised of the  things you normally don’t consider, like office supplies, electricity for your space, etc.. The easiest way to figure out overhead cost without stressing yourself out is as a percentage  of your materials and labor – I use (10% – 15%).  For this example let’s use the lowest 10%.

$13 x .10 (0r 10%) = $1.30

Now plug it all into the formula:

$6 (cost of materials)+ $7 Labor + $1.30 overhead = $14.30 Your Total Cost

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Now that you figured out your total costs, we can move onto the pricing zone.  We start off by figuring out what your wholesale price would using the simple formula below:

Your Total Cost x 2 = Wholesale Price

In the case of the handbags above your formula would look like this:

$14.30 Total cost x 2 = $28.60 Wholesale

This is the lowest price you would offer your handbags to anyone interested in purchasing bulk.  I normally required my wholesale customers to order 3 pcs per product with a min. $50 order.

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Let’s move on to figuring out your retail price, using the following formula:

Wholesale Price x (2 – 3)= Retail Price

The retail price for your handbags.  The 2 – 3 is what we call keystones would be calculated as:

$28.60 x 2 = $57.20

This would be the price your would list your item for on Etsy when selling individual products.  You would need to then need to match your price to your Pricing Strategy to ensure your customers get the best deal from you based on your pricing strategy.

Your retail profit is:

$57.20 (retail price) – $14.30 (Your total costs) = $42.90 Profit

This spiffy worksheet shows you all the calculations:

WHAT DOES THIS TELL US?

Once you calculate all your numbers, you know the range you can use to set your retail price.  In the case of the above handbag, we could set the price anywhere in the range of $33.60 – $57.20 (I always add at least $5 to the wholesale price to figure out my lowest range).  I can still offer the product at a wholesale price and make money at the same time.

When you set your prices correctly, you never risk selling your product for less than it cost you to make it. It’s Pricing for Profit.

I know this is a lot of information to take in, so to make it easy, I created a fun little spreadsheet you can use to calculate your Wholesale and Retail price, just plug in your cost of materials and your time and VIOLA! your prices are instantly calculated.

Download EcoEtsy Price Calculator (Excel Spreadsheet) Now!

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Here are my final treasures for you.  Food for thought.

  • Lower prices DO NOT automatically equal increased sales,
  • Customers who buy from you because of price are not YOUR customers
  • If business is bad cutting prices could make it WORSE
  • Small price increases could SIGNIFICANTLY increase your profits

We’d love to here your experience with setting your product pricing. Have you developed a system that works for you? Have customers shared their sentiments regarding your pricing? What have been your challenges?  Share your experience as a comment below.

This post was written by

Myra @ HerbanLuxe – who has written posts on Eco Etsy.
Myra is an Etsian with an MBA. The art of business and technology are her two obsessions. She has been writing EcoEtsy Business Tips since 2010. Myra grew up in Puerto Rico with grandparents who were a head of their time and didn't know it - living what we would call today, "a simple green life." Her love of learning and teaching are the key drivers in almost everything she does.

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About Myra @ HerbanLuxe

Myra is an Etsian with an MBA. The art of business and technology are her two obsessions. She has been writing EcoEtsy Business Tips since 2010. Myra grew up in Puerto Rico with grandparents who were a head of their time and didn't know it - living what we would call today, "a simple green life." Her love of learning and teaching are the key drivers in almost everything she does.

Comments

  1. Hi,

    I have to admit I’m confused by this formula. I’m not confused about how to plug in numbers or what my total would be according to the formula, and I’m definitely not confused about the concept of valuing my work highly- I don’t even think the numbers it yields are outrageous- I just can’t understand how this makes sense for etsy. Why add up all your costs AND what you would like to be paid as an hourly rate for the work you put in and THEN multiply it by 2? What does that 2 represent? Why is there a 2 there? Why not a 2.2? or a 1.8? And then why is that multiplied again and why by that amount? It results in a reasonable price but it doesn’t seem to get there in a way that makes sense. It’s very arbitrary and seems to come from nowhere where a simpler formula would not be arbitrary and could still yield similar results.

    The only things really involved in the product are materials, overhead and your profit. your hourly wage is part of your profit. it is your work so it is not separate. In the given example you put in a half hour of work and you end up selling it at retail for $57.20. your expenses were $6 for materials and $1.30 overhead. everything other than that is your profit. Your profit is $50.90. How much work have you put in? 1/2 hour. You worked a half hour and you made $50.90 of profit ABOVE your costs in exchange for that 1/2 hour of work. If it makes sense for you to conceptualize your profit in hourly terms then you have been paid $101.80 per hour of work. That’s fine with me but THAT is your hourly rate. Not $14. $101.80. Am I missing something? If you calculate it out that is how much you made for the time you put in. Why not just call a spade a spade and decide your time is worth $101.80 or so per hour since in the end after all the math which is never explained, that is how much you have been paid for the amount of time you put in?

    • by the way I did find your article to be a valuable reminder and I think you are bringing up a lot of very important points about placing a reasonable value on the hard work we put into our products- I just don’t follow the logic of your specific formula. Thank you

      • Janine,
        I was all set to say that you were over complicating this, but I decided to read through to the end and am I glad that I did! You have in a single post explained the whole process to me in a simple straight forward way that I understand. My mind kept going back to the same logic, but everything else I could find told me that I was wrong. You my dear are a blessing! Thank you so very much.
        Pam

    • Thanks for your comments. I decided to read through my post again, I understand where you are coming from. The formula is basic retail math, the 2 is what is called a keystone and it’s doesn’t have to be 2 it can be 1.8, 3, 5 whatever you want.

      As for the value on Etsy, I guess it’s up to the shop owner as to what method they will use to calculate their prices. This is just a guide, to really get people thinking about pricing for profit. There are many Etsy shop owners who are underselling themselves.

      • It seems to me that it’s much easier to price something that’s been assembled from new parts than it is a thing that is made mostly from up-cycled items. For instance, my dolls that haven’t sold at all. If I were to use the formula to price them then they would be so cheap that they would be perceived as rubbish. My husband had me price them at almost twice what I have them at, but I thought it was too much. In either case, I get heaps of compliments, but no sales. I’ve given up making the dolls, but still don’t sell anything. I feel so lost in the crowd that I’m ready to just give up and sell of all my supplies. Handmade has become “Madison Avenued” and it is more in the SEO and marketing than in the creating.

        • Stange Puppy, you are not alone in your feelings. Being a small vendor it is difficult. I think everyone is feeling the slump in their sales. People are being more cautious about their purchases. Keep your chin up. It’s sad to hear of yet one more person giving up on their talent.

          • Thanks HerbanLuxe, it is soothing to hear that but all I see is others selling where I haven’t. It’s really hard when I see a sloppily made doll sell for 3x what mine are priced at. It is good to know that someone does care enough to answer me. At this point, maybe I’ll just take a month or so to just make things from what I have here and then see what happens. If I had any sales it might just be a slump. Well thank you for caring, you’re a sweetheart.

            • I’m sorry to hear you’re having such a hard time! Before you give up, I hope you’ll reassess your marketing efforts… I’m not sure if you’ve been doing any marketing or what kind if you have, but it’s very important for selling on Etsy. No one will purchase your items in almost any category unless you’re featured somewhere on Etsy or you go search out your buyers. Otherwise, your buyers just don’t know you’re there. Etsy’s too big, even for handmade dolls! Do some thinking about the marketing you’ve been doing. Is that little niche of people who collect dolls or are looking for handmade dolls for themselves or their children seeing your shop name or being given your shop link? Are they getting from that all the way to actually clicking into your shop? If either of these are “no”, then you’re not marketing right and that’s why you aren’t making sales.
              Good luck!

            • StrangePuppy, I really hope that you give it another shot. I want to share what I tend to do in a slump – I sit and write down ideas that will help me figure out how I can make my products different than what’s already in the market. I offer handmade cosmetics and its a market that is highly saturated. I don’t worry about what others are doing. I also narrowed my target market down significantly.

              How would this apply to you? You can try and narrow your market down to a specific area. Find a market that is in need of your dolls (believe me there is a market), then being pitching to that market. You may need to make adjustment to your dolls to fit the market need but it’s worth it. For example, when I checked out your dolls, they struck me as puppet type dolls, attached a few strings and your dolls are now puppets ready for the theater. They could also serve a self-esteem dolls. There are tons of other areas. The idea is to make them for a specific market.

              Again, hope you try a different angle before calling it quits.

        • I haven’t yet sold any items either (I used to have another shop that I recently closed down and opened again under a different name), so I can relate to your frustration. As with many other vendors, I get a lot of compliments but no sales. I try not to get discouraged because there are a lot of items I want to buy on Etsy but, because of the economy, just can’t afford at this time. Hopefully when the economy turns around and people can acquire a reasonable amount of disposable income (whenever that will be), those compliments will turn into sales. That is what I am counting on.

          • So did I dreamingd’! I thought maybe the old name was too hard to remember, so I did the same thing. I’ve been at this for nearly 3yrs! I have been a Realtor, so I do understand about the marketing. I just wish things would stop changing so fast! I’ve been putting most of my energy into marketing and making “friends”
            I gave up on the dolls, but decided to move more toward the retro style market. I think Laura is right about being featured, and I’ve been building up a base on FB, because, well, I just don’t like swimming with sharks if that makes sense. And I think I might have one more thing to try, and if it works, I owe you all for picking me up off the floor here. But this week at least, I plan to get busy filling up the shop. There might be one more doll in me…I have a head floating around here somewhere… BB… (((((((HUG))))))))

  2. Thanks for this article! I’ve been in the process of re-pricing my store. I am feeling more comfortable in charging higher prices as my quality goes up and I truly feel that my items are priced fairly. There are a few costs that I haven’t put into the base price yet including etsy fees and such, but I have a hard time putting those in because if I’m going to be selling wholesale I won’t have those fees. So right now those fees are coming out of my profits, which I’m okay with for now. Perhaps in a few months I’ll take a look at my pricing again and up it a bit. Thanks for all the information and affirmation that we are worth it!

  3. I am new to the world of Etsy and initially I listed my handmade greeting cards for pitifully-low prices, thinking that would encourage customers to buy my items. I was wrong. You are right in saying that you need to price items according to their value, and that selling good items for cheap prices communicates poor value.

    I took your advice and bumped up my prices a little — I hope it works!!! :)

  4. Thank you so much for adding the calculator. Well done.

  5. Great article – it’s been a real eye-opener for me to see what the ‘real’ price of my products should be and also to read the comments of other Etsy sellers who are working in the same medium about the feasibility of this kind of pricing in the marketplace. It has certainly made me think twice about how I approach pricing and the value I put on my own time and creativity.

    Thank you!

  6. I have a question. I probably just missed this but how exactly does this work? —>
    “Small price increases could SIGNIFICANTLY increase your profits” <—
    Oh, sorry, two questions… does all this google stuff I'm doing, bundling all my stuff (shop, blog, pix) really work to increase traffic and sales? i spend so much time trying to figure out what is going on that I find I have a stack of things to make or finish!

    • Hi!
      Let’s see if I can answer your question.

      First, yes, “small” price increased could significantly increase your profits. An example, let’s say you have a product priced at $8.99 and you increase the price to $9.99. That $1 increase could potentially translate to an increased $100 or more per year. Small fries when you think of onesie twosies, but you it could potentially cover materials and therefore increase overall profits.

      Not sure what you mean by “google stuff” but I’m assuming you mean adversting. I think the key is to take a step back and see which are bringing in the most traffic. Drop the activities that aren’t as effective. For example, I concentrate my focus on my weekend giveaways on my Facebook Fan Page because it drives the most traffic and I don’t have to track a million things.

      I hope this helps.

  7. Kandice at Sugar Plum Sewing says:

    I have a Mac computer. is there a spread sheet download that will work for me?

  8. If I work this formula I come up with a retail price of $63 for a single knitted cloth. I myself would not pay this amount for even handmade. This formula does not work well with my shop at all. Very interesting article and I will be able to apply some of it, but it is back to trial and error with my pricing.

    • Hi Barb;

      You can play around with the numbers in the spreadsheet to make it work for you. Simply download the spreadsheet. I agree that the pricing structure may not work for everyone, but the idea was to get everyone thinking of pricing in a different way.

      You can also use the formulas in the article and work with them as well. Good Luck

    • I think a part of the problem is that most of us have grown up with cheap imports, and a throw away mentality. I remember as a kid, knitting and wishing there was a faster way. Well there was, and is. Hand knitted items probably will never be a big money maker. On the other hand, sweaters that my mother knitted for me back in the ’80′s are still like the day they were made! So I think that once people learn more they will be more likely to pay for quality… at least for things they want to last.

    • I think one of the keys here is that YOU are not your customer. It is a difficult lesson to learn, but your customer might be much wealthier than you. Or perhaps they value quality knitwear more than you. (That actually stands to reason since subconsciously, you know you can make it yourself so you might undervalue it.) There are many reasons your customer might be willing to pay more than you. Of course, you do need to realize the market value of your products and if a knitted cloth just isn’t perceived in the market as worth $63, even if it’s handmade, then you might need to drop the price down.

      But do try several different price points if you can. Like try knitting some pieces with better yarn than others and then offering them at different prices. See which sells better. And more importantly, see which makes you more money (you may sell fewer of the more expensive pieces but make more dollars because they are so expensive) and what is popular. Then keep a mix of the most popular and most lucrative pieces. And always keep a range of prices in your shop so every customer who visits can find a piece in their desired price range.

  9. this is a great article to think about!!

  10. great article!!! thanks for this

  11. Thank you so much for this post! It has helped me tremendously with my pricing! I have been a little lost with it since I started online. I was thinking about offering price brackets for a variety of budgets, and now I am for sure! Thank you again!

  12. Thanks for a great article – the examples illustrate pricing methods so well, and the spreadsheet is awesome!

    I linked to this on my blog today: http://www.bobalookids.com/2011/01/weekend-links-january-29th.html

  13. Hi! Thanks for all the hard work you spent putting this together and I believe I learned some things.

    To add even more credibility to this article, and subsequently your work as a whole, I’d go through and do some proof-reading. I found several typos!

  14. Thank you for the formula!

  15. This article was so helpful and I have had a shift in thinking about my etsy shop. This is my second year designing kids organic graphic tees. Last year as I was trying to get into boutiques and while opening my Etsy shop, I so badly wanted the validation that someone liked them that I BARELY covered the cost of materials, let alone anything else like overhead or profit. I will have to raise my prices and be confident that “my people ” will appreciate what they are getting. Any suggestions about communicating to folks on the fb fan page or previous customers why the prices have gone up? Do you say anything, or just raise them?

  16. Well, market research also has to come into play. Looking at this pricing formula, a simple chain maille bracelet that took me 30 minutes to make and cost $1.30 in supplies at wholesale (assuming $14/h and 10% overhead) would be $18. Compatible bracelets online are in the $10-$15 dollar range. Honeslty I can barely see a retail price of $18 on them. I’ve been selling them for $10, will be bumping it up to $12-$14 though.

    I have been told by expireinced vendors to up my prices.

    • Claire Bear says:

      Robin, you say that “Compatible bracelets online are in the $10-$15 dollar range”, unless they are also handmade eco-friendly ones, you really really should be pricing yours at $15 at least. Personally, when I am buying a present for someone, or for myself, I won’t automatically go for the sheapest one, as I assume that they are shoddy, or the sellers would be able to charge more for them.
      Obviously this doesn’t apply to mass-produced stuff that is available through more than one supplier, but that is not what you’re selling is it?
      Please put your prices up to reflect what your bracelets are worth.
      I have made bracelets as gifts and as an exercise I priced them up using a similar formula. The retail price worked out at approx uk£14 – £18, and I would be happy charging a price in that region (with possible reduction if it was part of a large order ~ ie, over £50).

      • Actually with those particular chain maille bracelets, pretty much everyone I have seen orders from the same supplers as I do, I can tell by the color choices they offer. They are the leading supplier of chain maille making supplies and they are a smallish ma & pop type operation. And yes the compatible ones are also handmade ones on Etsy are Artfire.

  17. Thank you so much for the info and spreadsheet!! Really, what a generous gift that I will use over and over; hopefully =).

  18. Great article but it only reaffirms what others have said to me before…my prices are too low:o( I’ve been wanting to adjust them but there’s no chance that I’d be able to sell one of my dolls for $200.Yes they are one-of-a-kind and they take 3-5 hours to complete but most of my customers are buying for children.Maybe one day I can make that kind of cash but for now I have to sell what I can at the average doll price point or I’ll have storage tubs full of dolls sitting around “homeless”.
    I will use the excel spreadsheet figures in the future as a reference for some other items that I’ll be creating

  19. Such great information. Thank you

  20. Victoria Vallieres says:

    …recently someone convo’d me, stating that she had admired one of my items for some time and asked if I’d reduce the price by 10% and try to “stuff it” in a smaller size box so she could buy it…I thanked her for admiring it and politely told her that it would not fit into a smaller box due to its size and that I chose not reduce the price due to the time it took me to make it…I think educating people about the length of time it takes to create our art and craft is really a good thing for all of us…customers need to know how much of our selves go into the making of our handmade beauties…

  21. Great article and very good timing too as I am getting ready to set up shop on Etsy. I still need to take photos and post the items on my shop. Will reference this article when working on my pricing. Thanks!

  22. I have worked on my pricing since opening my Etsy shop in August and have had some great advice from friends – one worked in marketing for several years and another one shared her online shopping “requirements”. I also have done a lot of research on products that are similar to mine to make sure that my pricing is within the same range and yet allow me to make a profit. The information given in this post is great and I would recommend that each one try it to see where their pricing falls.

  23. This is a very eye opening article. Thank you for sharing it. My concern now is, what to do with some of lower priced items, like my prints for example? According to this article I could charge 3x’s as much as I currently am for one color hand pulled prints.
    Any suggestions for what to do with the current inventory are welcome.
    I will apply what I’ve learned to future listings.

    • Candace, you could edit your current prices on etsy to reflect your new pricing strategy, so that all your items on offer use the new strategy. Just go do ‘my etsy’ and next to the item, click on ‘edit’.

  24. I think this is a great article.

    Figuring out the correct cost of an item for Handmade can be very difficult.

    I just want to bring this up, because in my category of Handmade – of Crochet and Knitting – there are many disucssions I have seen regarding the labor: it takes so long to make the items that you cannot figure in your “cost of labor” and get a realistic price. This is especially true in Thread Crochet, where it can take hours and hours of time to complete a 15 inch “Doily” or “Centerpiece”. I have been selling it online and in the past in a local store for years now and, unfortuantely, I have found this to be true. Someone gave me a formula for determining a price for doilies – and it took me a long while to realize that they gave me a formula for wholesale and wanted me to sell it retail that way.

    This is where the value to the Customer comes in.

    So, instead I came up with my own formula based on years of experience selling it online, through a local store and through private contact sales.

    If it is valuable enough to the Customer, they will buy it — I have sold a Round, finely crocheted large Centerpiece (embellished with silver blending filament) for $60.00 online. I also sold larger pieces through a store done in finer thread (size 20 crochet thread) for $35.00 — and both sold rather quickly at those times. To the customers who bought them, they were valuable enough to spend the money.

    I find that the smaller Coasters and Trinkets are difficult to sell at a reasonable price relative to the time spent on them, but they are like good promotional pieces of what I can make.

    I try to carry a balance of the 2 in my online shops — and I always offer to do Custom Orders.

    Also, it depends on what you’re aiming for in your online shops — mine is definitely a hobby business, so I make what I choose and when it sells, it sells — and I am always doing it pro-environment, which is of high importance to me.

    But for someone who is looking to do a profitable online business, this article has some really good formulas — and the one factor is that when you are working to really have this profitable online business — You Need to Offer To The Customer What They Need and Want!!!

    And as we are an “Eco” group — there is a huge campaign to educate and convince people the value of spending some kind of more money on “Eco” products: it is called “green economics” and “correcting for ‘hidden’ external costs of not producing, selling and buying ‘Eco’” — it is taught in basic Economics 101 (at least it was in Economics 101 course I took here in California). I guess some people still don’t realize the “hidden” external costs of not producing, selling and buying “Eco” — these external costs need to be figured into prices, as they are real costs (affects on health, ecological environment, human-caused climate change). As most Handmade items are more “Eco” for a number of reasons, including that they involve less usage of energy that causes carbon emmissions, it should be worth more to people to buy Handmade — also more worth it to buy online with less driving around — I think shipping (through companies that do large shipments) it still has a smaller footprint ecologically than driving all over the place to local stores to buy things, though buying local is also good.

    Been looking at these things for many years — so just need to say it!!

    I think if someone asks why your Handmade, Eco product is more expensive and valuable than some more cheaply made item in “box” store — part of the arguement for the higher price is that it is “Eco” and a discussion of the “hidden external” costs of not buying “Eco”!!

    • Thank you Ruth, for speaking up. This has been a real eye opener for me and has added much value to the way I think and see my products now. Recycling has always been an important part of my lifestyle, but your green economics puts in in greater perspective.

  25. Another point for people thinking their pricing is too high is to look outside the Etsy America market. I live in Paris and the VAST majority of prices I see on Etsy could be doubled and they would still be cheap here. Of course, Etsy isn’t Paris and Paris is an expensive city to live in, but still, there is a market for higher priced goods.

    Another point is that when I look at jewelry that is not expensive by my local terms, I wonder about the quality of materials, workmanship etc and it puts me off buying – and I say that even though I am someone who makes and sells things myself.

  26. Thankyou for the clearly written article about pricing. I look forward to using the formula on some of my items to check how my prices measure up.
    I recently enjoyed a successful holiday craft fair season; all except for my final show. There was another vendor there selling items similar to what I make, and she was practically giving them away. Her prices were so low, I don’t think she was even covering her expenses. Of course, she was the most popular seller at that show! It was very discouraging for me, and I likely won’t do that show again. Crafters who price their work too low undermine the value and work of other crafters.

    • Claire Bear says:

      ” Crafters who price their work too low undermine the value and work of other crafters.” I totally agree especially the VALUE.

  27. Wow!

    Now this is what I needed. Before, pricing was so objective. A shot it the dark. It is great to have formulas and concepts to back you up!

    Thank you for the great post!

  28. I think this spreadsheet will be good for me to work with. However, it’s downloading as a ‘read only’ file, so I can’t change anything in it. Is there something I need to do with it so I can change it?

    • Hey SammiGene,
      You need to click on the download button on the top left corner of the spreadsheet.
      It will let you enter the numbers after that.

  29. I enjoyed your article.
    I have some experiences I would like to share. However, forgive the rambling–it’s the way I write. I appologize in advance. Here goes:

    First: Time yourself. Once the learning curve is low enough to calculate your most efficient time making what you make, use it as your labor/time guide.

    Second: Double your materials cost, because of all the research and gas/traveling, etc., it takes to accumulate.

    Third: Pay yourself a wage: Now, if you work for someone and have absolutely no cost of materials, overhead, and so on, minimum wage is about $8 to $9 an hour–again with no money output for any costs. That’s what an employer will pay you and you go home without any expenses to eat into your pay. Therefore, I pay myself double, i.e., $16 to $18 an hour. This has a lot to do with all the other stuff you have to do to market your things–web costs, photo costs, just moving the stuff around (mailings, getting boxes–all that stuff).

    Fourth: Double that figure (Using 2x materials costs + total labor) for wholesale pricing.

    Fifth: Multiply that figure by 2 to get a retail price for that thing. Unfortunately, if it’s less, then it may not be unique enough for you to make it without a loss–ego or money wise.

    Six: Add in your profit. Profit is not a six letter word. It’s what makes the world go round. Make profit anything you think you are worth. It could be 1% or 50%, or even more if you are an artist in demand. Without profit, you would be buying a job instead of a business. I know some people who actually pay to have a job, which means they would be ahead if they didn’t work at all! Frankly that’s happened to me at times.

    Seventh: Educate your buyer. Tell them how you made your stuff. Keep rethinking of how you tell you story. Refine it; hone it.

    Eighth: Underpricing kills everyone but it’s a constant in any business. Giving away good stuff is just crazy, and it’s one the most common issues today. If someone thinks my stuff is too expensive, that’s ok. It’s not for them. They are not ‘my people’ so to speak. Sometimes somebody sees my stuff and says: I’ll take it, even though it’s $1000.00–just like that! He/she’s ‘my people’.

    Finally: Perception is everything in many ways. If someone doesn’t see ‘it’ in your product, they probably never will. And that’ ok. Someone else will eventually.

    With all that said, I have to tell you (all of you out there in Esty land) that what I creat and sell is more art than craft. Art pricing is all over the map. I’m talking about new art, not million dollar stuff. So be kind. My stuff is extremely unique and takes a lot of time to make. It does not sell fast. In fact, very slooooow. But that’s Ok. I’m selling me. If I don’t value me at what I think I’m worth, no one else will either. And sometimes if I price something too cheap, it will be thought of as ‘cheap’.

    Good luck, and thanks for reading for what’s it worth.

    mike

    • Claire Bear says:

      “Seventh: Educate your buyer. Tell them how you made your stuff. Keep rethinking of how you tell you story. Refine it; hone it.”

      I agree, look at succesful niche sellers making semi-handmade products. They all give a detailed story about the history of the design of the product and also the effort that goes into making each batch. And they charge HUGE amounts of money for what is basically just really nice soap, for example.

      Sell them the whole story of the item, not just the bit that comes in the post!

  30. Nicely communicated. This has been an issue for me for years. I think your final treasures were very profound. One is tempted to lower prices in tough times, but I know it is not the answer. I have collectors who have supported me through the years and keeping steadily increasing prices helps maintain the perceived value of my work. It helps an artist feel good about their professionalism too.

  31. Wow! Thanks for the information and tips. I appreciate you sharing!

  32. great article. easy read but packed w great info. thanks for the spreadsheet.

    You guys are awesome

  33. Just a note on the spreadsheet I’ve included for download. Please feel free to play around with the numbers, changing them to find numbers that work for you. You can easily change your Labor rate to a different dollar amount that works for you. You can also change the keystone and the Overhead rate. Below are the formulas I’ve used:

    The formula for Labor is =$$*B4 (change $$ for your hourly rate)
    The Overhead formula is =(B3+B7)*0.1 (change 0.1 to meet your needs, this can be 0.05 (5%), 0.15 (15%), etc)
    The formula for Keystone is =B11*3 (can be changed to .5, 1, 2 or whatever else you want)

  34. Thx for a great post! On the spreadsheet I think the labor @ $18 hour cell formula has an error as it is listed as same as $15/hour amount. I tried to edit but cell seems locked…

    Also, I realize things are different everywhere but $6 hour, for an early commentor, is hardly a fair wage (it’s barely minimum). Why wouldn’t you pay yourself more? At least factor in your marketing costs, ie listing fees add up.

    As artists we shouldn’t price to the lowest common denominator; if we do, we completely diminish the value of “handmade” and may as well just send our etsy customers over to Walmart.

  35. What a great article, thank you so much! I was shocked to read (the second time today from 2 diff blogs) that you basically quadruple your price after you factor in time and overhead cost. This is something I have not been doing and will definitely consider. My husband tells me that it is better to overcharge so you can always lower your price later, if you have to, or promote with a sale. Thank you, again, for the help!

    • Claire Bear says:

      “My husband tells me that it is better to overcharge so you can always lower your price later, if you have to, or promote with a sale.”

      EXACTLY :)

  36. I saved the spreadsheet, and was able to change the equations to fit what I wanted to pay myself ($6-$7hr) very easily, and it is still a little more than what I am charging now, and I am going to adjust my pricing up… I think you are right in that we as artists need to appreciate our time more. I am NOT counting marketing, picture taking, and listing time, as it would make my items WAY to expensive. It seems that there is always someone who is selling for less… and as someone on a super tight budget, I often look for the best deal, so it is hard for me to condemn my customers for doing the same. Thank you for posting this valuable and thought provoking content.

  37. While I have learned all this in college Marketing classes, this sort of strategy will not work for me. People are offering the same goods at lesser prices…even less than I can afford to accept. I currently only double my material costs on some of my items…and on others I may add $1 – $2 an hour for the item. Your calculations would have some of my items at over $400 and no one would even think about buying them. The dozen of tea Roses I just listed recently would be at a cost of $528! (and that is only charging $10 an hour for 20 hours) The materials alone cost me approximately $40 on that. While your strategy will work for some, I am not only selling my goods to the extremely rich. I want everyone to be able to enjoy my flowers and trees and I want them to be appreciated. Yes my items should be priced higher…many tell me that. Some say I am too pricey. Yet everytime I increase prices a little, I lose another rare customer who even knows what french beaded flowers are. This is a personal hobby and a stress release for me as well. I love doing it or I would never be in a business where I make virtually no profit. Thanks for sharing your article…it opened some windows of opportunity. Would it be “lame” to actually put in each listing the amout of time it took to create each item? then people could actually see they are getting quite a deal..or STEAL for that matter. Thanks!

    • Jill- Thank you for your comments. I just checked out your shop and your work is absolutely gorgeous! I design and create my own jewelry and I cannot imagine how much time and effort it takes to make your flowers. I think you are definitely selling yourself short with your pricing. The tea roses you discuss that are for sale for $100, how much time did those take? Obviously you know your customers and your market, and you have to charge what you (and only you) are comfortable with. But I think you could easily go up to at least $150 for that set.

      I don’t want to be another pushy person telling you what to do. But I think it’s perfectly acceptable to state how much time it took you to make them. You can maybe find a crafty way of putting it… but there is nothing lame about making a profit and getting what you deserve! Good luck, and, again, you have beautiful work!

    • “Would it be “lame” to actually put in each listing the amout of time it took to create each item?”
      Absolutely not, Jill, telling your customers the story of how their tea roses are “born” should be part of your marketing stratergy as it is part of what makes them unique. If it takes 20 hours of careful hand creating, then the completed article should be valued more highly than if they can be thrown together in a few minutes.
      Admittedly, for me they would be aspirational and inspirational, but if I enthuse about your roses to people that I know, they may also love them AND HAVE MONEY TO SPEND!!

      • Jill – I just popped over to your Etsy site. Wow, amazing work. I would certainly list how much time is spent putting together each piece. I would spend more money on something so beautiful that someone took so much time to make than on something cheaper that I can find all over the place.

  38. hi. thank you so much for this smart, detailed guidance on pricing. i could not agree with you more that when some in our community undervalue their work vastly, it affects us all; shoppers must come to see handmade as valuable, otherwise why not just buy at walmart?

    anyway, i wanted to point out one thing to look into. on the spreadsheet, which i’ve downloaded b/c it’s much more efficient than mine, i noticed “Labor @$18/hour” ends up being the same amount as “Labor at $15″ — does this formula cell need to be updated (should be $4.5, not $3.5)?

    thank you again. really appreciate the time you put into this.

  39. This article is so helpful in giving me a formula to work regarding all my creative outlets. I paint as well as make jewelry and I was never to sure what to charge for my product. This blog has given me new insight on what to charge my customer as a fair price. This also works for my crafts shows and the shops I sell my product. Thank you. Please keep us informed of any other information which would make us excel in our businesses.

  40. Thanks for the information on pricing. I use a similar formula for my shop. I also keep the listings of similar products into mind when putting in a list price. Not sure if my strategy works since I am a newer member of Etsy and haven’t made any sales yet. It is nice to know that my pricing is not insane.

    • I don’t think being new should make too much of a difference if your tags, description, photos and such are good, since the search is based on most recent listing rather than popularity.

  41. Many, myself included, have commented that this price strategy might not work for their items, at least without some modification. However, let me also point out that may of us on Etsy are “crafty” types who can look at other people’s work and say to ourselves, “I could make that for 1/4 of the selling price”! keep in mind that your target audience is not the people who are able or inclined to make it themselves, and are willing to pay someone else a fair wage for doing the work. Don’t sell yourself too short!

  42. This article was extremely well written- Very easy to follow, examples were thoughtfully chosen and made the point you were trying to make, and your excel download is wonderful! Thank-you for taking the time to help others be as professional as you are! Thank-you for helping ME become more professional!

  43. BOOKMARK !!!

  44. I believe that your way of calculating the prices is reasonable but not realistic, that is to say, what you propose would be the desirable price and profit and it is the right value that it should have the designed and handmade product, but, there is a sufficient public who could allow him these prices though he thinks that the product really costs it? I´m in Etsy only two months ago and still nothing, I know that it depends not only on the price or the product but also I´ve been participating in street fairs for long time and at least in Barcelona I don´t see clear the situation. However thanks for the info I do hope I could put it into practice in the future.

  45. I personally think it’s to much to multiply the ‘total costs’ twice by 2. If I do so, my felted bags would be too expensive to buy; $ 300 to $400!!! I consider labor also as profit, my boss also pays me labor hours and not more. I think dupication of the price is nessessary for shops who sell other peoples products, so they also have profit, although they didn’t put any labor in it.

  46. I agree with Mona-it takes me forever to photograph my necklaces and get things posted online. I feel like maybe I have been undercharging, at the same time I have a new shop so I want there to be some action and feel like lower prices might produce some sales. Kind of tricky but something to think about-good article!

  47. wow.. thank you for the great tips! I was having a trouble on how to price my artworks. I tried with the recommended equation, but I’m not sure whether it suits my series of works.. the price that I’ve updated in my etsy haven’t even include the man hours which I’ve used to paint on paper/computer. oh dear..

  48. Sellers should figure in not only the time it takes to make the item, but also the time it takes to photograph, edit, write the descriptions and post the items. The time it takes to market your item is lost production time and has a value as well.

    • This is such a great tip, thank you for sharing! I didn’t even think of the cost it takes to post and promote your product! Thank you!! :)

  49. I’ve been fighting with my pricing for several months. Selling online Definitely keeps people who sell similar items competitive. Tiered pricing takes some of the heat off of being competitive and gives me an arena to “test” price increases. If I have a large range of prices I can increase prices at a snails pace and it’s not such a surprise to my customers, and I slowly get closer to getting paid what my items are worth. My competition has also come slowly up above and behind me after the waters have been tested.
    I’m also looking for new opportunities off the internet to sell goods and play with pricing. Sometimes it’s easy to forget the majority of people don’t shop online;)

  50. Thank you so much for writing this article! This helps get artists on the same page for pricing and now we can all make a profit! Woohoo!

  51. To all you English majors who have pointed out my grammatical errors – Thanks! I’ve fixed the errors. It’s always great to have a lot of eyes looking at your information.

    To those who have defended my grammatical errors – YOU ROCK!

  52. Nice article.
    I would like to add that if you think that you can’t get the price that you need from your current customers, then you are targeting the wrong customers.
    There is an abundance of people that are willing to spend anything that you ask for something that they can only get from you.
    People spend thousands of dollars for an ugly bag with a brand name on it, just because they want something that someone else can’t afford.
    There is no reason that they shouldn’t buy your product.
    Listing on Etsy is not the only way to sell your work.

  53. I think this article was great. I used to work for an e-commerce company and this was exactly what we used to price our products.

    I have raised my prices a lot over the past 6+ months I’ve had my etsy shop. I learned the hard way that customers looking for a deal are usually the worst ones to work with! Now, my prices are a little on the high side, but still fair, and it keeps out all the riff-raff. :)

    • very true. the point is not to get more customers but to get more profit and you do that by getting quality customers that are willing to pay what your item is worth. they are also less maintenance than your nickel and dime customers.

  54. Shiny Rabbit (Cynthia) says:

    Great and helpful article but I also agree – grammar makes a difference in getting the desired readership and also making sure the focus is on your content. Both should be a priority somewhere in your development plan. Spell check and grammar check are important to employ *but* more important are great posts with useful information! You can see by the comments that people have picked up on the grammar but you can take it out of the reply equation by addressing it at some point when you are up to the task.

    I think this is a really wonderful blog, yes ok, needing some manicuring on the grammar but certainly the information is so good most will overlook it. :) Just keep growing and learning and enhancing your product by taking on feedback when offered – that’s the way I look at the development of my work/brand also.

    Good job! The article was included in Etsy mail outs for a good reason :) The rest are gravy fixings :)

    P.S this article has made me rethink my own pricing strategy! Thank you!

  55. This is a clear and well explained article. I can’t agree more with your final treasures. However, like Naomi, According to the formula above, by best selling item that I sell for $14 should be $37.4 for wholesale and $74.8 for retail (both using 2 as keystones) if I pay myself the minimum $12 hr. For price of $14, I am paid $4 hr. I really don’t see that happening any time soon either!

    • Every product is different and when it comes to handmade it’s not always clear, cut to the point. If you are happy with your price and getting the sales you are marketing for, then I wouldn’t change a thing.

      Good Luck!

    • I am in the same boat. I offer products for $25 which an average equation says I should be selling for around $70. There is no way, profit or not, I could ask for that much. I usually cut out the “pay yourself for your time” and it works out

  56. I’ve been slowly increasing my prices to be more fair to myself, and have only seen sales decrease to nothing. And according to this calculator my dolls should be priced around $50, not $20, and I don’t think that’s realistic. Oh well.

    • I had a look at your work and I think for hand made products you are selling cheaper than I would expect to pay. Maybe there is a middle ground? Like the writer said, there’s no one formula and I found that my formula (similar to this one) suited only the practical aspect of making my products NOT the designer aspect and certainly did not address the customer base I wanted to attract.

      I did a couple of markets and last market another stall owner (who was making a killing selling kids tutus (imported) for $40 a pop, pulled me aside and said “luv, your prices are too cheap”. This plus the article has made me rethink the area of ‘value’ -the formula isn’t right for me other than as an indication of a bottom line, but the concept of thinking about personal/public value and perception of my brand has. I’m going to be doing some rethinking about this…. I hope you can find a suitable formula for your own work for more success!

      Cynth :)

  57. Oh my gosh! I have needed help with pricing since I opened my shop a year ago and this is so helpful!! I need to make some changes right away. I was wondering where you figure your time for searching and ordering supplies, taking photos, listing, and packaging. Also, what about the Etsy and Paypal fees? Are they covered in the retail amount? Thank you for sharing this valuable information.

    • Lee;

      The Paypal and the Etsy fee are included in the “overhead” fees. As for your time spent searching for materials, that may be a bit more difficult to figure out per piece. I would be inclined to include is as part of my overhead fees and use the higher 15%.

      Good Luck!

  58. i’ve begun making items for a shop i hope yo open soon. my material costs are negligible, but it takes about an hour or more to make each item. the math you suggest would yield a wholesale price of about $30 and a retail cost of $60 to $90- for an embroidered hair clip. My work is more detailed than a lot of what I see already listed on Etsy, so I can see asking for more than the price of similar articles, but not $30! Does this mean I abandon my idea of a fair market price for the finished product and charge the higher amount, or somehow change my product to take less time or change to more expensive materials so the finished product will have a higher perceived value?

    • That’s hope *to* open soon, sorry.

      • Hi Carrie;

        As I mentioned in the article, you need to choose a strategy that works best for you. The calculator should be used as a guide. If I were you I would do a two test listings with similar products: one at the higher price and one at a lower price (a price you believe that would make your product a hot seller) – then see what type of response both get. You can do this before you officially open your shop.

        • Hi Anarchyinbeauty
          How would I go about with setting up test listings?
          Thanks for your help!

          • Sandra, You can create test listings as you would a regular listing. Create two listings for the same product, with different titles and different prices. In the quantity only offer 1 for each so your test will cost all of $0.40.

            For the high cost listing add more detail to your description to the lower cost item add less detail.

            Run them at the same time for about a week and be sure to promote, promote promote and see which one gets more views.

  59. Thanks for this! I have been using a similar formula for some time now. At first, it resulted in prices that felt “high” to me, but I quickly found that my target market finds my prices to be “just right”.
    We as artists and craftspersons need to all price our work appropriately, considering time, materials, expertise, AND profit. If we all value our work properly, others will too and it benefits our community as a whole as well.
    Thanks again.
    :)
    Christina (aka “The Beaded Tortoise”)

  60. thanks for taking the time to share this valuable information! This is very useful and will come in handy!

  61. This is a wonderfully clear piece of work. Thank you. I have similar workings but they are nowhere near as neat! Good to know that I’m on the right track. Would love to be a member of ecoetsy too.

  62. According to the formula above, by best selling item that I sell for 17.99 should be selling for $130.00 if I pay myself the minimum $12 hr. I really don’t see that happening any time soon!

  63. Even though I already knew most of this information, it is still great to be reminded once in a while about what the whole process of pricing entails because very often we forget and just put a price on our items “by ear”. Which is wrong!

    Thank you for sharing!

  64. Thank you so much for all this useful information. I struggle constantly with pricing my items. I see similar things going for either cut throat prices or for 2-3x what I’m selling mine for and I never know where I should be on that scale. Thank you for taking the time to not only explain things but to make a calculator for it that is so simple to use!!!

  65. Great information. Thank you

  66. To the people that wrote comments on the bad grammar – The purpose of the article is to help with pricing, not teach proper English. Leave them alone!

  67. Thank you for this very helpful article. After using your calculator I was pleased to find my prices were close to what my “retail” should be. I’m sure I could’ve charged an extra $2 more on some things but at least I wasn’t under-valuing myself. My shop is still quite new and this is just the info I need to take it to next level! Thanks!

  68. Thanks so much, all listed are really true scenarios, Lots of wonderful information on calculating costs and profits. I usually look at com parables on the web as well on etsy to get an average price so I am not so far out of the water that I can swim with the fishies too…Thanks for sharing!!

  69. There are so many grammatical and language errors in this article it undermines it’s credibility.

    “Now, it would be behoove you” – leave out the ‘be’
    “Customers who buy from you because of price is not YOUR customers” – are not your customers
    “If business is bad cutting prices could make it WORST” – worse

    • Oh come on…be nice. :) It’s a great article with valuable information.

    • hehe you, too, have a grammatical error in your post! no one is perfect.

      (you used “it’s” instead of “its”)….

      • julieanne says:

        It’s was right! shortening of ‘it is’!

        • Emily is right! If “it’s” is right, then it would read: “… it undermines it is credibility”. So it must be “its”.

          I agree though that this article is for the wonderful content that it contains, not to be held up to ridicule for any grammatical errors. I feel fortunate to be able to benefit from her knowledge on a subject that I have been struggling with.

    • If it were an article about grammar, I would agree with you. But it’s not. Also, you might want to make sure your grammar is correct when posting such a comment.

    • Ailsa… Your opinion is better left to private emails as it lacks tact and good manners. Your post is an example of how no good deed goes unpunished. I found the article to be quite easy to understand, and extremely helpful. I’m grateful that there are still people out there who care enough to take the time to help others.

      • Also, as an American living in W.A. and married to a POM, I have to point out that Americans speak a different dialect of English than Aussies or Brits. I get so very weary of being corrected for my different spelling, speech patterns, and word usage. Where I come from the phrase “Far Out” means something is good. American English has evolved and our children don’t sound like our grandparents.

  70. Thanks for the love. I hope the spreadsheet is useful. Would love to hear your pricing stories. Have you changed the way you price your item? Do you think you should be charging more?

  71. Love this article, this is actually something very similar to our spread sheets we use to calculate pricing and such.

    Thanks for sharing

  72. Great info and very very helpful indeed… I need to get materials that at a better price!

  73. Hey, I found a few grammatical errors in your article, one being: “I mean, let’s face it, you didn’t open your Etsy shop to give your product way…” “Way” should be “Away.” Other than that, great article! Very thorough. I wish I could find some sort of formula for my service.

  74. Very cool and full of 411. THANK YOU!!!!!

  75. MorgansDead says:

    I think with my jewelry and small things like that, this is perfect. However, my scarves I make take quite a bit of time and according to this work sheet, my cost alone is over $50. I know charging less does not guarantee sales, as my slump implies, but I just can’t bring myself to charge that much for $7 worth of supplies. However, my husband watched me make one and looked at my current pricing and told me to increase it by $5 to cover more of my time (though as I make my scarves and hats, I watch tv, so it’s not all work lol)

    • MorgansDead

      Please love yourself and value your time more! Even though you are watching tv (I do too), you are still investing yourself in your work. I use recycled materials, which cost me almost nothing, but I can still get up to $175 for a handbag. People who buy hand crafted goods need to come to expect to pay fair prices for them. If you are giving away your time, you are undermining all other crafters’ and artists’ efforts to get a fair price, and cheating yourself.

  76. Hello,

    I am a newbie in Eco Etsy Team and I am slowly making progress with catching up with every thing going on in this amazing group of mind like people / designers.
    This article caught my eyes, (as many of you already since I am # 16 in the comment box…) But somehow, even after signing in… I just can’t make it work – “as is”.
    I can not erase your data and put mine in…
    Maybe it is the way it was meant to be??
    But your nice explanation says differently…
    Can you help me out here….????!!!

    Thank you very much !

    • MorgansDead says:

      To make it work you actually have to download it and open the actual Excel file. I just discovered this myself.

  77. what an amazing post! this is the most thorough explanation of pricing i’ve seen, and i will definitely be back to refer to it.

  78. great article! thanks for sharing:)

  79. What a great post! Explained very well and very clearly. I really appreciate the spreadsheet at the end. Pricing has given me a lot of angst – this helps a great deal. Thanks!

  80. great post ..such great info..I have such a hard time with this…

  81. Thanks for such a fantastic article on a subject I’ve also struggled with in the past. Its always nice to know I’m not alone in being clueless as to how to price my products. I’ll be downloading & using that spreadsheet for sure! Thanks again :-)

  82. Thanks for this great article. so many etsy seller underprice their work greatly and hurt not only themselves with it – it effects all the other sellers as well.
    I do value my time and my unique creations and it has to feel fair for all parties (and here I mean me, the buyer and the product). I found over the years if I underpriced a product it did often not sell. I call it insult on the creation – it deserved more value.
    People get courageous and value your time, your creativity and your whole being with fair payment. You get what you ask for if it is fair.

  83. This is by far, the useful-est thing I’ve read in a darned long time. Thank you for sharing your expertise with us!!

  84. Good points here, thanks for a great article!
    I think it all starts from ourselves as makers, crafters, designers, artists. When I value my own work by setting the fair price to cover my expenses and even little more other people are [hopefully] able to see that value in return. However, it is a never-ending battle to find the right price AND right customers. So many things (for example cultural traditions) affect the pricing process. Also, potential customers don’t always understand that working on recycled materials almost always costs more in labor which naturally affects the end price.

  85. Thanks for all the comments. I received an email asking what a “keystone” is. Put simple its a method of doubling or tripling the wholesale price to ensure you cover costs and make a profit. The price you come up with after keystoning should be used as a guide thus the “safe price range in the post. Hope this helps.

  86. Myra,

    What a thoroughly researched article. We are so lucky to have you do the hard work for us. Thank you so much for writing this important part of the equation for our business.

  87. such great pricing information all in one well-written post! thanks! I’ll definitely be giving that spreadsheet a try.

  88. Thank you so much for the spreadsheet! I’m so excited to try it out.

  89. I am with the two above comments. I have just changed the pricing strategy for my shop after realizing I was not valuing myself as an artist enough. I think often we can undervalue ourselves and worry so much about quantity we forget about the grand quality that handmade work usually holds. So, thanks for the encouragement and thank you for the tools for pricing. I will be downloading that spreadsheet and using it from now on.

    Lauren
    http://www.howtoreuseitcreatively.com
    http://www.upcycledunlimited.com

  90. A very well-written article, thanks for sharing it. Since I work with recycled materials, my material cost is low but the prep work needed to turn a wool coat into a piece of felt takes time…time that I don’t often figure into my costs. I also realize that I have a “midwest” idea of “fair value” in my head and often underprice my work. I’m working on finding a balance and you’ve given me some good information to consider. Thank you.

  91. This is so timely! I’ll be checking out and tinkering with your spreadsheet. Thanks for the good solid (but gentle) push on remembering to include our time in pricing. I think so many sellers don’t account for their time – and that’s a crime!

    • It is true I don’t think about the time. i can’t. People could care less My angels take 3 or more hours to make all depending on the design. I just feel if people will buy a factory one for 10 why can’t I get the same? Still people love my angels but friends say I should go lower to get more sales. They have no idea how much time I put into them. I love making them and why else would I be will to work for $2 an hour?