Whether you’re a sewing enthusiast or avid crafter, why not sell your DIY projects to earn some extra income? If you’re considering taking your hobby to the next level, it is time to decide how you will price your products.
Pricing is notoriously one of the biggest challenges for new business owners. If your price is too low, you won’t make a profit. If your price is too high, your customers will go elsewhere. It’s a fine line to walk, but we are here to help you price your handmade products.
While you may enjoy crafting and be selling for fun, it is important not to undervalue your work. After all, your creations take time and cost money to make- having fun while creating them is just an added benefit.
There are many pricing formulas to experiment with. However when selling your handmade products, it’s important to consider the cost of not only your materials but also your time.
This blog will mention how to price a handmade product and what factors you should consider when doing so.
Work out material costs
First and foremost, you should work out the costs of your materials. This includes the cost of fabric but can also include labels, buttons, string, and swing tags. Remember to calculate the cost of postage, packaging materials, and wastage.
By figuring out the cost of your base production, you know how much it costs you to make one item. This lets you know the minimum amount you can charge for your handmade product without making a loss.
If you decide to add extra items to an order, for example, business cards or thank you notes, ensure you’ve also consider your printing expenses.
Essentially, your production costs should include everything you spend to get your handmade product ready for sale, from fabric and buttons to packaging and labels.
Work out your labour costs
Your labour costs are what you decide to charge for your time. This is essentially your wage for every hour it takes you to complete a product.
This does not only include the time you spend physically creating your products but also any other business-related tasks, such as taking pictures and uploading products to the marketplace.
Labour costs can also include time spent packing orders, time spent answering queries, equipment repairs, and time spent updating your online store. It is important to keep track of these hours to ensure you get paid.
Traditionally, labour costs are calculated by using the formula: manufacturing time x hourly rate. For example, if a product takes you two hours to make and your hourly rate is £10 per hour, your labour costs will be £20.
However, you can manually calculate your labour costs for each item if preferred.
Research the market
Calculating your production and labour costs will help you price your products to ensure you make a profit, but by researching the market you can identify what other sellers are charging for similar products.
Using this information, you can adjust your product mark ups accordingly. Important questions to ask at this stage include:
- How much are competitors selling their products for?
- How does the quality of fabric compare?
- Are they using sustainable or organic fabric to justify a higher price?
- Do they include shipping in their price?
- Do they provide extra value to the customer? If so, how?
Although it is useful to research your competitors’ pricing strategy, your price should reflect the quality of your creations. Consumers tend to value high-quality products over cheaper, poorly made alternatives. If your price is too low, customers may feel your product lacks the quality they are looking for.
Test your pricing strategy
As we’ve already mentioned, pricing is one of the biggest challenges for new business owners, so don’t worry too much about getting it right the first time.
If you are looking to turn your passion into a profitable business, it’s important to spend time testing and refining your pricing strategy.
When starting out, reviewing your pricing every month or so works well. If you notice an increase in your production costs, ensure to reflect this in your price.
As with everything in life, pricing your handmade products often requires trial and error. Most online marketplace platforms are low cost to use if you are not selling many products, giving you plenty of room to test and learn what works.
So, why not give it a go and see what happens?
Why choose Discount Fabrics?
At Discount Fabrics, we have one of the largest selections of high-quality fabrics and haberdashery in the UK. With competitive pricing, for the last 30 years, we have made crafting accessible to all and help to keep your production costs low.
Whether you sew quilted blankets, cushion covers, tote bags, or something else, our family-run business supplies a range of fabrics suitable for all your DIY creations.
We pride ourselves on providing a personal experience with first-class customer service. With free UK delivery, international shipping, and generous multibuy bulk discounts, we deliver your fabric from our Leicester warehouse straight to your door. Buying fabric online has never been easier.
If you have any questions about our fabric offering, crafting, or how to price your handmade products, please don’t hesitate to get in touch. You can contact us by completing an online form, or by giving us a call.
Ready to read more about all things fabric? Then, be sure to check out our latest blog posts!