Hall of Finished Projects 2016-All

Sunday, August 31, 2014

Price of Handmade Items Explanation

    There are a lot of non-crafters out there who do not seem to understand how much things cost and have a problem with my prices in Tangledmania Shoppe on Etsy. So this is an article breaking down how some people, and how I, come up with the prices to sell what we make.

   First we have yarn and that cost varies. Most of the items in my shop are made of of some degree of wool or alpaca yarn. This is more expensive than acrylic, but not by much these days. I was at Joann's Fabric last week looking around and saw Simply Soft go for $4.49 a skein, and it usually takes 12 to make a blanket. So right there, before taxes or labor, it costs $53.88 to make a blanket with Simply Soft. 

   Now I like Simply Soft, it's what I used for a very long time. But you know what's better? The warmth on a winter afternoon of wool and alpaca, it is just plain warmer and wears better than acrylic. Even my favorite acrylic Berroco Comfort which goes for $6.50 a skein at Webs (or yarn.com). I have a love affair with Berroco, I simply adore their various yarns and they are probably considered midline for cost compared to some other yarns. 
  
  For example, the Striped Shawl for sale at my shop, usually priced at $50 is made up of Berroco Ultra Alpaca Fine, which is wool, alpaca and nylon. I used two different colors, so two skeins that are priced at $12 dollars a piece. So I spent $24 on yarn for that shawl. It took me a week to make it, but a total of 21 or so hours all together. I set the normal price at $50, like I said, which leaves $26 for labor. That is little more than a dollar an hour. But I want to make it relatively affordable, so I simply double the price of the yarn, roughly and there you have it. I honestly do not believe I am being unreasonable.
 

  Some schools of thought believe that you should charge for supplies the following way: 
Materials + Labor + Expenses + Profit = Wholesale x 2 = Retail (found here on this etsy blog)

If I did my pricing this way, this is how my prices would work out: 
Materials: $24
Labor:      21 hours at minimum wage? Let's say $7 an hour to just say it. 21x7= $147 (see it adding up already?)
Expenses: for just this item is probably around $2.00, not too high.
Profit: I do not have a job, though I'm looking for one every day, so I am trying to pay bills and put a dent in food for my kids and me.  so be kind. That is why I simply do double materials for profit, so $26.
This is how it breaks down:
     24
   147
        2
  + 26
=$199x2: $398

  Am I going to charge this much, $398 for a shawl? Of course not!! I charge what yarn cost me, possibly the pattern (if relevant, in this case it wasn't), and double it for some profit so that I can buy more yarn to make more stuff to sell and so that I can pay some bills. 

  So the next time you have a problem with how much people charge for what they make, consider the fact that they aren't really charging in a way that is really sustainable.  This is handmade, people. You can request so many changed details and it's unique, all handmade items are.  I'm trying to bring in some extra cash, to help support my family. I adore to knit, it's what I'm passionate about. If you want to learn, just ask me. :D