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Blogs for creatives who are looking to turn their handmade hobby into a productive and successful handmade business.

Filtering by Tag: Product Pricing

What to do when someone says your products are too expensive.

Kerri Tutton


It is inevitable that at some point your handmade creations will be criticised and price will be the target. What happens after you receive this feedback is key to your future successes and mastering a confident mindset about your product range.

It will be easy to take this feedback personally.  This will be because it is your business, these are your products and you have made them yourself.  Remind yourself, this is business - it is a material, a product not a dig at you. Try not to take it personally and instead ask questions.

"It's too expensive" they say, so in your mind ask yourself, "what they are comparing my product to"? 

Are they used to purchasing imported, mass produced products from the high street, made from cheaper materials?

This happened to me when I ran my jewellery business.  A friend told me that my prices were too high and that she considered my range expensive.  When I dived deeper into where her feedback was coming from, I realised she was comparing my product to the $5 and $10 earrings she was buying from a national jewellery retailer who imported all their products in from overseas.  

Not only that, they were not in any way shape or form, unique.  There was at least 50 of the same item on the shelfs and I anticipated more in stock.  The materials used were light plastic and acrylic with base metal components, compared to the Swarovski glass pearls and sterling silver I had used to make my product.

Are they comparing your product price with their lacking in financial confidence?

More often or not the use of the word 'expensive' arises when someone doesn't have enough funds to purchase what they really want or they may be prioritising other needs first. They may use the words, 'expensive' when they actually mean: 'I can't afford it at the moment'.   Your customer may have financial commitments that they need to prioritise and they are simply window shopping.  Wouldn't it be silly to get upset thinking your product was too expensive then slashing your prices after this type of customer had unknowingly to you compared your product pricing with their bank balance? 

Some people hold emotions with money and items that are considered a luxury so it is also possible that whilst your shopper can afford your product,  they may not find themselves worthy of purchasing your product. (perhaps they don't think they deserve it).

They are not familiar with your craft

This is your opportunity to share a story on how your products are made.  People love a story and when they realise how much love and effort has gone into making your product a new level of appreciation is created.  

They are not your customer

Customer profiling is super important.  If you haven't defined your ideal customer for your product and business yet, consider doing this sooner rather than later.  

You want to ensure you are getting your product in front of the right people. By analysing your customers behaviours and hangouts, you can get your product in the right environment.

Getting consistent feedback of 'too expensive' may indicate that you may need to consider changing 'where' you are selling your product from. For example: Perhaps you are attempting to sell $75+ items at a market stall where the average market spend is $25?  Would your products be best suited to a boutique / exhibition shop / high end retail outlet?

In summary, try not to lose hope or allow your confidence to be knocked by such a comment. Return to researching your ideal customer and ensure you are in the right place presenting your products to them.

Have you experienced someone labelling your prices as too expensive? How did you deal with the situation?

What Should I Charge For Labour Costs In My Handmade Biz?

Kerri Tutton


This is a SUPER DOOPER question and one that challenges many of us creatives.  

Firstly though, the fact that you have asked this question is fabulous so give yourself a pat on the back, as it means that you are thinking about your business product pricing seriously and you are not giving away your handmade products as a labour of love. (which is also fine btw - if you are running a hobby not a business).

So where to start?

For those of you that already have a job and your goal is to replace the day job, you may choose to use your current hourly rate to start with.  For those not earning what they want to earn, you may jump to calculating the hourly rate from a salary that takes your fancy.

Some of you may feel a bit awky about choosing an hourly rate, so your option is to add on a profit amount - go careful with this though as some of your handmade creations may take longer to make than others, you do want to have some consistency with your pricing to encourage your customers to trust they are getting a fair price.

Another option is to research what it would cost your business if you were to take on a staff member. Especially if you have a longterm goal to grow, you may need to consider at some stage paying an hourly rate, GST or VAT and Superannuation contributions perhaps.

Which ever way you choose to select your rate, the most important part now is to ensure you are incorporating the charges for the time you spend creating your product into your 'Cost Price'.  

Now for some of you, you may have lots of different techniques that you may need to consider.  As a jewellery maker I would often find that the time I spent on a new technique/design would often shorten the more I practiced, so be sure to re-asses the timing of your labour, to ensure you are charging correctly.

Then when you feel that you are more experience, you may decide to increase your rate (you are after all the boss now, so don't forget to give yourself a pay rise).

Once you have established your business and you want to move to the next phase, it would even be worth your while to consider other labour costs to your business such as time spent on:

  • Packaging
  • Quality Assurance Testing
  • Taking Product Photographs 
  • Listing Products
  • Delivering Products to the Post Office
  • Financials
  • Procurement of Business Materials
  • Conference and Meetings

Remember your day job, there is someone being paid to do all of the above, don't think for a minute that just because you are running a handmade business that you don't qualify to charge for it as well, just remember, who would you be paying if you had a staff member to do your job!

That's right - make sure you pay yourself and know your worth.

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How Do I Price My Handmade Products?

Kerri Tutton

Handmade Biz Planner Blog How do I price my handmade products?

So in this blog I will share with you some basic information on how you can price your handmade products, using a simple formula to achieve your retail and wholesale price.

Now there are a few things that can effect your price and I'm not just talking about the obvious items like material rates and time spent making and postage, so I am going to suggest you read a couple of other interesting articles to help you with some of the not so obvious but very valid 'money stuff'

The first one that will be super beneficial to you is 'How is your relationship with Money effecting your business decisions' as this addresses your underlying thoughts and attitudes you may have about affordability which could play havoc with the way you price or discount your products.

Another tough cookie to overcome, is to ensure you put a line in the sand between the damaging emotional turmoil when we get caught in 'The Comparison Trap'. Again, this can have an impact on our pricing due if our self worth drops too low and its looking for outlets - your price tags!

The Basic Product Price Formula

This formula is a simple and basic one to get you started in your small business.  Later when you are ready to take your business to the next level, you should read The Professional Product Price formula as this will incorporate the costs of running your business (which you won't have just yet if you have only just started out).

  • Cost of Materials + Labour Cost = Cost Price
  • Cost Price x 2 = Wholesale Price
  • Wholesale Price x 2 = Retail Price

Cost Price 

The Cost price is the total price of how much it was to make your product.  This is a combination of adding up the costs of all the components in your piece to the labour involved making it.         Let's say your making a pair of beaded earrings and the components total is $2.50.

To work out the labour costs, you need to know your hourly rate and the time it took to make your piece.  Say you choose to pay yourself a $30 per hour rate and the wire wrap earrings you
make take 15 minutes to create, tag + pack.  This would make the labour cost for this product $7.50.  

Materials Price at $2.50 + Labour Cost at $7.50 = Cost Price of $10.00
NOTE: The above info also tells you that you can make 4 pairs of earrings an hour so if you get a wholesale bulk order of 20 pairs of these earrings, you know to allot 5 hours to make them.

Wholesale Price

You now have the foundation to create your wholesale price, this is the price you sell to a store owner who perhaps wants to buy your products in bulk.  They would then sell your products at their retail price.

Now the basic product price formula suggests to multiply your cost price by 2 and sell this pair of earrings for $20 wholesale.  This gives you $10 to cover the cost of making them and you now have another $10 in your pocket.  

Retail Price

The retail price is what the customer pays who visits you at your market stall or your online stall. If you decided to sell direct to your customer, you would take your wholesale price and x 2 and sell the same earrings for $40. Putting $10 to cover the cost and $30 in your pocket.

Now the decision comes down to you on if you wish to sell wholesale or retail or both.  Many creators will think, 'well why don't I just sell retail as I make more money?' This is true, however if you are a new business you may not have a following yet to make those sales.  Plus the benefit of selling wholesale is that your buyer will purchase a larger quality in one go.

The other benefit is that the lovely boutique shop down the road may have been operating for longer than you they have a following of regular customers.  By getting your product in front of those customer, you could entice some of those customers to buy your product there and then come to you direct next time.  

Be flexible and research

Overall my recommendation to you regarding your pricing is to be confident about your product, remember you are a business and be  fluid with your price.

Remember to use a variety of external factors too,  research other similar products, connect with your ideal customer spending habits and get feedback from trusted sources.

The last tip, is to revisit your pricing on a regular basis. Trends change, rates of materials and postage changes too, avoid getting caught out with diminished profits because it wasn't on your retro list.

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