Selling Handmade- tips for people who want to sell the stuff they make from someone who sells stuff they make.
I sell crochet and crochet-related things, so while this post will have some things that you can apply to any handmade product, there will probably be some things that you can’t. So if you sell beaded things, or fine art, please feel free to chime in with your tips at the bottom!
First of all, pick a formula that you will apply to everything you make, so that you’re not just pulling numbers out of your ass. Etsy’s rather optimistic selling formula is something like, cost of materials+timex4, with wholesale pricing being half of that.
This does not work with fiber arts, unless you have an established business and people know that they’re paying good money for fabulous quality.
So what is my formula? I pay myself for my time and my cost of materials (and I know other fiber artists who do the same). I tend to use less pricey yarn, and not very much of it, so typically my “materials” cost is only a dollar or two, or even less (except when I use novelty yarns, or more pricey yarn). I used to pay myself $7.50/hour, which is slightly more than US federal minimum wage.
However. My time is worth more than that. I’m not the most skilled fiber artist on the planet, but I deserve more than slightly over minimum wage. And this is where the problem comes in.
A lot of the people who sell fiber arts products, sell them as hobbyists, so you’ll see a scarf that probably took 2-3 hours to make listed for $12. Or less. A lot of people balk at the idea of paying $30 for a handmade scarf when they can find a similar handmade one for less than half the cost, and that’s not even touching the old, “I can get one of those at (insert big box store here) for $5.00,” which handmade sellers run into CONSTANTLY. That’s not to say that there’s not a buyer for your $30 scarf, but they’re going to be a little harder to find.
So, what do you do? You can undervalue yourself. You will probably sell more, but at some point you’ll probably run into the feeling that you’re overworked and underpaid.
Or, you can price reasonably, knowing that there are people who understand that if you believe your time is worth more, your product will probably be better quality. And, of course, you’ll need to back this up with a good quality product. This will likely mean less sales, but it’ll mean that the sales you do get will have more profit.
Finding a niche will help. Find something that no one else (or very few people) make, and make it. If you get successful with it, other people will probably start making the same thing, and some of them will likely undercut you. Then you will need to decide what to do- whether to keep selling them at the original price, drop your price to stay competitive, or take yourself off the market. And that’s a decision only you can make. While this can be frustrating, this is just another part of business.
You also need to take your target market into consideration when you price. If you’re pricing your product towards college students, and your product itself is more suited to upper middle-class business people, you’re not going to be very successful. Do market research. Find out who your target market is, research what they buy, how much they typically pay, and where they buy so that you can price and then advertise yourself appropriately.
I’ll end here with personal experience. I started out undervaluing myself, believing that no one would pay (insert reasonable price) for my product. This is a very common belief for sellers starting out, VERY common. I got rather a lot of sales last holiday season, but I burned out to the point that I took all of the made-to-order items out of my shop and really don’t enjoy making the types of things that I was making anymore- overworked and underpaid indeed! I have learned since then that not only was I not paying myself a fair price, but I was also going about it the wrong way. Worsted weight and an H hook will take quite a bit more time to make a scarf than chunky weight and a J or K hook for a scarf the same length. Different stitches take more or less time. So pay yourself fairly and use your time wisely!
Edit: Megan has some excellent suggestions on how to price around time-intensive items, read them here!