How to Price Handmade Items?
The handmade item industry is prospering every year. Small and big companies have entered this market to compete with each other by making their product even more alluring and durable. This also enables the maker to price the product properly.
Every handmade item is different, so pricing these items can be a hard task as YOU don’t want to set your prices too low to have losses or set prices immoderate to let your competitor gain an advantage over it.
A lot of new handmade items makers who haven’t registered the business panic themselves into competing with prices. As not every handmade product would sell makers even sell it under their profit margins.
From a small individual to a mid-size handmade item-making company, everyone has to convert their love and compassion to a profitable business. Crafters price their product on the investments they made and hours of making of the particular product.
The Right Way to Price Handmade Items.
The basic way to price your handmade item is to cover all the investments made while making your product and running your business. Then you should add profit margin over the products, as these products are not mass-produced there is no role of a wholesaler in the sale of goods.
Here we will take an example of pricing a product for a month-long period.
THREE ‘A’s TO PRICE YOUR HANDMADE PRODUCT
Add Cover Costs
You must make sure your product should also pay you back. Throughout the process, makers should be getting their investments money back to be able to make more products. These costs should be near your price start and not just somewhere around production cost.
Profits should always be calculated and then placed over a product, and not randomly pilling any number over your product. Adding profits lets you make money every time you sell your handmade commodity and lets your business stay alive.
The company’s goodwill should be taken into account while adding profit margins, as renowned companies have the comfort to sell their products at a higher price because of their good image.
Markup allows you to let customers have discounts and offers over products, this gives your handmade item business extra padding. You should decide how much markup will let your product survive in the market with discounts and offers.
The Wrong Way To Price Handmade Items.
One of the most common mistakes you can make while pricing your product is expecting irrational outcomes. The traditional way of pricing products is not applicable when dealing with markets like now when your product can easily be replaced by someone who sells the same commodity for a comparatively lower price.
Some of the most common practices are:
MATERIAL COST X2 = WHOLESALE PRICE
WHOLESALE PRICE X2.5 = RETAIL PRICE
Few more like,
COST + HOURS OF LABOUR = WHOLESALE PRICE
WHOLESALE PRICE X2 = RETAIL PRICE
Pricing your product incorrectly might lead to stagnant inventory, as the handmade industry has been getting a lot of exposure lately, resulting in many makers starting their businesses.
How To Conduct Market Research
Finding a correct market for your product is very needful. Conducting market research isn’t that complicated as it sounds. Small businesses or big companies ONLY NEED TO FIND THE CORRECT NICHE for the product. Selecting your very own niche will make the product define its category.
Before getting into the business you should identify your customer base, lets say you are a handmade bath bomb-making company and you have to reach out to a mass audience and make them aware that your product is the best fit. In such cases determining your customers through research helps, usually making the use of social media to aware the public can be a wise option.
Market research helps you find potential buyers which are ready to buy your commodity. As every market is vast, researching before you launch your product can be a smart move if you produce or even resell a particular commodity.
You can find craft fairs or exhibitions taking place in your city on handmade art crafts. Taking a part in these options will always help you create awareness about your business to a huge crowd interested in buying your handmade products. Pitching customers through this medium will help you gain clients which will buy your commodity in bulk and sell it in the international markets.
Different Types Of Handmade Items.
Handmade rugs are very famous within the handmade product reign. People especially purchase handmade rugs since these rugs are always 1 of 1 and each rug is formed with a unique influence.
Handmade rugs are meant to tie down the personality of the whole room. Handmade rugs consist of quality materials that are specially sourced out for rug production. Rugs can be a great way of investing too.
Handmade jewelry is another way to make yourself stand out from the crowd. What makes handmade jewelry more special is the materials used in the jewelry. It is a pleasurable experience when the owner is aware of how rare the beads are on his/her bracelet which is handmade. When buying handmade jewelry you are not just buying a piece of art but the craftsman years of experience.
Handmade and carved sculptures do have a great demand in the collectibles market. This commodity is usually possessed for the reason of showcase. These come under the collectible range.
Handmade scarves are getting popularity as it gives a fresh look to one’s wardrobe. Scarves like cashmere are very famous in foreign markets as the scarf itself is made from sheep wool.
Handmade Wooden Crafts
Skilled woodworkers are been making wooden toys for kids for decades, wooden toys are one of the ancestral treasures which have been passed on to today’s generation.
Marketplaces To Sell Your Handmade Items.
India is been known for its handmade art, as many craftsmen have entered this market to turn their skills into a business. There are several marketplaces to sell your art, every small business can visit craft fairs or exhibitions.
Pitching your product in the exhibition can give your product a extra boost. Selling your product on an online site can give your easy reach, as everyone is finding art while sitting on their couch.
Few online platforms like craftsvilla, Copper, Qtrove can be a good start for your handmade business to get started.
You can always get in touch with us and we can see if your products matches our vision. If it does, we would love to make the part of our catalog.