I'm often asked by knitters, spinners and felters how to price the items they want to sell and since this question was also raised at Felter's Fling earlier this week I thought I'd share my thoughts and those that were discussed at Fling.
Most customers who have approached me about this seem to have heard that the rule of thumb is to ask 3 times your materials cost. I've never understood where that came from! In my experience, there is just no basis for that at all. Some crafts require relatively little material cost and are labor intensive whereas others are quick, buy costly in materials!
I've always looked at the time it takes me to make the item...that includes the time to dye the fiber and the fabric, do my test swatches for color/shrinkage, design the piece, layout and felt the piece and sew or trim it....and mulitply these hours by my rate per hour (how you come up with that is another issue entirely!). Then I add in my materials cost and something for my overhead cost which in my mind includes the cost of the dyes used, the propane gas for the tank, electricity. And then I'd add in any extra marketing costs....did I print up post cards for the gallery show to send out or hand out at the event or did I take out an ad?
When asked this same question at Fling, our instructor seemed to have the same approach to figuring her starting cost although she also added in the time and financial investment in workshops taken honing the skills over the years as well as the investment in R&D - you know, all those items you "experimented" on to get to the pieces you're selling. So all that comes to your "wholesale" price - what you'd sell it for directly to the buyer. Then she suggested doubling that total figure for a retail situation (i.e. if instead of selling it directly you are selling it thru a craft shop or gallery). She also had a friends discount for a while...the "mate rate"...until that got a little awkward.
I also think there is a much more ambiguous factor that I believe some artisans manage to work in to their price. So this "X" factor is how much BEYOND the starting figure you come up with based on the considerations mentioned above that you can ask (and get) because of the uniqueness and originality and scarcity of your product. My friend Linda commented that this X factor is what one can get for your stuff AFTER you die....and its higher if you die tragically and at a young age!
Of course the bottom line is that your success is a function of the marketplace...you know it's all about supply and demand . And demand is a function of WHO is shopping and that's why its important to know YOUR market. You can underprice yourself out of a market you know. As the instructor said....when one of her items isn't selling, she marks it up!
What are your thoughts!