Why is it important to price your hand made items appropriately?

As a designer maker and a self employed business person you'll soon learn the importance of getting a few basics right! 
It may take more then one go and they might be the hardest lessons you learn but I hope that through my experience that you'll be able to hop, skip and fly over those little hard life lessons!
When I first started selling my hand made products I fell into the trap so many other designer makers fall into. Pricing! Yep, it's an art in itself.

My first day at Sunday Up-Market on London's Brick Lane was filled with excitement and also with a lack of self confidence. Once I set out my stall I went around to see what everyone else was doing and began to let the doubt creep in. Bad idea. Don't compare your work to anyone else's! So the questions began: "Was I charging too much for something which is very similar to that over there which is half the price?", "Will anyone buy them…they might be too pricey?" , "Are they even any good to sell?"  ETC. and I did the "newbie" mistake of lowering my prices. Prices which I had worked out and agreed on.
In reality they were well priced. Actually once I had the same products stocked in Benetton in Lisbon they priced them up three times more then what I was asking for them and they sold. Like hot cakes!

Because I wasn't confident and felt pressured into making sales in order to pay for my pitch I sold my items for way less then they actually were worth. It wasn't even enough to cover materials! It was a struggle and I spent any free time mostly after a full time job making up stock to just about break even. Lots of people got really good bargains that year!

By pricing your products correctly you do two things:
one - you pay your self a fair wage and keep funding your hand made company. This can be after all your career!
two -  you don't diminish your work and everyone else's by underselling a hand made item. It makes it so much harder to sell your items which have been made with lots of love and care if the person next to you is selling a "just as beautifully hand made" product for next to nothing!

One of my bug bears is seeing gorgeously designed hand crafted items which are undervalued because there's this lack of belief in hand made products, their importance, place in the economy, sustainability and their value.
It's perfectly fine to make because you like making but please don't sell your products for "pound shop" prices. 
If you are crafting because you find it is a release and/or a curative pastime then there's always the option of setting up a workshop where you can teach and share your passion. Lots of craft cafés, craft markets and collectives are paying for tutors as are local charities. Working with the community might just be as rewarding if not even more so keep an eye out as there might be a creative projects you can volunteer your time and skills to.

So OK why are you going to sell your items at a premium price?
To say that you really needn't the money and are just happy to make is an inexcusable,selfish action as many talented and struggling designer makers need to make their money by selling their craft. Not everyone has a husband or partner that can sustain a household and your hobbies on just one wage.

With the creation of market spaces like Etsy and Folksy, to name but a few, which work both as a platform for creatives to sell their goods and a buying space for craft lovers it has also successfully highlighted a popular alternative to High Street shopping. BUT in all honesty it's also a double edged sword. 
For example as a company Etsy does just that: provides a vibrant, attractive, creative buying and selling space. It's a an all singing all dancing shop front for everything and anything hand made, promoting it heavily as something special and that cool kids will want to buy... and they do that very well too... but there's little or no pre vetting so anyone can add anything to it. Needless to say that just because someone makes something that it doesn't mean it's worthy of being called a CRAFT item.
The trouble with pulling all this creativity under the hand made banner is that it fortifies the misconception that it's not a serious business...that it's all about glitter,sparkles and macaroni stuck on card with PVA glue! Hey I love a bit of nursery crafting as much as the next but these types of crafts need to be kept in their rightful place. In the home. I've just seen too many items on these sites that are absolutely substandard,badly designed and badly conceived. 


Hand Made needs to be perceived as serious industry and a luxury product . If people want a cheap gift then mass production fills that brief.
We need to treat hand made goods unlike mass produced goods and start pricing products fairly and realistically. It is after all a premium product because of the nature of it. Hand made means it will take longer to make there fore the the manufacture rate will be higher.
It doesn't mean that everything you make needs to be expensive and exclusive. It's all about working out exactly what is realistic to make to sell, what is viable for you as a maker to produce, what the demand is and what will earn a fair profit for you. 

So how do you price your products correctly?
First you'll need to set your self a rate or a wage IE what you are paying yourself per hour or per item. Then you'll need to factor in your materials and this goes from the actual materials used (fabrics, silver, wool etc)  down to your electricity for your lighting, your computer, the time you spend trawling the internet for these materials or the train tickets you've paid to go into town to buy that button you desperately need for that item, use of tools, the use of your sewing machine and even the thread you used on that sewing machine!
Personally I work out all the material costs and multiply that by three. I can factor in the time and everything individually but I've found that it works out pretty close. You'll find your own formula. How you work it out is up to you and there are quite a few web sites with great advice which can help you make sense so have a look. 


It's not all about hard nosed business practices and I do believe there's enjoyment too even if you are aiming to create a successful hand made company...but it is a business after all (if you want it to be of course!).