If you are thinking of selling the crafts you make, one of the most important decisions you can make will be how much to charge for your items. If you don’t price your items correctly, you won’t have sales if an item is priced too high, or you will go out of business if the items are priced too low for you to profit. While there are many formulas for calculating prices, they are all based on certain common elements.

First, know your market. If the items you make are priced higher than what people normally buy in your area, you must either be priced lower or sell on the market that supports your prices. Trying to sell high-end jewelry pieces at a flea market won’t work, but finding a specialty boutique or juried fine art show will. Once you’ve decided who your target market is and what they’re willing to pay for, you can start working on your numbers.

Make a list of all your expenses related to creating your crafts. This includes materials, labor, overhead, and profit. When calculating costs for materials, this includes everything from glue, thread, markers, etc. Be sure to include the shipping costs for those materials if you need to order them by mail. Calculate how much the material costs to produce each piece, this gives you the price of the raw item.

Calculating labor is a bit more personal. How many items can you produce in an hour? How much do you want to be paid per hour? If, for example, you can produce five of your items in an hour and you want to earn $ 10 per hour, then your labor cost on each item would be $ 2. Obviously, this amount will vary depending on how many items you can produce in one. time and how much you want to be paid. Add this amount to your cost of materials per item.

Overloading is tricky. While most artisans work at home, don’t think you have no overhead. There is the space you occupy in your house for your work, pens, paper, the telephone, electricity, etc. that is used during your business process is counted toward your overhead. The easiest way to do this is to keep good receipts and open a separate checking account to buy anything for your business. For utilities, take an average household bill (such as electricity) and divide the total amount by the percentage of square feet your home business occupies. Once you have this total number, you can divide it into a daily or hourly number to make calculations easier. Add this figure to labor and materials.

Earning is one of those things that people add to the calculation of work or do it separately. It depends on whether you have someone to help you make the items or not. The profit is really the number you want to make beyond the cost of the item. So if you want an additional dollar of profit on each item over and above your labor, add that amount to the cost of each item. If the cost of making your items brings your retail price lower than the area averages, you can add profit and increase the price, keeping it in line with the average price.

Once you add these four items, this is the price at which you want to sell your item. As you can see, the profit number is what you can adjust to keep your item price in line with your market.

What if your numbers make the item too expensive for your market? The first thing to consider is the cost of materials. This may mean finding new sources for your materials or buying in bulk to cut costs. Don’t forget to look up your supplies on the Internet; You can often find great prices on materials that way. It could also reduce your earnings, or possibly your workforce, although these are the last decisions you need to make.

Take the time to work the numbers and you’ll be more likely to be successful in business selling your crafts.