The Struggle of Pricing for Handmade



Image shows a female presenting person with long curly hair and glasses, wearing a green tank top and jeans rifling through a rack of fresses

Most entrepreneurs, especially handmade artists will cringe when they have to talk about pricing, and I'm not really sure why that is. We can look at another maker and tell them they're under-priced, but then we feel this immense pressure to justify our own prices, and not just to customers, but to ourselves (imposter syndrome anyone?). 

For many of us, the business actually grew from a hobby, something we did for fun, realized we were getting really good at it, and decided to dive into the world of business ownership. I wish I could say there's some kind of guide out there to tell us how to do it right (there might be, but you probably won't find it before you get started), but the reality is most of us learn through trial and error. 

I think the first mistake most of us make is not realizing that we're not our own customers. When I started out, I priced my items at what I would pay for them, but I was pricing them compared to mass produced, made in who knows where pieces that I could get at any department store. The reality is, pricing for handmade is a heck of a lot harder to do. 

Did you know that most handmade businesses don't actually account for their own time and labour when making their pieces? There are all kinds of formulas out there to "help" us price things out: cost of materials x3, cost + labour x2 (or 3 or 4?), etc, but how many of those really consider all the factors? And how many actually allow for growth of a business? It's one thing to say that as a maker we can pay ourselves a few dollars an hour, or even to say that we enjoy making so it doesn't feel like work, but where would that leave us as a business in 3 years, or 5 years?

In Ontario, our minimum wage is currently $15.50/hour, and that isn't even considered a living wage here, not to mention that the "making" portion of most of these businesses requires a skill set far beyond what you could expect from a minimum wage employee.  But when I discuss pricing with many other entrepreneurs, they might be paying themselves $10/hour in labour, if that.

Some makers truly do consider their business to be more of a hobby, where they make things they love and if they make a few extra dollars from it to pay for supplies, fantastic. And there is absolutely nothing wrong with that.

But the true costs of running a business run beyond just the cost of raw materials and time. Things like hydro, internet, storage, web fees, advertising, market fees, gas, furniture, labels, packing supplies, needles, thread, maintenance on machines (or upgrades/replacement), licensing, compliance, insurance (did you know your house insurance claims could be denied if you're operating a business without them knowing?), taxes etc.

The reality is, as the price of everything else out there goes up, so do our costs. I source my fabrics from wholesalers meaning that I no longer have a middle man claiming a portion, but even then my cost has gone up anywhere from 5%-20% in the past 3 years, the cost of my thread spools has almost doubled since this time last year, and I'm sure we've all felt the pain of shipping costs. 

I've had to take a hard look at my pricing these past few months, and while I'm happy to say that some of my products have been in line with where they should be, others are far from it, as my costs have gone up, my prices have stayed the same (or even gone down in some cases).

I promise to continue to do what I can to lower my overall costs so that I can keep my prices as close to what they have been before, but as new products get added (or updated), some of the prices will have to change. Please know that I am not doing this to try to gouge anyone, I am doing this so that I can continue to offer the same great quality you're used to, and to ensure my business can grow so I can stick around for years to come. 

Whether you're a maker, supporter or customer, I'd love to hear your thoughts. And if you are a handmade business struggling with pricing, feel free to reach out, I'm always happy to chat. 

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