How to Determine the Right Price Point for Handmade Crafts
Is the price right?
That’s the million-dollar question. Overvalue your work, and you can price yourself out of the market. Undercut your competition and you might jeopardize a mortgage payment.
It’s not just about covering expenses—it’s about earning a living.
Include Hidden Expenses
Artisans often fail to consider the “cost of training and living related to the craft,” said David Brown, an artist and executive director of Spacetaker, a nonprofit cultural arts organization based in Houston. “An artist is a small business. The more artists know about the associated costs related to producing their craft, the better prepared they are to price their work and sell it with confidence.”
Brown said he factors in education, materials and cost-of-living expenses, and then averages them “to generate a basic projection of the monies needed to achieve my goals.” It’s helpful, he added, to have a “get-out-of-bed price,” meaning a minimum figure to even think about starting a commission.
Marcie Davis, a south Florida glass artist who produces instructional glassblowing videos and “Glasscaster,” the first hot glass podcast series, said newcomers have a “terrible time” with pricing because they’re afraid to ask for what they need. “If an artist or craftsperson wants to survive and thrive in the business, they must approach pricing from a businesslike perspective,” she said.
When Davis started working in stained glass more than 20 years ago, she mistakenly priced her work based only on the cost of the materials. Left out of her sales equation was all her labor—the cutting, grounding, foiling and soldering—not to mention all it took to keep a roof over her head.
Experts say artisans tend to err by underpricing their work, especially early in their careers. According to Davis, “There’s the common apologetic approach where artists are so uncomfortable putting a price on their efforts. It’s like selling yourself. You don’t want to be greedy. You don’t want to be rejected. It’s so hooked up in your personal self-worth that you can really get tangled up in the process.”
Swinging the pendulum too far in the other direction can backfire, too. Davis said people who overprice their time and talent ignore the marketplace entirely. “This is either ego or ignorance. Either way, it won’t work. Know your market and your competition.”
Davis bases her pricing on a simple formula: “A third, a third and a third. Your materials equal one-third, your labor is one-third and your profit is one-third. Or simply put, multiply your costs by three.”
It’s not uncommon for craftspeople to undervalue or ignore their labor entirely. Some production techniques take so long that being paid for them seems out of the question. If the technique is too painstaking, consider ways to streamline your production to make the process more efficient. Is it possible to sell your work without selling out? Craftspeople walk a fine line.
“Poor pricing practices can be very dangerous to your sustainability,” Davis maintained. “If you lowball to get the sale or the commission, then you either go broke giving it your best efforts, or you’ve priced it so you can’t give your highest degree of service. Then you have to try like crazy to cut back in time and design and possibly quality to meet your agreed-upon price.”
Consider Your Location
Jill Berryman, executive director of Sierra Arts, a regional arts organization in Reno, Nevada, said it’s key to “know the community in which you will be selling your work,” whether a local flea market or an upscale gallery. Do research, both online and in retail locations, to see what the economy can bear. Geography is huge. What is the median income of potential customers? If it’s less than $20,000 a year, don’t expect to sell many $500 items. If the median income is $75,000 or higher, your customers may be willing to reach deeper into their pockets. “I do believe some artisans are limited by the economics of their region,” Berryman said.
“However, if there is a good tourism base that moves through a lower socioeconomic area, there may be some recourse there.”
Some types of crafts have caps on what individuals will pay for a piece, especially if it’s utilitarian. And that’s especially true if your work is being shown in a flea market or in a gift shop where similar items will be on display at lower prices. That’s why you need to window-shop your competition’s pricing as well.
Joan Blackwood of Weare, New Hampshire, makes one-of-a-kind collectible dolls sold on the Home Shopping Channel, as well as in galleries. Her client base is worldwide.
Despite years in the business, Blackwood conceded pricing is an art, not a science. “I basically look at the competition and then price accordingly. I have priced lower at times just to make sure it sells. I was warned in this business: Don’t price your work so high that it will eventually not sell.” The problem, she said, is her prices have gone up “very little over the past twenty years.”
Boost the Value
If you’re not earning a fair income or moving your pieces, change your approach. A price point doesn’t need to be stagnant. “Once the market is established for a particular artist’s work, it starts to go up in value—value meaning validation of the art form, press, monetary gains,” said Spacetaker’s David Brown.
A little education goes a long way. Consumers often don’t know enough about a given medium to appreciate whether a craftsperson uses high-end materials. “They will almost certainly be unaware you spent twice as long on your piece by adding a time-consuming finishing technique and that the artist who created the next piece on the shelf did not,” explained Marcie Davis. Give would-be buyers information that differentiates your work from others. “If you use special materials or techniques, be sure to have a lovely little label or card that explains your work, materials and technique,” Davis continued. This will add value in the consumer’s mind.
Jill Berryman agreed. “I love to give gifts from artisans who include a brief bio about themselves and their work. It makes it much more personal, and the receiver of the gift knows that this is a one-of-a-kind piece, not something mass-produced overseas.”
Ask Your Customers
Finally, don’t underestimate the wealth of intelligence you can glean from your customers. “I think one of the biggest mistakes craftspeople make when they are in an arts fair or manning their own selling is they don’t talk to the people who walk up to them,” Berryman said. “Having a conversation with someone who knows nothing about you and what you do can be very insightful.”
About the author: Iyna Bort Caruso is a New York-based writer who specializes in art, trends and business-related topics.