Saturday, 11 September 2010

oohhhhh How much?

I think, this information is as important for buyers as it is for sellers. Often a buyer has no idea about the amount of time and effort that goes into producing a handmade item that is sold online in a market place such as Esty. As for the sellers, I think many of us under value our work and don't get paid a decent amount for the things that we produce, sometimes I get asked to do a custom order but the amount they want to pay is ridiculous and I think to myself, do I want to earn less than a poor 7 year old in a sweat shop?

So, let me break things down a bit for you, basically
COST + PROFIT = SELLING PRICE

simply huh? nope!

Let's break down the costs... will use a stuffie or soft toy as an example (just because that is one of the things I make and I can be more specific about the costs than say, ceramic teapots) and of course, depending on what you make your expenses will differ.

Materials:
fabric - main body, appliqued patches
buttons and ribbon
stuffing
bond-a-web
thread
needle
brand label
train fee for when I go to buy these things (or petrol if you drive)

Time:
time to buy or source all your materials
time it takes to design the pattern, re-makes, unstitching, re-makes, re-drafting...
time to cut out all the pieces you need
time to sew the stuffie together
time to stuff it and finish off the details
time to photograph it and edit the pictures
time to list the item
time spent promoting the item/shop
time taken to go to the post office and back.
time to do you accounts

Over heads and other expenses to consider:
electricity for sewing machine/computer/lights/iron/aircon!
wear and tear on the mac, digital camera, sewing machine, rotary cutter and mat, scissors, iron, bike
insurance
taxes
advertising (and you can add a chunk of time to that too)

Fees:
Etsy listing fee
Etsy commission on the sale
Paypal fee
and for me transfer from $ to ¥


Postage and packing:
envelope
packing bag
sticker
thank you card
business card
ink for airmail/small packet stamps
pen for writing out the address (or printer ink if you print your out)
tape

I am sure I have probably forgotten or over looked something but I am sure you get my drift, there is a LOT to consider before whacking a $5.99 price tag on your toy and that little lot only covers your expenses, if you sell your item at a price that just covers your expenses you are not making any money.

I imagine that I am not the only one who doesn't calculate 'time' into the equation or should I say doesn't calculate properly, truth is, if I did the items would seem too expensive and it is doubtful if I would sell any. But, on the other hand I do want to earn as much as I feel I am really worth and one of the main obstacles with this is other sellers. Yes, other sellers under selling themselves, if sellers under sell them self, not only are they costing themselves money, they are bringing the price bar down for everyone else.

I am not against healthy competition and at the end of the day, it is up to every shop owner to decide on their pricing structure but as part of the online community we should all take a bit of responsibility for our actions.

So, a request to other sellers, please take EVERYTHING into account before you stick a price on your items and if you sell your items just because you love making them, then do consider the effect that your under pricing will have on those trying to earn a living from their craft. If you are not interested in making a profit for yourself, consider selling your goods with an aim to give the profits to charity, at least that way, everyone wins.

And a last word to buyers, please consider the amount of time someone puts in to get the item you are looking at into the store.

If you have made this far, well done, now, what are your thoughts on the matter?

*Edit: after a discussion in the forums I realise that some items are placed low deliberately to lure people into the store and I also want to clarify that I am not aiming to bash anyone, and it is not aimed at any specific shop. I wrote it to help those who sell handmade goods online and to give those who buy online some idea of the costs that go into making an item.

11 comments:

  1. I think this is fair enough. I bought some custom made pouches for my Montessori school. I have to admit, when you quoted a price I gulped because my budget is small but I really wanted some lovely materials for the shelf that were well made and would last for a long time. When I considered that, plus the fact that I wanted to pay a fair price (particularly as I buy fair trade clothes etc) I went for it and bought 20 pouches from you. They have graced my classroom and have had the intended effect, which was to have enticing and long lasting materials in the class. No regrets. Certainly not something I could have made. They have been in constant use and they are all as good as new.

    Thanks for the run down on all the costs. They certainly add up to a beautiful product.

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  2. The same thing happens in many other industries too. The one that I am most aware of is the roadside vegetable stands where all the locals put their vegetables at ridiculous prices - because they are doing it as a hobby, not a business. As you said that is fine for them, but for anyone who actually needs to make a living and puts a value on the time and effort they put in to growing their things it makes it impossible. Great for the consumers though....

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  3. It's a tricky balance isn't it. I make needle felted figures and some of them take hours. If I'd charge properly for all of my time they would be an insane price!
    Thanks for your post. Hopefully it will help buyers understand all that goes into handmade items.

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  4. Loved reading your post today. I havent sold anything online yet but am thinking of trying it in the future. What Im dealing with lately and it suprises me is that since friends and family know I craft - alot of them send me pictures of crafts that they see online or at craft shows and ask me to duplicate the item for them (for free of course). This makes me so uncomfortable because it is so dishonest to the original crafter who took the time to visualize, create and sell the item. I politely decline and wish that they would just purchase from the orginal crafter.

    I agree also that so many dont take time into their estimate of what your product should cost.

    I drool over your sock monkey btw.

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  5. I totally agree with you Jo. In my experience there are always people who want something for nothing.

    Not only should you calculate your supplies and time but the effort that you put into producing beautiful pieces of craft. It is something that cant be done by everyone and the fact that it is handmade by you makes it even more special. My motto is, if you want it cheap then you know where to buy mass produced products where huge companies exploit nearly everyone in their path to be able to sell these products at such a low price. If you do want something unique and beautiful, which has had love, sweat and tears (well nearly ;) lol) added into it then you would expect to pay that little bit more.

    It annoys me when people say Oh did you make that and then ask the price, and they come back with some comment of ooooh thats expensive I could get one half the price of that from 'so-and-so'.

    Sorry I'm getting on my soap box now :D

    I know people are on tight budgets in these times, but if everyone was to sell at knock down prices to compete with each other then surely craft would die out due to the non profitability of it all???

    Thanks for letting me rant about a subject that really gets me going ;)

    Hugs
    Em xxx

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  6. Thank you all for your lovely comments. I have to rush out this morning but I do want to add more....
    later :o)

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  7. Applauding...

    I had a crafting business for a few years (baby carriers) and it was so hard to be told over and over again that I was trying to rip people off. I would usually try and explain how much time and effort went into my work (and I was one who was definitely on the lower end of the pricing spectrum).

    Thanks for educating (or simply reminding people) about the value of workmanship!

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  8. I TOTALLY agree! I feel quite annoyed when I see crafts in shops sold soooo cheaply - like for a few pounds! If the mark up is 200% like we're told makes me wonder just what the maker was paid??? if at all??
    So I often DON'T buy the item because its so cheap someone is obviously being exploited!
    Sorry - now I am on my soap box.
    The comment by Annie Rose also struck a cord - people asking her to make something (that they couldnt make) for free! Do they not realise that she would have to buy/find the materials first? OHHHH.... gets me going.....
    At least in that department I am lucky - I have a wonderful sister who makes me lovely notebooks and calendars - just because she knows I would love it :-) and I do the same for her.
    But its just not worth the trouble of making gifts for friends or even family who don't appreciate what actually goes into the 'making'.
    Thanks for ALL my childhood knits Mum and Nan AND YAY! and all YOU BRAVE LADIES who have a craft business!!! BE PROUD :-)

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  9. Annicles - thank you! I am so glad to hear that the pouches are holding up, it was fun to make such a varied selection.

    and Jo, you make a good point, it does happen elsewhere too and it doesn't do anyone any good, I am all for healthy competition but marking prices so low is just ridiculous. I am one for a good bargain but after opening the shop, I do stop and think about why something is so cheap, no doubt someone, somewhere is being exploited.

    Anna Rose - I agree, when friends or family ask to make something, those who are not crafters they have no idea how much time you put into it. I won't make a direct copy of something but if someone said for example a bag, I like the handles on that bag and the shape of that one and this fabric with that lining, I would be happy to do it, as long at they were happy to pay!

    Emma - you said
    and they come back with some comment of ooooh thats expensive I could get one half the price of that from 'so-and-so'.

    but the fact is they can't can they? I know you make limited numbers of each bag and so they should appreciate the fact that they are getting something pretty unique not a mass produced item.

    Millie - you mention mark up, I also suspect that many people don't consider the wholesale issue, in the real world, the formula in the post should be your wholesale price and then double it to make your retail price. When I price my goods I think about the wholesale issue too, some of the items I know I would never sell as wholesale, either they take too long to make or I don't enjoy making them enough to want to sell them wholesale.

    I admit, I will see something handmade that catches my eye and think 'oh, I could make that myself' but now I tend to add, but will I really get round to it or if I did could I make it to the same quality? Taking a step back and realising that I don't have to make everything myself was a big step last Christmas. I also decided that beautiful handmade goods are just wasted one some people!

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  10. Annicles - thank you! I am so glad to hear that the pouches are holding up, it was fun to make such a varied selection.

    and Jo, you make a good point, it does happen elsewhere too and it doesn't do anyone any good, I am all for healthy competition but marking prices so low is just ridiculous. I am one for a good bargain but after opening the shop, I do stop and think about why something is so cheap, no doubt someone, somewhere is being exploited.

    Anna Rose - I agree, when friends or family ask to make something, those who are not crafters they have no idea how much time you put into it. I won't make a direct copy of something but if someone said for example a bag, I like the handles on that bag and the shape of that one and this fabric with that lining, I would be happy to do it, as long at they were happy to pay!

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  11. continued...

    Emma - you said
    and they come back with some comment of ooooh thats expensive I could get one half the price of that from 'so-and-so'.

    but the fact is they can't can they? I know you make limited numbers of each bag and so they should appreciate the fact that they are getting something pretty unique not a mass produced item.

    Millie - you mention mark up, I also suspect that many people don't consider the wholesale issue, in the real world, the formula in the post should be your wholesale price and then double it to make your retail price. When I price my goods I think about the wholesale issue too, some of the items I know I would never sell as wholesale, either they take too long to make or I don't enjoy making them enough to want to sell them wholesale.

    I admit, I will see something handmade that catches my eye and think 'oh, I could make that myself' but now I tend to add, but will I really get round to it or if I did could I make it to the same quality? Taking a step back and realising that I don't have to make everything myself was a big step last Christmas. I also decided that beautiful handmade goods are just wasted one some people!

    ReplyDelete

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