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.
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