Price Your Crafts to Match Your Business Goals

---

   
It's important to have a clear vision of your business strategies and goals when you price your crafts. Is your goal to reach a very broad market, or a small, specialized market? How do your craft prices compare with your competition? What is your target market, and what price range will that market accept?

Once you've considered your costs and needs for business growth, the ideal price range for your products lies somewhere in the answers to these questions.

Business Goals
If your business goal is to build a mystique around your products and sell to a specialized market, then you may consider using a luxury pricing strategy when you price your crafts. Luxury pricing - using higher craft prices to help create a real caché around your products – can result in selling at a higher price, but often to fewer customers.

Do you want to create affordable products and sell to a larger market? If that's your goal for the growth of your business, then it should be reflected in your strategies when you price your crafts. Be a bit careful with this strategy. If you're operating on a more narrow profit margin, you'll still need to ensure that you've built into your price room to cover all of your business expenses, make a reasonable profit and fund your needs to grow and develop your business.

Rather than under-pricing to keep your prices lower (if that's your goal), you may, instead, build efficiencies into your production process which allow you to lower your price but still make a reasonable profit. For example, if you have a clearly defined line of products, you'll typically have fewer expenses and demands on your time per piece than a professional crafter who makes one of a kind pieces. Therefore, you'd typically be able to price your crafts at a lower price for these products than you could for one of a kind pieces produced using similar techniques and raw materials.

Competition
Take some time to consider your competition before you price your crafts. Check out sales venues where you intend to sell your crafts. See who your competition is at these venues and what typical prices are for products that are similar to your own. You can also get a good sense of competitors' craft prices by visiting their websites.

Keep in mind, though, I'm not suggesting that you compete on price. You're not researching competitors' craft prices in order to undercut them, merely to understand how your prices compare with your competition. The problems with competing on price are that you really can't know without a doubt whether your competitors are making a profit at their prices. Also, by under-pricing your work you'd be contributing to the devaluing of handmade products.

People don't typically buy handmade products on price anyway. People buy handmade products because they are unique and they fit with their own sense of style. So once you understand how your prices fit within the prices of your competition, rather than competing on price, find a way to make your products stand out from the crowd so they are more attractive to your customers.

Local Economies
The price that people will be willing and able to pay for your products will vary geographically. It will be important to take that factor into account when you price your crafts and create your marketing strategies.

Several years ago, while I was in school, I worked at a local clothing shop. The store was part of a small chain, and it was new to the area. The owner had previously managed another store that was part of the same chain in a town just 20 minutes away from her new store. She often commented to me how extremely different customers were at this new store compared with customers in the town that was only 20 minutes away.

She noted that customers at her own store constantly commented on how fantastic her clothing prices were, while in the town 20 minutes away, customers consistently complained that the prices were too high. Although the towns were practically neighbors, there were real economic and cultural differences in the two areas, and that made a huge difference in the perception of price in the two locations.

Again, I'm not recommending you under-price your crafts. However, I would suggest that once you determine the price of your products, ensure that you are selling them in an area where there are customers who can and will pay those prices. Find your price, and then find your customers.

Target Customers
Determining the characteristics and motivations of your target customer will help you to develop a more focused and effective strategy for pricing crafts. Do your products appeal to the teen and twenty-something market? If that's the case, you'll likely do best with more modest prices. However, if you are marketing luxury to the successful business professional, your most profitable price will be significantly higher. The high price, in this case is not tied to the cost of raw materials, rather, it reflects and builds the caché and exclusivity of the product.

Keep in mind that finding the most profitable way to price your crafts is not necessarily a simple matter of finding the highest price that people will pay for your product. Nor is it always a matter of finding the craft prices the will encourge the most people will buy your product. Decisions about pricing your crafts should be closely tied to your business development goals, image and marketing strategies. Keeping the big picture in mind when pricing your crafts will help you to maintain and meet your business goals.

 
Return to Pricing Your Crafts from Price Your Crafts
Return to Inspiri Art and Craft Business Resources home page