This article follows on from the previous article ‘how do I work out my hourly rate?‘ The aim is to show you how to price your product. It’s not rocket science and should be straight forward. If you are a self-employed designer / maker or crafts person, sole trader and work for yourself in Brighton or anywhere else the following could help you.
Once you know your current hourly rate you can more easily work out the price of your handcrafted piece or pieces. In order to work out the correct value of your product you must know :
1. The cost of all the raw materials used – keep all your receipts!
2. The costs of any packaging used to present or post the item/s.
3. The cost of any contracted out work – hallmark, engraving, printing, casting, photography etc.
4. Any travel costs incurred in making the item.
3. The time taken to make the item from start to finish including:
– client liaison
– design time
– making time
– travel time
4. The amount of profit you wish to make.
Tip: The amount of profit is a subjective matter. It will depend on where you are selling your handmade item. If you are selling to a craft shop/jewellery gallery where they will be doing the selling for you keep your profits low as they will invariably add a commission on top of your price to cover their costs (shop, staff, insurance etc). I advise you to sell your product to a shop at your wholesale price (20% profit). If you are selling direct to a client then it is entirely up to you to decide what profits to add to your wholesale price.
As with the previous article I have attached a blank excel spreadsheet for you to calculate your product price. I have completed the first column with some example materials i use for my jewellery. Fill these in for your item as required. Firstly, fill in the blue boxes with your hourly rate. Then all you need to do is fill in the yellow boxes with your direct and indirect costs and the total for your product will be calculated automatically.
I hope the outcome is as you expected. I’d like to hear how you got on. Also if you have any problems do get in touch. Good luck.
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