the Crafts of Missouri Artisans
In most businesses, marketing is the key to success. Many businesspeople research their market even before they start producing a product. Marketing covers a range of topics, including customer preferences, consignment, profit margin, mark-up, overhead costs, retail, wholesale, pricing, advertisement, promotion, and others. Because of its importance in marketing, we briefly examine here the aspect of pricing. Pricing the artisan's craft
Pricing crafts is a craft in itself! One of the most commonly asked questions among crafters and producers of any product is, "How much should I charge for my craft or product?" Even though many crafters are not expecting to become very wealthy, they would like to pay for the materials and equipment that go into their work and still be able to have some reserve to show for their skill and labor.
Correct pricing enhances the value of your work. It is important for artisans to successfully employ the craft of pricing and marketing to ensure that those who like their crafts are able to purchase them. In other words, a crafter should price her craft to make it marketable.
Pricing a craft may require market research, which would seek to answer some basic questions:
"How much is a craft worth to a customer?"
"What would a customer will actually pay for the craft?"
"Will the crafter and a retailer make some profit at that price after paying for costs?"
"How elastic is the demand for the craft?" (In other words, "Can the retailer make more profit by selling a few crafts at a higher price, or more at a lower price?")
Some of the crafts made by artisans require the use of needle and fabric, and these are labor intensive. This means that the time needed to produce these crafts is worth much more than the materials. (Ramsey, Dan. "The Crafter's Guide to Pricing Your Work," 1997. )
Two Ways to Price Crafts
1. A simple but less efficient way of pricing crafts is to multiply an hourly wage rate by the number of hours it takes to complete a job. Let us say that it takes five hours to finish a craft. If the artisan thinks that she is worth $11 an hour, she multiplies five hours by $11 and adds $20, which is the cost of the materials she used. Her asking price will be $75.
Price = (wage rate x number of
hours) + cost of materials
- Labor cost is hourly wage rate multiplied by the number of hours worked plus the cost of benefits package, which is usually 1/3 of the wage rate.
- Overhead cost is every cost excluding direct material costs and direct labor cost. For example, studio rent, tools, utilities, and studio clean-up. This may also include the opportunity cost of investment funds, which could be measured as the interest a similar deposit amount would yield in a bank.
- Profit is calculated as total sales or total
revenue minus total cost.
This site was created by Lori Compas at the
Comments or questions about marketing your