Home
Products & Services
Calendar
Fiber Facts
Small Business
Links
About Us

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

The problem with this is that the artisan may be underestimating her worth in terms her skills and tools. Furthermore, she is not considering what it will cost her to replace her tools when they need replacement, the interest she would have earned on the money she invested in the business, and the cost of utilities and services involved in her craft. When these cost are included, the artisan would realize that she may not be paying herself a sustaining wage.

2. A more involved procedure is where the price of a craft is calculated using the following function or methodology:

Price = materials costs + studio rate + sales costs

where:
a) Materials costs are the costs of purchasing the materials used in making the craft plus the cost of transporting the materials to one's studio, such as auto mileage charges.

b) Studio rate (SR) is calculated as:

SR = labor cost + overhead cost + profit

- 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.

c) Sales costs are what it costs to sell the craft. An example is what it will cost you if you should consign your craft to a store for sale or the commission that a seller will demand to sell the craft for you.

Note: In many cases, the crafting of prices tends to differ with the type of craft concerned. Some may require fancy equipment and others may not. The crafter will just use her judgement in applying the pricing tools given above. Always remember that you have competitors, and try not to price yourself out of the market. Price reasonably and try to differentiate your product from everyone else's.

Home | Products and Services | Calendar | Fiber Facts | Small Business | Links | About Us

Missouri Choice Natural Fibers is a partnership between
University of Missouri Outreach and Extension,
the Sustainable Agriculture Extension Program, and fiber artisans throughout the state.
This is a pilot project to showcase fiber and fiber products from around Missouri,
provide access to continuing education resources, and to serve as a forum for fiber-related events.

This site was created by Lori Compas at the
College of Agriculture, Food and Natural Resources
at the University of Missouri-Columbia.

Comments or questions about marketing your products?
Please contact Emmanuel Ajuzie at Adjuziee@lincolnu.edu