Friday, March 1, 2013

Shop Talk: Handmade Pricing

Having a handmade shop, my favorite comment of all time is:  "You know your products are over priced" - this was some little old lady telling me I was overpricing (at the time $18.00 for a kindle case) my items... which it turns out, I was under-pricing them by at least $5.00 so no.

I also love hearing - "why would I spend so much on this bag, when I can get one kind of similar at Walmart?" - well, why don't you just stick it where the sun don't shine?!  Sorry, but seriously - our world is having this amazing return to handmade products and I think that's great, but people need to remember that behind every handmade shop is a shop owner often times struggling to get by because of this "big box store" mentality.

So to explain a few things, I have put together this little blog post to answer a few questions... and with any luck, I will continue to post similar topics about small business adventures including: packaging, social media and getting out there in the real world.

I love the "Pricing Worksheet" in Craft Inc. by Meg Mateo Ilasco.

Using the standard mark-ups provided by Craft, Inc - the Whitney Bag should retail for.... $300+ which is just a tad bit silly.  But have no fear, there's a way to work with that...

"...pricing is a balancing act between what an item actually costs and what your market would be willing to pay for it..." (Craft, Inc. pg. 84)

So here's how I calculate my prices so that they are "reasonable"... since I run a 1 person operation, there's no outsourcing I make every product 100% from start to finish from the raw materials.  This means I can cut out the labor costs that you would calculate for paid labor, charge myself a base "fee" and still make all the profit for myself (kinda backwards paying myself for the labor)... 

*Note that each material price is calculated by the sq. inch.

Okay yes, that's super... but what exactly do these numbers mean?  What goes into making a handmade product?

This is a disassembled (or rather, not yet assembled) Whitney Bag.
  • Outside of the bag:
    • Bottom: 3 separate leather pieces
    • 2 pieces of cotton
    • Top: 2 pieces of leather
  • 2 Straps: 2 leather pieces, 2 cord pieces, 8 rivets, 4 rivet attachment leather pieces
  • 1 cross body strap: 1 leather piece, 3 pieces of hardware, 1 canvas piece, 2 rivet attachment leather pieces, 5 rivets, 2 d-ring attachments, 2 d-rings
  • Inside of the bag:
    • 3 separate cotton pieces (sides and bottom)
    • 2 pieces of canvas for top, 2 invisible magnet snaps
    • 2 pockets
    • 3 pieces of bias tape
    • 1 clip
Each piece is measured (I use a set template that I trace right onto the leather for the odd shaped pieces and set measurements for the rest), traced and cut out.
I usually spend an entire day cutting out a mass amount of the raw materials so they are ready to go on assembly day.

The pieces are then sewn, finished and assembled to their respective needs: 
     Ie: all of the bag linings are assembled, the straps are sewn, the rivet holes are punched, the outsides are assembled...

So that come assembly day I can put the larger pieces together in significantly less time than if I made each bag from start to finish.

And that my friends, is how a handmade product is born and priced.


  1. Great posts and your products are always top notch!

  2. your products are worth the price because they are amazing!

  3. It is the constant dilemma, isn't it? My husband does leatherworking, and he has the same struggle. And, to be fair, I totally understand that there are folks in this world who simply don't have a lot of discretionary income, yet still need a ____________ (fill in the blank, and therefore must find the least expensive item they can. However, IF you can manage it, you are probably, in the long run coming out ahead, because you can spend $60 for something and you will own/use/love it for longer than you would if you spent $15 for a less well made version and then replaced it 3 additional times.

    I will never forget though, the time that my boss wondered aloud why I just didn't get a different car instead of constantly having to be late for work because I was dealing with a contrary automobile. It took every ounce of self-control not to tell them that part of the problem was that their salary was easily 4 times mine, and I could not afford to take on another payment at that time of my life, and maybe they should just think before they spoke. So, I do have a soft spot for folks who are truly financially strapped - but folks who are just looking to save $$ at your expense? Not so much. Your bags are indeed amazing, and well made1



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