Craft Fairs: How to Price & Profit – Part 1

Pricing, pricing, pricing!  “Where should I price my product?” is the never-ending question.

Every small business owner has asked it when getting ready for a craft fair. Is the price too high? Too low? From my experience, I can tell you that the bottom line is that your time is money and that there is value in that. So don’t sell yourself short by pricing too low and don’t allow inventory to just sit there by pricing items too high. I will share a 3-part series of some ideas on how you can do what you love and reap the benefits of selling at the same time.

I’d like to first share three techniques on how I come up with pricing when getting ready to sell.

Following are several factors you should consider when setting prices for your hand-made items.

1. Cost of Materials: Write down the total cost of your materials per item. If you use one yard of material, but make three items from that one yard, then divide the price of the yard by three and apply the cost to the item. Accounting for all costs is very important so you know what your break-even point is.

2. Related Costs: Account in your expenditures for the cost of the booth, any travel expenses, etc. Divide the total amount of related costs by the number of products you’ll be selling and you’ll have a better idea of the amount to add to each item sold.

3. Pay Yourself: As I mentioned before, your time is of utmost value. Set a reasonable hourly rate and multiply by the time it takes to produce each item sold.

Add these factors together and now you’ll have a better idea of how much you should charge. Another great method to set your pricing is found here on About.com.

My friend and colleague, Courtney, sold for many years at both craft fairs and Etsy. She  put together a spreadsheet that worked for her where she calculated her material costs, kept track of her hours spent, and added the various fees involved with the show. It really helped her keep track of it all in one central place, as well as to account where her time and money were going. 

The most important thing is to find a pricing strategy that works for you. But notice I used the word, “strategy.” I use that term because there really can be a “science” to it. Make sure you do not guess what a “good price” might be without taking into account your costs.  Make it worth your while by doing the homework beforehand to come up with a price that will be positive for your business.

*Next time we’ll talk about the importance of “knowing the show” and planning accordingly when pricing.