Arts & Crafts Magazine

Handmade Pricing-The Perennial Question

By Somanycolors
I've been working on a new web site for about a month. The old one expired last fall while I was out of commission with nerve damage from a muscle spasm in my back. I wasn't that happy with the site anyway (it didn't offer shipping calculations or coupon codes) so I didn't renew when I was feeling better.
All of the content is finished but before it goes live I need to revisit pricing. Large corporations have entire departments dedicated to costing and pricing. But for the artisan, pricing is a perennial struggle. The topic frequently comes up in posts on Etsy and many blogs have tackled the issue.
I did a bit of cost analysis before I listed my first hand dyed fabric. Before I open the new web site, and especially before I do the Original Sewing and Quilt Expo in Cleveland, I need to take a closer look. I'm listing my costs and other considerations here to give you an idea of the things you may need to look at when setting your pricing.
Direct Costs
  1. Fabric-This is by far my greatest expense. I've been able to buy it at bolt pricing from all of my suppliers. However, when I first looked at my pricing I included only the price and shipping. I'm now recalculating my cost per yard to include shrinkage and waste from truing up dyed pieces. Shrinkage is minimal on most of the fabric but the interlock can shrink as much as 8% in length. And no matter how straight I cut the fabric before dyeing, I always lose 6" per piece when I true up the finished pieces. Since I dye in 3 yard lengths this can add up over hundreds of yards
  2. Dyes and Auxiliary Chemicals-Dyes are expensive but a little goes a long way. Buying soda ash in 50 lb containers keeps that cost down. I haven't found a way to cut down on the cost of canning salt other than buying by the case from my local grocer. Salt is only used for solid colors but I use a lot-not as much as many instructions suggest but a lot per batch.
  3. Detergent and Fabric Softener-Fabric needs to be scoured with detergent and a little soda ash before dyeing then washed again after several cold and hot rinses.
  4. Water-While I group fabric when scouring, rinsing and washing, I go through a lot more water than a normal household.
  5. Heating Water and Drying-There is simply no way around using very, very hot water. The thermostat on the water heater is always on high when I'm dyeing. If I don't use temps of at least 140 degrees F, the unattached dye molecule don't rinse out. For drying, I have yards of clothes line strung up to get the fabric to a damp-dry state but it must be machine dried to remove wrinkles and shrink to it's final length.
Time
  1. I know pretty much how much time it takes to dye 15 yards of fabric. What I didn't calculate originally was the time to prep the fabric: cut it into manageable pieces off the bolt or, more often, from a 50 yard jumble of  66" wide fabric, then scour.
  2. I also neglected the time to check for flaws, measure and fold after dyeing.
  3. Then there are the photos-at least good 3 shots of each fabric which translates, for me, about 20 pics per fabric. I now have a system for "styling" the fabric on the mannequin, straight on and gathered. I have another system for touching up, cropping and saving to two sizes. Two sizes (1000 pixels and 500 pixels) are needed for listing on different venues. I don't enjoy the photography process at all but, for now, I have more time than money. One day I hope to be able to hire a photographer.
  4. Listing unique pieces on Etsy, ArtFire and my web site also takes time. I copy and paste basic information but each piece needs a description of the color and I spend a bit of time finding a name which helps describe the color.
  5. Web site content is another task I do myself. I use a template provided by the host but the content is all mine. With a tiny bit of programming background and a lot of reading in the forum I've been able to get the job done. Unlike photography I will probably always do this myself. 
  6. Almost forgot about blogging, tweeting, FB, posting to Flickr.
Marketing Expenses
The expenses I'm listing here are probably sales expenses but since I don't advertise elsewhere I consider them marketing expenses.
  1. Etsy has listing fees and transaction fees for each sale.
  2. ArtFire has a monthly fee only and since I signed up during their big promo it's only $5.95 per month.
  3. Web hosting, again a monthly fee.
  4. I use PayPal to process payment for all sales venues with transaction fees for each sale.
  5. And now for the big one: retail shows. This is not an expense to be taken on lightly. The show I'm doing in Cleveland has a substantial though not unreasonable booth fee. Since I'm in Detroit, travel won't be bad unless gas prices continue to climb but there will be food and hotel expenses.
  6. Add on display shelving, business cards, fliers, fabric donations for the three daily prize drawings and the tote bag promo I blogged about recently.
  7. Sample garments will be displayed in the booth but won't be for sale. While it takes time to sew and takes fabric out of my inventory this is an essential marketing tool.
  8. Coupons. I offer coupons for PatternReview.com members and for folks who "like" my business Facebook page. Will probably also offer some incentive at the show.
Skill Development
Dyeing fabric is not difficult. It can be strenuous and it takes some time but the big thing is the learning: how to mix colors, understanding the chemistry, and how to dye different types of fabrics. For example, the LWI technique I use for heavier fabrics like the cotton interlock and cotton/lycra don't work on the finer modal cotton blends I've just started working with. The yarns are much finer and knit more closely standard LWI results in almost solid color. It took at least 7 trials using different techniques to get the look I want. As I expand the fabric line the learning will continue. And color mixing will be a life long endeavor. I sometimes wish I had unlimited resources and could spend every day just trying different dye combinations. I just love this part of the work!
I'll probably think of a few more time and materials costs as time goes on but these are the main ones for my business. Listing them helps me to avoid under-valuing my product, a common problem in the hand made world.
I hope this has helped those of you with your own business think about all of the time and material costs you incur. And if you need more help, just Google "handmade pricing." There are a wealth of resources out there. Read about the different ways others calculate pricing. Honestly list your costs then come up with a formula that will allow you to make a profit. Your time has value, handmade has value and quality has value.

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