The formula for pricing anything in the business world is: materials + Handmade Artist’s time (at the rate of what-ever you pay yourself per hour) + overhead (time you spend: shopping for supplies, book keeping, getting ready to ship, designing any portion of your packaging/display/etc, listing items online; portion of internet fees if not just for business, fees of all other sorts, and then there is gas and mileage.) X 2 = wholesale. Multiply by that by 2 and you have your “profit” which usually goes back into the business for the first couple of years.
So HOW does someone make any money selling earrings for $6.50? And take care of all of what the aforementioned formula discusses? Nice and cheap, yes? So let’s examine this price. Said pair of earrings materials cost is: $.84 for sterling earring hooks, $.89 for Bali tips, $.90 for semi-precious beads, $.89 for bead caps, $1.12 for spacers, $.24 jump rings. This equals to $4.88 for materials alone.
Now let’s conjecture they want to be paid $10.00 an hour (too low in my opinion)and it took 15 minutes to do the earrings, equaling $5.00 (it would probably not take that long but I am playing with mathematical figures for this example). Their Overhead is calculated at $2.20 for 15 minutes. That would all equal to $12.08 now times 2 = $24.16 WHOLESALE.
This person is LOOSING $17.66 in order to price their beautiful handmade earrings at WalMart prices, and undercuts everyone else who is trying to make a living. The consumer does not care…they get a pair of earring at sweat-shop prices!!
This all holds true for any type of handcrafted artwork done! Especially for those artists who create for a living, and are professionally trained.
So…my point is this: THINK ABOUT WHAT YOU ARE DOING WHEN YOU UNDERCUT YOUR FELLOW CRAFTERS! You are cutting into their rent money, grocery money, etc. Don’t just price by WalMart standards.
First of all, if you value your own work…you KNOW your work is better quality! Secondly, WalMart purchases manufactured goods in bulk. Note the word: manufactured. That is it. In a nutshell…diatribe is done!