Are My Prices Too High/Low?

[Former_Member]

Hello. I am very confused on how to price my items as I am having a really hard time deciding or figuring out if my items are too high or too low. I know the little formula Etsy has for cost of products, time spent, etc. But even with using that, my prices seem to come out ridiculously high. As I search for people who have similiar pieces, theirs are much lower. For example, I may have a bracelet and I come up with the price being around 20 bucks. Then I go search for a similiar item and that item (may be different colors, different charm, but same category) that item would be 3 bucks. I just don`t understand how to price my items I guess?Thank you

[Former_Member]

Michelle,

When pricing you will want to cover your cost of supplies, the cost of your time, the profit that you want for the item and any other expenses (paypal fees, etsy fees etc)

So if it costs you $5.00 in materials, and you want to make $10 per hour and it takes you 1/2 hour to make a bracelet then you will need to look at

1) cost of materials - $5.00
2) time - $10 x 1/2 - $5.00
3) profit (what you want to make to invest back into the business) - $3.00

So your minimum charge will be $13 if you are selling at wholesale prices. (when people purchase in large quantity)

Since the retail price is generally at least 2x the wholesale price you will end up charging in the neighbourhood of $26 - $30 for a bracelet if you are doing true retail.

Others will simply take the cost of supplies and multiply that by a factor of 3 to get their selling price.

You will need to experiment with your formula to figure out what works for you.

[FizziJayne]

Hi,
It's difficult when there are other sellers that may just want to cover costs or don't know how to price themselves and end up charging far less than what the item is worth.

Crochetgal's formula is great and one I use myself, my marketing and retail background also wants to add to this, what is your customer prepared to pay? By knowing your customer you can pitch you prices better across your range, don't under estimate what a customer values. Unfortunately there isn't a formula for this, just trial and error as well as getting to know your customers. I hope that helps.

[dorsetclothing]

Don't forget to include the cost of things like etsy and paypal fees. I usually add 10% of the price to cover those expenses (which gives room for a number of renews too).

But yeah, you have to find the price that's right for yourself. Each seller charges themselves a different rate (either due to not wanting to charge much, or being from a different country where cost of living varies to where you live), materials costs can vary for the same reason, and reasons why the person is making and selling the items.