Floating around in the How Do I Price My Work universe is the formula of multiplying; doubling (2x), tripling (3x), or quadrupling (4x) your Cost Of Goods (materials and supplies used to make your item). I think this formula has been around since the first crafter sold an item to her sister, neighbor, or friend. It’s very basic and easy for those of us who are creative, but not so interested in complicated mathematical formulas. However, I think even if you use this type of pricing formula you need to make sure you are getting paid for your labor.
We have a silk flower arrangement to price. The Cost of Goods (COG) to make the arrangement was $15.00 and took 1 hour to make. You would like to earn $15 per hour. If you 2x the COG you’ll price the arrangement at $30.00 and you’ll just make your desired labor fee. Researching other similar floral arrangements you find that the average arrangement sells for $50.00 online, $45.00 in a mail order catalog, and $35 in craft stores. Consider your market (who you are selling to and where you are selling) and price your arrangement accordingly.
In this example the Multiplying Formula worked well, but that’s not always the case. Let’s say I’ve determined I wanted to earn $10.00 an hour. If I was selling bracelets with a COG of $2.00 and a labor cost of $5.00 (it took half an hour to make the bracelet) and I 2x the COG, I would price the bracelet at $4.00 and not earn the labor fee I wanted. If I 3x the COG to price the bracelet at $6.00, I still wouldn’t earn the labor fee I want – I’d need more than three times the COG to reach my desired $7 price. Bottom line is that the Multiplying Formula doesn’t always cover Cost of Goods, Labor, and Overhead so be sure to keep all those things in mind when pricing your crafts.
By: Maria Nerius, FaveCrafts.com Resident Craft Expert
