maximise revenue Archives - Stickytapeandstring

Firstly if you are reading this CONGRATULATIONS on finishing your handmade project. Finishing projects is not my particular strength but I am super good at starting them ?

I love to browse the beautiful projects on Etsy and Ravelry and I believe that all the lovely creative people who make them deserve to be rewarded appropriately for the joy and beauty their work delivers. However, when I checked out the pricing of these amazing handmade products it appears to me that it is often grossly undervalued by the creator!

My current passion is crocheted blankets. Looking on Etsy I found that pricing in that category has a huge range. Some blankets are priced at £1,000 + and are commission only or designer one-offs made with expensive yarn. However, some are priced at a level that looks to barely cover the cost of the materials.

There are several different ways to value your work for sale and the best method for you really depends on your overall goal.

The basic approach. If you were producing goods for sale in a commercial world you would work out the full cost of your raw materials, add in the cost of your time and any overheads and apply a profit margin to get your price excluding shipping cost. From a review of handmade goods for sale on Etsy, I can see some examples of this type of pricing but in many cases the prices being charged look too low for this to have been the calculation used.

This means at first impression, either craft workers are selling their work at a loss or grossly undervaluing their time. It could be that they are selling individual projects at a loss but overall their business is making a healthy profit… interesting?

There are many possible reasons you are looking to sell your work but most of us are looking to make money one way or another!

If making money is your primary objective, is the income from selling your finished products where you will make that money? This might sound like a strange question but…. bear with me….

Let’s assume you spend hours producing a beautiful crocheted blanket. The cost of yarn alone is likely to be at least £25 and could be far more than £100 for premium yarns. Add in the time to make the item… again this will be a huge range of values let’s assume 90 hours which would mean two hours a day for a month and a half. In the UK we have a national minimum wage which pays adults between six and eight GBP per hour so to simplify let’s go for the middle of the range and say £7 per hour. This means the labour cost of your project is 7 multiplied by 90 i.e. £630.

I am not sure whether you would expect to earn the minimum wage for your talented creative time but that is the minimum value that the outside world would place on your time in employment in the U.K.

Keeping things simple, you can see that the cost of producing the blanket is £630 for your time plus at least £25 for the materials giving COST £655. This means that you have to charge at least this much to avoid making a loss. The value you calculate for your time is the same as a wage or salary compensating you for your time. Anything you sell the item for on top of this cost is the profit you make. I have put together a worksheet to help you with pricing your project. Here is the free download. I hope you find it helpful. Pricing basics (18779 downloads ) . This is what it looks like completed for a project.

I have not completed the commission cost as this is a function of the price on some selling sites. You do need to consider this cost when working out how much you are earning. I do not include shipping costs to your customers as these are normally on top of the sales price.

If craft projects are not your source of income and you ‘donate’ your time for the love of the craft then all you have to consider is your cost of yarn and any overheads. Anything above that would be ‘profit’. However, do consider, your time is a limited resource. You can only produce so many items. You would need to view this as a way of funding your hobby rather than anything you can build a business on.

There are other ways to make money from your work. In the example above, you have spent let’s say 180 hours to create a single product. If you want to make a living, you have to cover the cost of those 180 hours with the sale of that one product. What if you had two products at the end of the project? You would spread the cost of that time over those two products! The main source of your income is the primary product but you can make secondary products from the same effort.

1. If your project was designed by you, the best secondary product from your work would be the pattern or instructions to produce the work. You need to write up the pattern or instructions. Ideally get those instructions tested by someone else. Save the pattern as a PDF type file and you then have something you can offer for sale as many times as you like. This means those original 180 hours have produced a number of products that is only limited by the demand from your clients! You could end up making more money from the pattern than from the finished item! I will put out a more detailed post on this in future.
2. You could photograph the work and put those images up for sale.
3. You could put short video tutorials together showing your work in progress and explaining any tricky elements. Again these videos can be monetised.
4. If you enjoy writing you could consider blogging about your craft. Using images of your work and explaining the techniques used. There are many free resources to show you how to start and monetise a blog. This link takes you to one of my first posts where I go into more detail on getting set up and the free tools I used. Starting a blog is easy follow the link below, pick a name for your blog and sign up for a low cost plan. Note this link is an affiliate link which means I could receive a small payment at no additional cost to you. This is how I keep my blog going.