Friday, August 28, 2009

Slaves to the Almighty Dollar

Aren't too many of us slaves to the dollar instead of following our bliss? Then again, others depend on us - spouses, children, parents... There really is no good answer except to turn your bliss into something that will make money. That requires you to be reasonable about your pricing structure. Nothing really ticks me off more than a crafter underpricing the value of their products because it's "just beadwork" or "it's just a hobby" or whatever. I don't think there is ANY defining structure in which you should devalue yourself, and I place a high value on hand made items. Maybe you are one of those people who underprices your work. Think hard about the facts.
1) Your materials did not come free. Certainly some materials are less expensive than others, but there are other associated costs that most people tend to forget. Those expenses include your transportation costs to get to the store and purchase the materials (or to pay for the internet connection to order on-line and the shipping costs).

2) Your time doesn't come free. Minimum wage in this country is now more than $7/hour. Are you charging at least that for your time? And a wage of $7/hour only gives an annual salary of $14,560. Could YOU live on that? No? Then maybe you ought to be charging more than minimum wage for your time.

3) But keep in mind that you cannot charge for the time spent in design work. You are charging for the time spent in actually doing the labor of making the item(s) that you are selling. So, build those down times that include design time into your pricing structure.

4) You have expenses to pay. Even if your "studio" is actually your kitchen table, you still pay the mortgage or rent, the utilities, the phone, etc. Those expenses have to come out of your pocket and your pocket, as we just figured out above, is only bringing in $7/hour at minimum wage. Suddenly that $7/hour has to stretch a long way.

So try to be realistic. Price your items according to your time and expertise. It is a guarantee that if you start actually valuing your product, your customers will also value it. Some of what sells a product are criteria like design, color, applicability of the product to the person purchasing it, and price. Price comes quite a way down the list. So if your products fulfil the first three criteria, then start working on that fourth one and don't devalue yourself any more!

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