You started your craft business because you love creating. You spend so much time and effort to make sure that every piece is perfect from the intricate details and the materials that you use, to the photos you take of the finished product. But despite all of the passion and effort you put in, are you actually making any money?
If you’re feeling like your work is undervalued or you’re barely making enough to cover your supply costs, you’re likely making the #1 mistake that sabotages handmade businesses:
You’re underpricing your work.
The Heartbreaking Truth About Underpricing
Many crafters fall into this trap for various yet common reasons:
- Fear of High Prices: “No one will pay that much for a handmade item!”
- Undervaluing Your Time: “It’s a hobby, so my time isn’t worth much.”
- Comparing to Mass-Produced Items: Trying to compete with big box store prices.
- The “Pleaser” Mentality: Wanting everyone to be able to afford your work.
But here’s the harsh reality: when you underprice, you’re not just losing potential profit; you’re actively losing money. Your skills, the time you’ve spent and your passion for what you’re doing is being undervalued! This is so important because when you’re operating at a loss and putting in so much effort just to break even, you will quickly face burnout!
The Hidden Costs of Handmade (You’re Probably Forgetting!)
Pricing isn’t just about materials. A truly profitable price accounts for everything that goes into your product. Are you considering:
- Your Time (Hourly Wage): This is your most valuable asset! How much money do you want to be making per hour? Be realistic.
- Material Costs: Every thread, bead, paint drop, glue stick, and template. None of this is free.
- Overhead Costs: The “invisible” expenses like:
- Tools & Equipment: Your crochet hooks, cutting machines, sewing machine, lighting.
- Utilities: The electricity for your craft room, heating/cooling.
- Software & Subscriptions: Your Etsy fees, website hosting, design apps.
- Packaging & Shipping Supplies: Boxes, tissue paper, tape, labels.
- Marketing & Advertising: Any money spent promoting your work.
- Education: That new course you bought, the workshop you attended.
- “Invisible” Work: Product research, design, pattern testing, photography, listing creation, customer service, packing orders, running to the post office.
If you’re not factoring in these costs, you’re almost certainly selling yourself short.
How to Fix It: Price for Profit, Not Just Passion
Breaking the underpricing cycle requires a shift in strategy and courage. It’s about knowing your numbers and valuing your skills. This can be hard for all creators because our work is very personal. It’s hard for many of us to compare that to things we can buy in a store. For example, a crocheted beanie might take hours to make and you’ve had to buy the materials to create it…but if you go to a “big box” store you can find a beanie for around $6. You can’t sell your handmade beanie for $6. So how do we figure out YOUR price?
- Calculate Your Costs Meticulously: Don’t guess. Track every expense down to the smallest bit of thread. This includes your time!
- Research Your Market: Look at what similar, truly handmade items (not mass-produced) are selling for. Visit local markets, browse Etsy. What are other crafters in your specific niche charging? But be wary, some of them are undercharging too.
- Understand Your Value: What unique skill, aesthetic, or benefit do you offer? People are willing to pay up for unique products that they can’t get at big-box stores.
- Add Your Profit Margin: This is the money left over after all your costs are covered. This is what allows your business to grow, allows you to invest in better tools, and ultimately, provides you with an income!
Pricing isn’t about being greedy; it’s about being sustainable. It’s about ensuring your passion can genuinely support you and continue to bring joy (and income!) for years to come.
Ready to Master Your Pricing (and Your Profit)?
Underpricing is just one piece of the puzzle. To truly build a profitable handmade business, you need a comprehensive strategy – from finding your target customer to mastering marketing and scaling your business.
Our Profitable Crafter’s Blueprint dives deep into every aspect of building a sustainable, income-generating craft business. We’ve dedicated an entire module to pricing for profit. We want to make sure that you never undervalue your work again!
Subscribe here to be notified when it’s ready!
Stop leaving money on the table. It’s time to get paid what you’re worth!
