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Needed to hear this! I have been pricing as little as possible so more of my customers become regulars and buy more volume. Knowing this formula will make me feel more confident raising my prices :)
Thank you for making this! I’m a new business owner and it is tough running a business. I get super discouraged because people always want free or discounted stuff. Yet I see them go an purchase from a bigger brand who chargers two times what I charge. But I’m rebranding and improving my product plus getting a website so I’m going to raise my products and hopefully I get the right people to purchase my products🙌🏽
You got this, Christina! You are doing the best things you can to advance your business! Stay strong in your pricing and don't feel that you need to work with people who don't appreciate your work. Not every collaboration will be a good one. This video will help you find your target audience, which will be YOUR people: bit.ly/2VsuoYb
So I've heard people in other videos state the formulae and some of the principles but this is hands down the most thorough explanation I have found, and for the first time I feel like I'm not just hearing information that I'm supposed to just believe, but rather it's being explained with underlying reasons that I can make sense of. Thank you. This was very well done. Appreciated.
Man it felt so good to get validated what I suspected all along! 🤣😅 I am overwhelmed with orders and truly feel I am not charging enough for my work. Thanks for this great video! Im gonna adjust my prices 🙌
I began watching your videos and I’m learning SO much! My product is handcrafted also. I have been learning through trial and error and have been gifting my products to date. I receive fantastic feedback and many people ask if they can purchase my products, but I am not set up quite yet. I’ve been honing my craft since September 2019. I believe I have a product which is “outside the box” and believe there is a customer base for my type of creativity. I have NOT launched my business yet. However, after watching your video comparing Etsy to Shopify, I’ve decided to start with Instagram and Shopify. Initially, I was going to use the formula of multiplying my cost by 15%. However, your formula takes my time into consideration and I believe it’s necessary when you’re creating with your hands and heart! My product does require creativity, searching for the perfect elements for each “concept,” purchasing all the elements, tracking my cost, my time making my product......you know all this! I wanted to thank you for all the enormously helpful education you are sharing. Even though we are in different businesses, business advice from an experienced handcrafted product maker is worth its’ weight in gold. I am so delighted I found you and look forward to learning more! THANK YOU, Mei! Have a wonderful day!
I'm glad that my videos have been helpful to you. Definitely don't underprice your products - that does a disservice to both you and other makers in your field.
I'm still considering whether to sell my stuff or not and before I started watching your videos all I was thinking of was an Etsy shop! I now see that this would be a bad way to spend my time, sure, have an Etsy shop, but focus on the brand and PR. Hmm... I just need to figure that brand out first... 😅 These are such clear and helpful videos. I especially appreciate your honesty about your own trials and errors. Thanks again Mei! May you and your businesses continue to thrive!
Thank you so much, Jem! If you would like to have some guidance along the way as you decide where to shop and develop your brand, I have lots of resources on my website! creativehiveco.com
Here is the value I gained from you videos: You asked and answered my biggest assumptions (thank you soooo much), your visuals are very clean and simple, and last, your pace and structure is perfect. Thank you for your time and support. Alex-
Hello Mae. I do not know how I lost my subscription but I have not been getting your feels. So, I re-subscribed, hit the bell and a thumbs up. This again was just what I needed in my new business. By the way. This will be my third time trying to do this on my own. I think this time, however; I believe I can make this work in my favor. Thank you, Mae.
Thank you for watching, Crafters! You can definitely do this! I've got lots of resources for you, and if you would like some added support you can join my Facebook group: facebook.com/groups/creativebizmarketing/
@Creative Hive I think that what a lot of people don't know is the difference between 'margin' and 'markup'. I had noticed that salespeople used margin instead of markup when calculating their sales funnels, but never really understood why. Only after three years in the estimating field was it explained to me that 'margin' is how discounts to customers are calculated. The difference is that markup % is relative to your COSTS while margin % is relative to your RETAIL price. Using your pricing formula, multiplying your costs by 4 to get your retail price (R = 4*C) means that you have a markup of 300%: (R-C)/C = (4C-C)/C = 3C/C = 3 = 300%. However, your MARGIN is only 75%: (R-C)/R = (4C-C)/4C = 3C/4C = 3/4 = 75%. What a difference! Whenever you provide a discount to a customer, that % discount is in relation to your RETAIL price, not your cost. So it can be really easy to give a discount large enough to leave you in the hole! So, assuming that you only multiply your costs by 2 for your retail price (R = 2*C), that is a margin of 50%: (R-C)/R = (2C-C)/2C = C/2C = 1/2 = 50%. A discount of 50% to a customer means that you are selling AT COST without any profit -- and arguably at a loss already if your costs do not include business overhead. A greater discount means that you are definitely LOSING money.
Pricing is SUCH a tricky thing for so many people, and you can see how, with all the different terms that are thrown around! Thanks so much for sharing this!
I agree because i have tried alot of glitters but i found one that does great at customer service and makes a great product and yes they are not the cheapest but they do little things that keep me as a loyal customer. Just like you gift wrap they email to say thank you after each order as well as send a little token with the gift.
I am so discouraged. I have an eBay handmade earring business and I am hardly making sales. I make maybe one sale per month. I've raised prices, I've lowered prices, I've bundled, I have free shipping, and I also lowered prices and charged shipping. I am at a loss. I have all of this inventory and it's not moving the way I'd like. 🤷♀️
You need to get off eBay. eBay is not the best place for handmade sales. People shopping on eBay are looking for deals or looking for something rare or hard to find in stores. They aren't going to appreciate handmade pieces on that site.
Thank you Thank you I am a Newbie in Art Resin Jewelry and Freefirm Sculptures. I was wondering how to properly price my items. Researching others works became very confusing as price points varied. I'll be binge watching your channel from now on😁👏🏽👏🏽👏🏽💯 Be Blessed!
Great video, I agree with this wise insight. I am getting my Etsy store started up, and I will be selling prints, and 3d products eventually. Grateful! I will watch more of your videos!
I badly needed this. I'm happy UA-cam made the way for me to watch this vid!!! It helped me so much! I've been selling hand-painted tote bags and wallets for a year now but I think I price badly. :(( Thank you! 🧡
Don't forget the packaging and shipping.. I'm using bubble envelope, jewelry box, sticker, thank you card, my packaging is 2$ plus Im thinking about offer free shipping so I calculate it in the price too which is 4$, so 2+4=6 dollar extra for the packaging and shipping.. 😊
This is a good point! If you are offering free shipping then this should be factored into your price after you calculate you time and materials, though - this shouldn't be multiplied into your original calculations.
I'm really loving your good helpful advice thank you. I make good quality beaded jewellery. I have been making jewellery for awhile & due to health etc I had a long break. Now I'm back at it ready to relaunch my jewellery business. I'm looking for a new website that I can afford & getting ready to try putting it in shops with consignment. So I was just pricing a necklace I've made & I do have a formula but I thought I would try yours. Well your formula makes this necklace $476 retail I can't imagine it selling at that price & I can't imagine a shop willing to sell it if my retail price is that high because they'll say it's to high to mark up the price. I also tried your other suggestion in lowering my hourly wage & that made the necklace retail at $356 so still extremely expensive & I don't think it will sell at that price. I'm in Australia.
Hi! I'd love to see how you used the Pricing Calculator for your products. Could you please send me a screenshot via email? It would also help if you can include how much your competitors usually price their necklaces with similar materials and designs. Email is mei@creativehiveco.com. Thanks!
Wow, I've just come from a video that said cost price is just your materials and that cost + time/labour = wholesale, and retail is x2 of that. So essentially just a x2 formula. But you make some really valid points here, this is very interesting, my mistake has been thinking that materials + labour = retail price, what a laugh.
I was doing the same thing....People that undercharge have other means of making a living so they don't notice it ..but you have to think about if you want to make a living doing this and end up needing to hire someone...at that cost +time =wholesale.. you couldnt even sell wholesale! You need all that extra money to pay business expenses (overhead)...all of us who do crafts part time aren't realizing just how much it would cost us if it were our only source of income as our other jobs pay rents/mortgage..... Just my two cents! (what I used to make an hour)..haha
Hey... Thank you! I actually started posting my products online and i was confused about the pricing... But thanks to you and your videos! I've watched a few of them and they're really helping me selling my art🧡
I’m feeling so discharged on pricing. I’m trying to start up a small crochet business and before I multiply my cost+materials by 2 ( I know the rule is 4) she makes comments like “no one is going to pay $5 for that little thing.” I stress out every time I have to pride something.
I'm so sorry that someone isn't supportive of your efforts. But this is the way to price, and the correct price will bring your correct customer. Also, I always say, if the person giving you "advice" isn't in business themselves, then you 100% disregard it.
Thank you for your amazing videos! I completely understand your formula, but I am not sure if I can price by 4 or even by 2 😞. I'm am a complete noob on handmade business. I haven't even sold anything yet. I'm actually super lost 😓.
Not only can you, Jeimy, you should! If you are pricing too low then you aren't giving your customers confidence in the quality of the item, and you are also esentially working for free.
I am really glad I see this video because I Was not charging what are you supposed to I think I was only getting for my materials thank you for your video
Thanks for this. When you say raise the markup from overwhelming orders, how do we find the appropriate number to raise the markup by? Do we change the first or second markup?
It depends on your pricing structure. If you have a two-tiered system where the first markup covers costs and the second is for profit, consider adjusting the second markup first. However, a holistic approach might involve tweaking both markups proportionally.
Thank you for this information. Very helpful and you are interesting to listen to. You seem very kind. In my book that is the best character trait anyone can have.👍👍👍 I am a dog walker but have made a few things for my dog customers for Christmas gifts. Now their owners are asking to buy some of my items. I almost just gave them to them. Thank God my daughters stopped me from doing that. My biggest problem is I have no idea what to charge. Now I do and everything you said makes sense. So, again thank you. I am gonna keep watching your videos!🙏🙏🙏 Keep smiling🌞😀
Aww. Thank you so much for your lovely comment, Laurie!! It really means a lot to me!! ❤️ In case you need it, here's a link to my other video about pricing your handmade products: ua-cam.com/video/H3r9M3QhnNQ/v-deo.html Good luck!! ❤️
Thanks for so much insights, I'm about to open my first Etsy shop, and my wife is reluctant about me pricing my products high as I will, my huntch was right.. . I will make her see this video.
It's good that you want to charge enough that you'll still want to do it. If you're hustling around without enough pay you will stop doing. It needs to be a benefit for you and your customer!
Wow...I forgot about this formula. And you may be right about cheap prices means more sales. I have been thinking this all the time. I will use all these tips and update my prices because at the end of the year when I see my profit and expenses, including fees, my profit is not enough :( Thanks again for this video.
Hi Brenda! My pricing formula here could be helpful for you: ua-cam.com/video/H3r9M3QhnNQ/v-deo.html You can also download a free copy of my Online Pricing Calculator here: www.creativehiveco.com/pricing-handmade-items-guide/ Let me know if you have any questions. 😊
Great information. I'm confused about one thing. You mentioned that the second time you get paid is as the business owner. However, my understanding is that the entire amount isn't profit because the costs of running your business come out of that first and then the rest is profit. Am I understanding this correctly? So if I lower my hourly pay, it also lowers the amount of money available to put back into my business. Yes? Please help 😁 and thank you.
In a way, yes, but this thinking is to help your items sell. If they are priced too high and you don't have any sales, you are cutting profits entirely. Also think about the fact that if you were to hire that job out to someone, what would you pay them hourly for that work? That hourly rate wouldn't be going back into your pocket so you may want it to be slightly lower.
This pricing high/low I tried both ways & now it is almost a year since I opened my Etsy shop & only had one sale!Lots of visitors but no sales!What is wrong?
Hi! Im starting to make clothes to fund my cat (lol) and also somethings needed in my house, what if I only make one clothing (so basically its one of a kind) would that affect my pricing? Plus I take the time to press and also finish the seam with bias tape (cause i want that person to feel that clothing was made for them) Edit: I hope this gets to you! Have a great day!!
Hi Danica! You can definitely make custom clothing if that's what you want to do. That can be a time-consuming process, though, so make sure that you are pricing appropriately.
Hi Mei!! Going back to your videos again 😊 im not sure if i asked before but.... what if im a first timer to sell? Whats the healthy pricing? And if we charge lower how soon can we raise price??
Im releasing a small batch slow fashion line, everything is honemade all by me and i want to be size inclusive and made to order, right now my small accessories only cost up to $25 and I'm nervous about charging more for garmets
You are going to have to, Jilly! If everything is going to be handmade by you, you are going to have to account for all that time. When you look at some of the more popular slow fashion brands, look at their prices. They are not short-changing themselves and neither should you! 💖
thank you for your video, I am happy hear about your explanation about pricing formula, but off course if our price is higher than our competitor, we shall give additional value in our products, but for my product it's very difficult to multiply 2 then 2 again, it's very big amount in result
Yes, that's true, and most people are underpricing their work, which devalues the work for everyone else. People will pay well for really good handmade work, so I would suggest trying to increase at least a little bit.
I have a question: as a non-professional knitter,sewer and crocheter who is starting a business I tailor to younger audiences and I’m not sure how to price my products! I’m still young and don’t need to live off my business and my audience isn’t rich either. Should I still price my products so high, considering my experience and audience?
Consider factors like material costs, time invested, and a fair margin for profit. Also, don't forget to factor in your skill level and the uniqueness of your handmade creations. Finding that sweet spot where you're fairly compensated while still appealing to your audience is key. You can also checkout my pricing guide here: www.creativehiveco.com/pricing-handmade-items-guide/
What a wonderful girl, I am binge watching your videos, your knowledge and the way you explain things are amazing. I feel that you genuinely want to share and help people and you want everyone to be successful. Wonderful, wise, professional. 😍😍😍
I’m so happy I can across your channel! Thank you so much for sharing your knowledge with us...I just started doing my own resin rings for fun but will probably look into pricing very soon, what price should I start with?
I use a pricing model - always! I have a hard time adding the “artistic value” to my pricing but have started. Etsy competition has taught me to price cheap …
Hi Debbie! I'm so glad you started adding the "artistic value" to your pricing! ❤️❤️ You shouldn't compare your prices to some mass-produced shops in Etsy. Your handmade products/art is way more special! ❤️❤️
Dear Mei, I have a question. I make jewelry and since I use different kind of materials than most of other handmade jewelry shops, I think I found a product many people would like. As you can imagine it's quite special to me but I'm not sure when it comes to pricing my pieces. I just did the math for one of the designs I'm working on and it turns out the necklace would have to cost 145,48€ retail. That would make a profit of 129,40€. (That's with an hourly labor rate of 17€.) I did the math on another piece on which I spend the same labor time but less material costs so it would cost my customer 132€, 119,30€ of which would be my profit. How does that sound to you? I'm really not sure if that's way too much but I used the recommended formula. I'd be super grateful for a response 🙏 thank you so much for sharing your knowledge!
$165 for a high quality unique piece of handmade jewelry definitely isn't unheard of at all. If you are worried it is too high, you could look into sourcing your materials at a lower price or trying to streamline your technique to cut the time spent working, but I don't think your calculated price is out of left field.
I really appreciate this, but it's troubling. I looked at dozens of others who do a similar thing to what I do. If I match those prices and stay competitive, then there is no doubling...not two times and certainly not four times. My materials cost twenty. My labor is three hours at $15. I've been selling at $77 and have all the work I want. There are many on Etsy charging under fifty for a similar craft. I trust you though and will give it a shot.
This is unfortunately what happens when people underprice. Your costs are $65 and you are making $12 on each product. That isn't even enough to purchase materials for another. If you aren't comfortable with the 4x formula you can start smaller.
Thank you so much I wish I watched this video last year because I did that mistake lower my clothing prices and ended up not making profit but instead taking more out of my pocket 😪
Thank you so much for sharing this video. I am currently making fantasy jewelry with glass beads and buttons. I have no idea how to pick a price but your video just game me the formula too set my prices. I wil use this too achieve my final pricing thanks
Hi Bon Boni! It's different for everyone and how quickly you want to grow vs how much money you need to pay for your living expenses. I used to do 30% invested back into the business. But some businesses don't need to grow, they're just in maintenance mode so you can lower that to 0-10% so you're profiting more from the business.
I don't get the prices other etsy sellers make. I was already 20% above your "4 times rule" and I'm still like half the price of others. And my prices feel like fair for the product. Something I would pay for. And never for that crazy high prices. So my question is: Am I ruining the market or are the others just greedy high?
How are your sales? Are you selling a lot of your product really quickly? If you are, you may be underpricing and people know a deal when they see it. Or are you not selling much? If not, you may not be pricing yourself well and customers may think that your items are not as quality as the higher priced ones. If you are that much below other makers, though, and they are selling, I'd say you are underpriced.
@@CreativeHiveCo Thank you for responding! I'm mid stage 2 with nothing else than fancy cookie cutters, in my first year. So yeah. My sales are ok for a start. About 2 sales per day average. And my customers buy whole sets or collections at once. To me it feels fair and right though. We've risen the prices on new years eve after a long talk to many of my customers and all suggested the price I'm having right now to be ideal. Is there a "humane" strategy to slowly raise the prices without scaring away my many returning customers?
Your customers are probably not the ones who should be telling you how your prices are - most are not going to want you to raise them! That being said, you do have to be comfortable with your pricing but you should also be competitive with your market. If you decide to raise your prices you can alert your customers ahead of time, saying, "on xyz date our pricing will now be $$$" so they aren't surprised.
Hello Mei.. Thanks for the video! As a knitter, should I base the price on the actual cost of one skein of yarn if I only use half of the skein, or should I use material cost of half the skein?
Hi Lyn! Here's a more detailed video of how to price your handmade products: ua-cam.com/video/H3r9M3QhnNQ/v-deo.html Please let me know if you have any further questions! 😊
Hi I have a question. Like what's the best way to price my paintings? Since most does not require a large amount of time but some requires a lot of paint materials and such
A lot of artists will instead price their paintings by size, like X amount of money per square inch, square foot, etc. If you have a lot of materials, you are definitely going to want to use the standard formula and factor those in. I'm going to suggest this pricing playlist: ua-cam.com/play/PLd52Nr4SNc0lSKtKaAY51NEYyVQD0Kohp.html
Hi Mei. I actually have a product ready to go to market, but most of the time I will be the Middleman. My product is made in China. I am still waiting for final manufacturer costs for my product from China. I will set and example; My product in China cost $1 to make, once my product arrives, I want to sell it to a retailer for 10$ so I can make an decent profit, how much would a retailer charge to the customer? I am doing cold calling, and am offering a portfolio with my product, should include my assumed cost, and the retailers supposed retail price?
You are so welcome! Thank you so much for watching. I'm going to be doing a live workshop here today! If you're subscribed, hit the bell to be notified when it starts!
thank u very much as i really enjoyed ur video. I m confused as to the packaging material cost such as a box, packaging filler paper, tape and labels - if these also shud be marked up 4x or shud it be 2 times only? pls advise, thank you 😊🙏
🚨NEW FREE WORKSHOP FOR 2022🚨 Learn how to create a PROFITABLE handmade business online without keeping up with social media 🔽
Watch the free workshop here: bit.ly/3Lgi3xn
What if I have ₱120 cost and I want to have ₱50 labor price?
Ok. I’m now officially binge watching your channel😂. Thank you so much I’m really writing all of those down.
😂 I'm glad you're finding it so helpful, Mariam! If you subscribe, you'll get notified when I post new videos, too. I really appreciate you watching!
Ha! I was just going to write the same thing! Lots of binge-worthy content!!
Me TOO!!! 😜😜😜 EXCELLENT CONTENT!!
@@CreativeHiveCo qsusi jn
Yep, same
Needed to hear this! I have been pricing as little as possible so more of my customers become regulars and buy more volume. Knowing this formula will make me feel more confident raising my prices :)
Yes, absolutely! You definitely need to charge your worth, and you will find the right customers for your products.
Thank you for making this! I’m a new business owner and it is tough running a business. I get super discouraged because people always want free or discounted stuff. Yet I see them go an purchase from a bigger brand who chargers two times what I charge. But I’m rebranding and improving my product plus getting a website so I’m going to raise my products and hopefully I get the right people to purchase my products🙌🏽
You got this, Christina! You are doing the best things you can to advance your business! Stay strong in your pricing and don't feel that you need to work with people who don't appreciate your work. Not every collaboration will be a good one. This video will help you find your target audience, which will be YOUR people: bit.ly/2VsuoYb
Thank you for your advice! I just increased my ETSY best selling product by 20%. So, hopefully, the sales keep coming!
FANTASTIC, Jason!
Good job! You work hard creating and if you're not getting paid for your work you're going to end back to 9-5
That "NO" in the background was funny. Lots of great info! Thank you so much!!
Thank you so much for watching it, LaShawna! 💖
@@CreativeHiveCo You are welcome! Great information and tools for my new jewelry business! Love your videos!!🧡
So I've heard people in other videos state the formulae and some of the principles but this is hands down the most thorough explanation I have found, and for the first time I feel like I'm not just hearing information that I'm supposed to just believe, but rather it's being explained with underlying reasons that I can make sense of. Thank you. This was very well done. Appreciated.
Wow, thank you!
Thank you sister we need people like you
Thank you, Patrick! I appreciate that!
Man it felt so good to get validated what I suspected all along! 🤣😅 I am overwhelmed with orders and truly feel I am not charging enough for my work. Thanks for this great video! Im gonna adjust my prices 🙌
That's awesome, and I am so happy to hear that you are going to make a change! You're going to be so happy to be making more per piece.
I began watching your videos and I’m learning SO much! My product is handcrafted also. I have been learning through trial and error and have been gifting my products to date. I receive fantastic feedback and many people ask if they can purchase my products, but I am not set up quite yet. I’ve been honing my craft since September 2019. I believe I have a product which is “outside the box” and believe there is a customer base for my type of creativity. I have NOT launched my business yet. However, after watching your video comparing Etsy to Shopify, I’ve decided to start with Instagram and Shopify. Initially, I was going to use the formula of multiplying my cost by 15%. However, your formula takes my time into consideration and I believe it’s necessary when you’re creating with your hands and heart! My product does require creativity, searching for the perfect elements for each “concept,” purchasing all the elements, tracking my cost, my time making my product......you know all this! I wanted to thank you for all the enormously helpful education you are sharing. Even though we are in different businesses, business advice from an experienced handcrafted product maker is worth its’ weight in gold. I am so delighted I found you and look forward to learning more! THANK YOU, Mei! Have a wonderful day!
I'm glad that my videos have been helpful to you. Definitely don't underprice your products - that does a disservice to both you and other makers in your field.
I'm still considering whether to sell my stuff or not and before I started watching your videos all I was thinking of was an Etsy shop! I now see that this would be a bad way to spend my time, sure, have an Etsy shop, but focus on the brand and PR.
Hmm... I just need to figure that brand out first... 😅
These are such clear and helpful videos. I especially appreciate your honesty about your own trials and errors. Thanks again Mei! May you and your businesses continue to thrive!
Thank you so much, Jem! If you would like to have some guidance along the way as you decide where to shop and develop your brand, I have lots of resources on my website! creativehiveco.com
I struggle with pricing. Thank u for this!
It can definitely be tough but once you get the formula you are good to go!
Here is the value I gained from you videos: You asked and answered my biggest assumptions (thank you soooo much), your visuals are very clean and simple, and last, your pace and structure is perfect. Thank you for your time and support. Alex-
Thank you so much for that, Alex! I appreciate your kind words!
So basically, a pair of knitted socks should cost 800€...
Hm. How is your business going?
No, 850 😅😂
Oh, this hit hard. I've only doubled my prices over the last year, and I have felt the struggle as a result. Thank you for this!
Thank you for watching!
Hello Mae. I do not know how I lost my subscription but I have not been getting your feels. So, I re-subscribed, hit the bell and a thumbs up. This again was just what I needed in my new business. By the way. This will be my third time trying to do this on my own. I think this time, however; I believe I can make this work in my favor. Thank you, Mae.
Thank you for watching, Crafters! You can definitely do this! I've got lots of resources for you, and if you would like some added support you can join my Facebook group: facebook.com/groups/creativebizmarketing/
@Creative Hive I think that what a lot of people don't know is the difference between 'margin' and 'markup'. I had noticed that salespeople used margin instead of markup when calculating their sales funnels, but never really understood why. Only after three years in the estimating field was it explained to me that 'margin' is how discounts to customers are calculated.
The difference is that markup % is relative to your COSTS while margin % is relative to your RETAIL price.
Using your pricing formula, multiplying your costs by 4 to get your retail price (R = 4*C) means that you have a markup of 300%:
(R-C)/C = (4C-C)/C = 3C/C = 3 = 300%.
However, your MARGIN is only 75%:
(R-C)/R = (4C-C)/4C = 3C/4C = 3/4 = 75%.
What a difference!
Whenever you provide a discount to a customer, that % discount is in relation to your RETAIL price, not your cost. So it can be really easy to give a discount large enough to leave you in the hole!
So, assuming that you only multiply your costs by 2 for your retail price (R = 2*C), that is a margin of 50%:
(R-C)/R = (2C-C)/2C = C/2C = 1/2 = 50%.
A discount of 50% to a customer means that you are selling AT COST without any profit -- and arguably at a loss already if your costs do not include business overhead. A greater discount means that you are definitely LOSING money.
Pricing is SUCH a tricky thing for so many people, and you can see how, with all the different terms that are thrown around! Thanks so much for sharing this!
muchisimas gracias por tus sugerencias en este video ..!
Hi Luis! I had to Google Translate your comment. Thank you so much for watching!! ❤️❤️
I'm so glad I found this channel. Great content! This is exactly what I needed for my stationery shop.
I'm so happy to hear that! Thank you for watching, Diane!
I agree because i have tried alot of glitters but i found one that does great at customer service and makes a great product and yes they are not the cheapest but they do little things that keep me as a loyal customer. Just like you gift wrap they email to say thank you after each order as well as send a little token with the gift.
That's really great - some companies are really good at doing this and it definitely helps.
I am so discouraged. I have an eBay handmade earring business and I am hardly making sales. I make maybe one sale per month. I've raised prices, I've lowered prices, I've bundled, I have free shipping, and I also lowered prices and charged shipping. I am at a loss. I have all of this inventory and it's not moving the way I'd like. 🤷♀️
You need to get off eBay. eBay is not the best place for handmade sales. People shopping on eBay are looking for deals or looking for something rare or hard to find in stores. They aren't going to appreciate handmade pieces on that site.
Thank you Thank you I am a Newbie in Art Resin Jewelry and Freefirm Sculptures. I was wondering how to properly price my items.
Researching others works became very confusing as price points varied.
I'll be binge watching your channel from now on😁👏🏽👏🏽👏🏽💯 Be Blessed!
I'm so happy you found me, Cynthia! Thank you so much for watching!
Thank you for sharing all this information and awareness!!! Is super useful
I'm so glad it was helpful, MoMo Doro! Thank you for watching!
Thanks for sharing the pricing format I’m definitely going to use it!
Thank you so much for watching Danae!! Glad you found it helpful!! ❤️❤️
Great video, I agree with this wise insight. I am getting my Etsy store started up, and I will be selling prints, and 3d products eventually. Grateful! I will watch more of your videos!
I'm so glad you found it helpful! Thank you for watching! Good luck with your business! ❤️
I badly needed this. I'm happy UA-cam made the way for me to watch this vid!!! It helped me so much! I've been selling hand-painted tote bags and wallets for a year now but I think I price badly. :(( Thank you! 🧡
I'm so happy to hear that this was helpful for you, Alessandra! Thank you so much for watching.
Don't forget the packaging and shipping.. I'm using bubble envelope, jewelry box, sticker, thank you card, my packaging is 2$ plus Im thinking about offer free shipping so I calculate it in the price too which is 4$, so 2+4=6 dollar extra for the packaging and shipping.. 😊
This is a good point! If you are offering free shipping then this should be factored into your price after you calculate you time and materials, though - this shouldn't be multiplied into your original calculations.
This was something u so needed I make wire wrapped Jewelry and want to start my business but didn't know how to price it thank you
I'm so glad that it was helpful to you! Thank you for watching!
I'm really loving your good helpful advice thank you. I make good quality beaded jewellery. I have been making jewellery for awhile & due to health etc I had a long break. Now I'm back at it ready to relaunch my jewellery business. I'm looking for a new website that I can afford & getting ready to try putting it in shops with consignment. So I was just pricing a necklace I've made & I do have a formula but I thought I would try yours. Well your formula makes this necklace $476 retail I can't imagine it selling at that price & I can't imagine a shop willing to sell it if my retail price is that high because they'll say it's to high to mark up the price. I also tried your other suggestion in lowering my hourly wage & that made the necklace retail at $356 so still extremely expensive & I don't think it will sell at that price. I'm in Australia.
Hi! I'd love to see how you used the Pricing Calculator for your products. Could you please send me a screenshot via email? It would also help if you can include how much your competitors usually price their necklaces with similar materials and designs. Email is mei@creativehiveco.com. Thanks!
So helpful for me as a new business owner
I'm so happy to know this, Rebecca! Thank you so much for watching!! Good luck on your business! ❤️
Wow, I've just come from a video that said cost price is just your materials and that cost + time/labour = wholesale, and retail is x2 of that. So essentially just a x2 formula. But you make some really valid points here, this is very interesting, my mistake has been thinking that materials + labour = retail price, what a laugh.
There is so much more that goes into pricing accurately and for your worth. I'm so glad you found this video!
I was doing the same thing....People that undercharge have other means of making a living so they don't notice it ..but you have to think about if you want to make a living doing this and end up needing to hire someone...at that cost +time =wholesale.. you couldnt even sell wholesale! You need all that extra money to pay business expenses (overhead)...all of us who do crafts part time aren't realizing just how much it would cost us if it were our only source of income as our other jobs pay rents/mortgage..... Just my two cents! (what I used to make an hour)..haha
Hey... Thank you! I actually started posting my products online and i was confused about the pricing... But thanks to you and your videos! I've watched a few of them and they're really helping me selling my art🧡
I'm so happy to hear that, Vedika, and so happy for your success!
I’m feeling so discharged on pricing. I’m trying to start up a small crochet business and before I multiply my cost+materials by 2 ( I know the rule is 4) she makes comments like “no one is going to pay $5 for that little thing.” I stress out every time I have to pride something.
I'm so sorry that someone isn't supportive of your efforts. But this is the way to price, and the correct price will bring your correct customer. Also, I always say, if the person giving you "advice" isn't in business themselves, then you 100% disregard it.
Thank you for your amazing videos! I completely understand your formula, but I am not sure if I can price by 4 or even by 2 😞. I'm am a complete noob on handmade business. I haven't even sold anything yet. I'm actually super lost 😓.
Not only can you, Jeimy, you should! If you are pricing too low then you aren't giving your customers confidence in the quality of the item, and you are also esentially working for free.
I am really glad I see this video because I Was not charging what are you supposed to I think I was only getting for my materials thank you for your video
Thank you so much for watching Carina!! I'm so happy to be of help! ❤️❤️
You are amazing! Thank you for all this incredible information!
Thank you so much for watching!!
Now I get it... thank you ! Until Doing your strategies for pricing and I got $140 for 4 coasters. Definitely a little confused now 😩
Are you figuring out your materials and time for one coaster, or one set, or something different?
Thanks for this. When you say raise the markup from overwhelming orders, how do we find the appropriate number to raise the markup by? Do we change the first or second markup?
It depends on your pricing structure. If you have a two-tiered system where the first markup covers costs and the second is for profit, consider adjusting the second markup first. However, a holistic approach might involve tweaking both markups proportionally.
Thank you for this information. Very helpful and you are interesting to listen to. You seem very kind. In my book that is the best character trait anyone can have.👍👍👍 I am a dog walker but have made a few things for my dog customers for Christmas gifts. Now their owners are asking to buy some of my items. I almost just gave them to them. Thank God my daughters stopped me from doing that. My biggest problem is I have no idea what to charge. Now I do and everything you said makes sense. So, again thank you. I am gonna keep watching your videos!🙏🙏🙏
Keep smiling🌞😀
Aww. Thank you so much for your lovely comment, Laurie!! It really means a lot to me!! ❤️ In case you need it, here's a link to my other video about pricing your handmade products: ua-cam.com/video/H3r9M3QhnNQ/v-deo.html Good luck!! ❤️
Thanks for so much insights, I'm about to open my first Etsy shop, and my wife is reluctant about me pricing my products high as I will, my huntch was right.. . I will make her see this video.
Thank you so much for watching Josip! I'm so glad this video has been helpful for you!! ❤️
Thank you! I’ll be watching it again.
I'm so happy to hear that!
It's good that you want to charge enough that you'll still want to do it. If you're hustling around without enough pay you will stop doing. It needs to be a benefit for you and your customer!
Totally! ❤️ It's important that we don't underprice our products. We have to charge for what our unique, high-quality handmade products are worth.
I love your content and so far I’ve seen only 2 videos but you answeared soooooo many questions about pricing, thank you very much🙏🏻
I'm so glad to hear it! Thank you for being here, Michaela!
I'm so grateful that I've found your channel! Your info is amazing and really has me thinking! I can't wait to use this new information 😊
I'm so happy to hear that, LeeAnn! Thank you for watching!
Wow...I forgot about this formula. And you may be right about cheap prices means more sales. I have been thinking this all the time. I will use all these tips and update my prices because at the end of the year when I see my profit and expenses, including fees, my profit is not enough :( Thanks again for this video.
I'm so glad it was helpful for you, Gaby! Thank you for watching!
You are informative and easy to listen to. Thanks for sharing your knowledge.
Thank you so much!! ❤️❤️
I have a question, on the material cost, do we need to add listing fees, credit card fees, etc? Thanks, Gaby from Gabeadz
Hi Gaby, you can add those fees into your pricing for sure.
@@CreativeHiveCo Thank you for your reply. So, those fees should be added after I get my retail price?
Yes, because those fees may not be applicable in all situations. Add them in after your base retail price based on the selling situation.
@@CreativeHiveCo thank you again for your time and help, really appreciate it. 🤗😘
Hi Mei, Thank you for sharing all your helpful information.
Thank you so much for watching, Deezigns!
I needed this validation tonight. Thank you! So helpful
Yay! I love hearing that Megan!
Thank you, did help with formula . I am going to start implementing it. ☺️
Wonderful!! Let me know how it goes Deborah!
Hello. Do you have a video on how to determine material costs? Like generally what to include
Hi Brenda! My pricing formula here could be helpful for you: ua-cam.com/video/H3r9M3QhnNQ/v-deo.html You can also download a free copy of my Online Pricing Calculator here: www.creativehiveco.com/pricing-handmade-items-guide/ Let me know if you have any questions. 😊
Thank you sooo much. THIS was exactly what I needed!!!
I'm so glad it helped!
Great information. I'm confused about one thing. You mentioned that the second time you get paid is as the business owner. However, my understanding is that the entire amount isn't profit because the costs of running your business come out of that first and then the rest is profit. Am I understanding this correctly? So if I lower my hourly pay, it also lowers the amount of money available to put back into my business. Yes? Please help 😁 and thank you.
In a way, yes, but this thinking is to help your items sell. If they are priced too high and you don't have any sales, you are cutting profits entirely. Also think about the fact that if you were to hire that job out to someone, what would you pay them hourly for that work? That hourly rate wouldn't be going back into your pocket so you may want it to be slightly lower.
@@CreativeHiveCo thank you for always replying. You're the best!
This is super helpful. Its superhard to price my jewelry so thank you for this info.
Glad it was helpful! Thank you for watching, Kyle!
Thank so much ! ❤
This pricing high/low I tried both ways & now it is almost a year since I opened my Etsy shop & only had one sale!Lots of visitors but no sales!What is wrong?
Without seeing your shop it's hard to say! It might not be pricing but something like SEO.
OMG you're an answer of my pray... 😭 Thank you for sharing this ❤️
Aww, I'm happy to hear it helped! Thank you so much for watching, Stella!
this video was great. i really did enjoy it. thank you so much
Glad you enjoyed it! Thank you so much for watching!
Hi! Im starting to make clothes to fund my cat (lol) and also somethings needed in my house, what if I only make one clothing (so basically its one of a kind) would that affect my pricing? Plus I take the time to press and also finish the seam with bias tape (cause i want that person to feel that clothing was made for them)
Edit: I hope this gets to you! Have a great day!!
Hi Danica! You can definitely make custom clothing if that's what you want to do. That can be a time-consuming process, though, so make sure that you are pricing appropriately.
I enjoy your videos; you are smart and informative. Thank you for all of them.
Thank you so much for the kind words, Catherine! I'm so happy you're enjoying my videos! ❤️
Hi Mei!! Going back to your videos again 😊 im not sure if i asked before but.... what if im a first timer to sell? Whats the healthy pricing? And if we charge lower how soon can we raise price??
You might want to checkout Creative Hive's Pricing Calculator here: www.creativehiveco.com/pricing-handmade-items-guide/
New subscriber and Thank You for this
Thank you so much for subscribing, Mona! Welcome to the Creative Hive community!! ❤️
This is so helpful. I would have walked smack into these mistakes...thank you thank you thank you.
I'm glad this was timely for you, Caroline! The last thing you want is pricing errors.
Im releasing a small batch slow fashion line, everything is honemade all by me and i want to be size inclusive and made to order, right now my small accessories only cost up to $25 and I'm nervous about charging more for garmets
You are going to have to, Jilly! If everything is going to be handmade by you, you are going to have to account for all that time. When you look at some of the more popular slow fashion brands, look at their prices. They are not short-changing themselves and neither should you! 💖
thank you for your video, I am happy hear about your explanation about pricing formula, but off course if our price is higher than our competitor, we shall give additional value in our products, but for my product it's very difficult to multiply 2 then 2 again, it's very big amount in result
Yes, that's true, and most people are underpricing their work, which devalues the work for everyone else. People will pay well for really good handmade work, so I would suggest trying to increase at least a little bit.
So informative!!!!!👍🏼👍🏼👍🏼👍🏼
Thank you so much for watching Darryl!! ❤️❤️
I have a question: as a non-professional knitter,sewer and crocheter who is starting a business I tailor to younger audiences and I’m not sure how to price my products! I’m still young and don’t need to live off my business and my audience isn’t rich either. Should I still price my products so high, considering my experience and audience?
Consider factors like material costs, time invested, and a fair margin for profit. Also, don't forget to factor in your skill level and the uniqueness of your handmade creations. Finding that sweet spot where you're fairly compensated while still appealing to your audience is key. You can also checkout my pricing guide here: www.creativehiveco.com/pricing-handmade-items-guide/
Thank you , the video was profitable for me, I love the relativity in your ideas, Its very insightful
Thank you so much! I'm so happy you loved it!! ❤️❤️
What a wonderful girl, I am binge watching your videos, your knowledge and the way you explain things are amazing. I feel that you genuinely want to share and help people and you want everyone to be successful. Wonderful, wise, professional. 😍😍😍
Awww, thank you, Alicja! That is so nice of you to say - I appreciate it so much.
I’m so happy I can across your channel! Thank you so much for sharing your knowledge with us...I just started doing my own resin rings for fun but will probably look into pricing very soon, what price should I start with?
It will depend on your materials cost and the time it takes you to make your products. This will help: ua-cam.com/video/H3r9M3QhnNQ/v-deo.html
I use a pricing model - always! I have a hard time adding the “artistic value” to my pricing but have started. Etsy competition has taught me to price cheap …
Hi Debbie! I'm so glad you started adding the "artistic value" to your pricing! ❤️❤️ You shouldn't compare your prices to some mass-produced shops in Etsy. Your handmade products/art is way more special! ❤️❤️
Thank you, i am starting a new business selling body butter, body scrubs, body oils, and your video was helpful. I even subscribed !
Thank you so much for subscribing, and good luck with your new business!
Hi Mei,
Again very useful and certainly enables me to home in on the formula plus value methodology. Thank you again. Kuljeet
Glad it was helpful to you. I hope you will be able to use the information in the future!
I love your videos, I’ve been learning a lot with you! Thank you so much ;)
I'm so glad to hear that, Karla! I really appreciate you saying that. 😊
You are exactly what I was looking for.
I'm happy to hear that! Thank you for being here!
Dear Mei, I have a question. I make jewelry and since I use different kind of materials than most of other handmade jewelry shops, I think I found a product many people would like. As you can imagine it's quite special to me but I'm not sure when it comes to pricing my pieces. I just did the math for one of the designs I'm working on and it turns out the necklace would have to cost 145,48€ retail. That would make a profit of 129,40€. (That's with an hourly labor rate of 17€.) I did the math on another piece on which I spend the same labor time but less material costs so it would cost my customer 132€, 119,30€ of which would be my profit. How does that sound to you? I'm really not sure if that's way too much but I used the recommended formula. I'd be super grateful for a response 🙏 thank you so much for sharing your knowledge!
$165 for a high quality unique piece of handmade jewelry definitely isn't unheard of at all. If you are worried it is too high, you could look into sourcing your materials at a lower price or trying to streamline your technique to cut the time spent working, but I don't think your calculated price is out of left field.
@@CreativeHiveCo Thank you so much for the response!
I really appreciate this, but it's troubling. I looked at dozens of others who do a similar thing to what I do. If I match those prices and stay competitive, then there is no doubling...not two times and certainly not four times. My materials cost twenty. My labor is three hours at $15. I've been selling at $77 and have all the work I want. There are many on Etsy charging under fifty for a similar craft. I trust you though and will give it a shot.
This is unfortunately what happens when people underprice. Your costs are $65 and you are making $12 on each product. That isn't even enough to purchase materials for another. If you aren't comfortable with the 4x formula you can start smaller.
@@CreativeHiveCo Thank you
Thankyou. it was much needed
Thank you for watching!
Thank you so much I wish I watched this video last year because I did that mistake lower my clothing prices and ended up not making profit but instead taking more out of my pocket 😪
It happens to so many of us, Shanise! The important thing is you know and it can be corrected going forward.
Thank you so much for sharing this video. I am currently making fantasy jewelry with glass beads and buttons. I have no idea how to pick a price but your video just game me the formula too set my prices. I wil use this too achieve my final pricing thanks
I'm so happy to hear that! It's so important to have the right pricing so that you are not underselling yourself.
I need this information…..ThankYou❣️
Thank you so much for watching, Katherine!! ❤️
Dear Mei, what % of money do you recommend to take from profit for investing back in business? Thank you in advance 😊
Hi Bon Boni! It's different for everyone and how quickly you want to grow vs how much money you need to pay for your living expenses. I used to do 30% invested back into the business. But some businesses don't need to grow, they're just in maintenance mode so you can lower that to 0-10% so you're profiting more from the business.
I don't get the prices other etsy sellers make. I was already 20% above your "4 times rule" and I'm still like half the price of others. And my prices feel like fair for the product. Something I would pay for. And never for that crazy high prices.
So my question is:
Am I ruining the market or are the others just greedy high?
How are your sales? Are you selling a lot of your product really quickly? If you are, you may be underpricing and people know a deal when they see it. Or are you not selling much? If not, you may not be pricing yourself well and customers may think that your items are not as quality as the higher priced ones. If you are that much below other makers, though, and they are selling, I'd say you are underpriced.
@@CreativeHiveCo Thank you for responding! I'm mid stage 2 with nothing else than fancy cookie cutters, in my first year. So yeah. My sales are ok for a start. About 2 sales per day average. And my customers buy whole sets or collections at once. To me it feels fair and right though. We've risen the prices on new years eve after a long talk to many of my customers and all suggested the price I'm having right now to be ideal.
Is there a "humane" strategy to slowly raise the prices without scaring away my many returning customers?
Your customers are probably not the ones who should be telling you how your prices are - most are not going to want you to raise them! That being said, you do have to be comfortable with your pricing but you should also be competitive with your market. If you decide to raise your prices you can alert your customers ahead of time, saying, "on xyz date our pricing will now be $$$" so they aren't surprised.
@@CreativeHiveCo thank you! Your advice really helps me a lot ❤ You make me feel more settled in my position and inspire me to grow
Thanks for the advice its help me a lot.
Glad to hear it! Thank you for watching, Barry!
Great information! Thank you so much for sharing. This has been very helpful. 👍🏼
I'm so happy to hear that! Thank you so much for watching, Blanca!
Hello Mei.. Thanks for the video! As a knitter, should I base the price on the actual cost of one skein of yarn if I only use half of the skein, or should I use material cost of half the skein?
Hi Lyn! Here's a more detailed video of how to price your handmade products: ua-cam.com/video/H3r9M3QhnNQ/v-deo.html Please let me know if you have any further questions! 😊
@@CreativeHiveCo Thanks!!
This is really good thank you , i was just getting onto stay, and you dropped a lot information
Glad it was helpful, Jeremy! Thank you for watching!
Hi I have a question. Like what's the best way to price my paintings? Since most does not require a large amount of time but some requires a lot of paint materials and such
A lot of artists will instead price their paintings by size, like X amount of money per square inch, square foot, etc. If you have a lot of materials, you are definitely going to want to use the standard formula and factor those in. I'm going to suggest this pricing playlist: ua-cam.com/play/PLd52Nr4SNc0lSKtKaAY51NEYyVQD0Kohp.html
Lovely video. This is exactly more less how I planned my pricing. 😍
That's great! It's nice to know you are on the right track.
That was super insightful, I am definitely going use these tips!
I'm so glad to hear that, Sherese! Thank you!
Hi Mei. I actually have a product ready to go to market, but most of the time I will be the Middleman. My product is made in China. I am still waiting for final manufacturer costs for my product from China. I will set and example; My product in China cost $1 to make, once my product arrives, I want to sell it to a retailer for 10$ so I can make an decent profit, how much would a retailer charge to the customer? I am doing cold calling, and am offering a portfolio with my product, should include my assumed cost, and the retailers supposed retail price?
Hi there! You can check out my pricing guide here: www.creativehiveco.com/pricing-handmade-items-guide/
Love your price set up thank you 😊
Thank you, Joshua! ❤️
Thank you so much,now I learned how pricing goes :)
So glad I could help! Thank you so much for watching!
Thanks for the tips, you are so easy to follow and understand! Do you have any videos on how to calculate income and profit?
You can check this one out! ua-cam.com/video/H3r9M3QhnNQ/v-deo.html
@@CreativeHiveCo Thank you!)
thank you for these video
Thank you for watching, Michael!
Thank you so much for all you share!
You are so welcome! Thank you so much for watching. I'm going to be doing a live workshop here today! If you're subscribed, hit the bell to be notified when it starts!
thank u very much as i really enjoyed ur video. I m confused as to the packaging material cost such as a box, packaging filler paper, tape and labels - if these also shud be marked up 4x or shud it be 2 times only? pls advise, thank you 😊🙏
Packaging materials should be added into your shipping costs and not marked up.
@@CreativeHiveCo thank u very much. appreciate it 🙏
Me too I love your teaching style.
Thank you Brenda!
My first thought is you are so beautiful 💜 Thank you for the business tips!
Thank you, Zyanna! I appreciate you watching!
Thanks... Just needed to learn cis ✌️
Thank you so much for watching, Senna!! ❤️