Pricing Handicrafts

Whenever you sell something, you need to be sure that you are charging enough for it in order to cover your costs and make a fair profit. Collecting and analyzing this data is known as a price analysis. One area that has been studied recently is the global market for handcrafted goods from India. For centuries, the only way to get these items was to travel to India as a tourist and bring them back, but thanks to the development of global markets and cheap transportation, embroidered silks, carvings, metalwork and more are available worldwide. This means that prices have to be set, and that is where price analysis comes in.

Control for Variables

Many things go into determining the price of an item and handmade goods can be tricky. Some costs are fixed; for example, the cost to purchase supplies and raw materials and transportation cannot be controlled by the artist most of the time. The cost of the artist’s time is where the wiggle room comes in. A key consideration for artists is that they are fairly compensated for their work, although this is not always the case. Setting an income target for the business is important before determining a price.

Research the Market

Examine the markets where the items will be available. Are the items high-end home furnishings that will go to brick and mortar stores, or are the products lower-end items that will be available at discount stores like Walmart or Target or online? Will the items be displayed at trade shows where buyers can see and feel the items and then place orders? Is the item considered a niche product with few outlets but a high price tag? All of these points need to be considered.

Analyze the Audience

You also need to think about who is going to buy the artwork. Will this be a large, one-time purchase, such as a piece of furniture or a large carving, or are customers going to buy multiple pieces over time, such as with dishes, glassware or linens for the home? Analyze your audience to help you create the kind of goods people are likely to buy.

Check Out the Competition

Research what else is out there. Multiple sellers are not necessarily a bad thing. Because handcrafted items tend to be one of a kind, customers may be willing to buy the same kind of thing from several different sellers and may appreciate the variety.

After you have gathered the data, a price analysis will indicate how prices should be set in order to meet your business goals. This kind of tool can make or break a business.

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