Here it is!! Now, this is a really difficult aspect of doing a craft show. What price do you make your items, and how do you know if you're making any profit off of them? Well, it's actually pretty simple. It does require some math (nothing a phone calculator can't handle) and a little bit of time, but it's worth it.
So, first I suggest making an inventory list. Yes, that means giving everything a number and typing it all on a spreadsheet. It's really not that bad. Make it easy by organizing. If you have a few different categories of items keep them categorized. And start with big numbers. Like in the thousands, because then you have wiggle room. You have to make and inventory 1000 items before you run out of numbers. For example, I have different categories such as - vases, hair pieces, shoes, etc. So, the first vase on my list is 1000, then the second is 1001 and so on. Then, we go to a different category, like hair pieces. They start at 2000 and go on, then the next one is 3000 - you get the idea. Also, on spreadsheet, you can have as many different tabs in one document as you want! For me it makes it easy to navigate through my items if they are all together and I just have to click a little tab at the bottom to look at a different one. Rather than having like 7 different documents open trying to find the one that is vases. Now, make sure that you label each and every item that you have with a number, and type a description into your spreadsheet. If you have tags for your items, go with that. Otherwise, use little stickers. Like those little round colorful dots. Then, when you sell the item, you can either write down the number or take off the sticker and stick it in a notebook. That way, you can go back later, after the show, and figure out what you sold. I've seen people who just write out every item they have in a notebook, then try to find that particular item they are selling to cross it off. If you do have a customer ask about a specific item, look at your inventory sheet, find the number of the item, then look at your notebook, and if you don't see the number then you should still have it, That simple.
Now on to pricing. There are a lot of formulas out there for pricing items. I'm going to give you the one I use, and you can decide if it works for you. It's not super straight forward, because there's a part where you have to go backwards. Let me explain.
I start by calculating my costs. How much do the materials cost to make each item? Now this might take a little bit of thinking and guess and check. If you used something that only comes in bulk, such as fabric or yarn, it gets kind of hard. Let's use fabric as an example. Figure out approximately how many items you can get out of one yard. Then, take that number and divide it by the cost of one yard of material. That's your cost per item. Get the idea? Now, add up the little things, like buttons, glues, protective coats, even wear and tear on machines, needles, etc. Now, those are going to be very miniscule in most cases, and probably not worth the time, however, think about it. If you are going to be able to make thousands of pieces with that sewing machine, it's not going to be enough to be significant. But there are other types of things like that to consider, so take a second to think if there is anything. So, after you have all of that, you need to pay yourself. This is kind of a mixed topic. I have a business education, so I am absolutely for paying yourself. You are never going to have a legitimate business if you can't make a profit, and if this is something you want to use to make yourself self-sufficient, then you absolutely need to do this. Now, don't go crazy, start small. When you first start at a job you don't get to make a ton of money. But take that amount and figure out how long it takes to make one piece. If you have smaller pieces there shouldn't be a very high cost on this. I understand that you want every piece to be perfect so you want to take your time and what not, but it's not always for the best. If this is just a hobby that you want to make some side spending money with, go for it. If this is something you want to be more of a legitimate business, then make the pieces correctly, and make sure every single one is quality work, but you want to be able to make a lot of them, so you can sell them, right?
So your cost of materials plus your hourly wage x the hours you worked = your cost of one piece. Now if this seems really high, then you need to go back and evaluate. Can you get cheaper materials somewhere else? If you haven't tried looking online, I would, you can get a lot of great deals if you know where to look. Or, maybe there's something you can change in your manufacturing process to make it faster. Next, you need to come up with your selling price. This is where it gets kind of guess and check. Personally, I like making my similar items all around the same price, because it makes it easy to remember, and that adds to your knowledge of your products. So pick a selling price that you think is reasonable. Ask yourself, "would I spend this much on this peice?" Ask other people too. Your friends and family. Look online for products similar to yours to see if you are even close. If you are satisfied with the price, and the profit that you will make off the piece, then on to the next step. If the price you think people will buy it for isn't going to make you a profit, go back and look at those costs again. Now, don't get too greedy with that profit. Smaller, less expensive items may only get you a few dollars in profit, but you are planning on selling a lot, so that's ok. The bigger, more expensive items, you can raise that profit margin a bit. (I won't go all into markups and profit margins and all that. If you understand it great, if not, this stage of your show is not the time to worry about it. Stick to the basics. )
Now comes the not fun part. Taxes. Yes, you are going to have to pay taxes on the items you sell, that's how the government works. (See the bit about a seller's permit in the Preparing for the Show section - here) Now, you could just put out a sign saying all purchases come with whatever percent tax. Or you can figure it into your prices. I like this better. Then at the show you don't have to deal with dimes and nickles and pennies. You can just make it a straight even price, which makes it easier to sell and makes it more simple for the customer. Here, tax is only 5.5%. I realize that some places it's very high, but that actually allows you to raise the price a little more if needed. Because you are then going to be a the right prices for your area. So here's what you do:
Selling Price - (Costs[materials and wage] + Taxes) = Profit
It sounds like a lot, i know. But once you get going it will be breeze. This is the way I do it, and it works well for me.
The next part is displays! I will be working on these next week, so there will be pictures, and even a couple of tutorials. [Coming Soon!]
So, first I suggest making an inventory list. Yes, that means giving everything a number and typing it all on a spreadsheet. It's really not that bad. Make it easy by organizing. If you have a few different categories of items keep them categorized. And start with big numbers. Like in the thousands, because then you have wiggle room. You have to make and inventory 1000 items before you run out of numbers. For example, I have different categories such as - vases, hair pieces, shoes, etc. So, the first vase on my list is 1000, then the second is 1001 and so on. Then, we go to a different category, like hair pieces. They start at 2000 and go on, then the next one is 3000 - you get the idea. Also, on spreadsheet, you can have as many different tabs in one document as you want! For me it makes it easy to navigate through my items if they are all together and I just have to click a little tab at the bottom to look at a different one. Rather than having like 7 different documents open trying to find the one that is vases. Now, make sure that you label each and every item that you have with a number, and type a description into your spreadsheet. If you have tags for your items, go with that. Otherwise, use little stickers. Like those little round colorful dots. Then, when you sell the item, you can either write down the number or take off the sticker and stick it in a notebook. That way, you can go back later, after the show, and figure out what you sold. I've seen people who just write out every item they have in a notebook, then try to find that particular item they are selling to cross it off. If you do have a customer ask about a specific item, look at your inventory sheet, find the number of the item, then look at your notebook, and if you don't see the number then you should still have it, That simple.
Now on to pricing. There are a lot of formulas out there for pricing items. I'm going to give you the one I use, and you can decide if it works for you. It's not super straight forward, because there's a part where you have to go backwards. Let me explain.
I start by calculating my costs. How much do the materials cost to make each item? Now this might take a little bit of thinking and guess and check. If you used something that only comes in bulk, such as fabric or yarn, it gets kind of hard. Let's use fabric as an example. Figure out approximately how many items you can get out of one yard. Then, take that number and divide it by the cost of one yard of material. That's your cost per item. Get the idea? Now, add up the little things, like buttons, glues, protective coats, even wear and tear on machines, needles, etc. Now, those are going to be very miniscule in most cases, and probably not worth the time, however, think about it. If you are going to be able to make thousands of pieces with that sewing machine, it's not going to be enough to be significant. But there are other types of things like that to consider, so take a second to think if there is anything. So, after you have all of that, you need to pay yourself. This is kind of a mixed topic. I have a business education, so I am absolutely for paying yourself. You are never going to have a legitimate business if you can't make a profit, and if this is something you want to use to make yourself self-sufficient, then you absolutely need to do this. Now, don't go crazy, start small. When you first start at a job you don't get to make a ton of money. But take that amount and figure out how long it takes to make one piece. If you have smaller pieces there shouldn't be a very high cost on this. I understand that you want every piece to be perfect so you want to take your time and what not, but it's not always for the best. If this is just a hobby that you want to make some side spending money with, go for it. If this is something you want to be more of a legitimate business, then make the pieces correctly, and make sure every single one is quality work, but you want to be able to make a lot of them, so you can sell them, right?
So your cost of materials plus your hourly wage x the hours you worked = your cost of one piece. Now if this seems really high, then you need to go back and evaluate. Can you get cheaper materials somewhere else? If you haven't tried looking online, I would, you can get a lot of great deals if you know where to look. Or, maybe there's something you can change in your manufacturing process to make it faster. Next, you need to come up with your selling price. This is where it gets kind of guess and check. Personally, I like making my similar items all around the same price, because it makes it easy to remember, and that adds to your knowledge of your products. So pick a selling price that you think is reasonable. Ask yourself, "would I spend this much on this peice?" Ask other people too. Your friends and family. Look online for products similar to yours to see if you are even close. If you are satisfied with the price, and the profit that you will make off the piece, then on to the next step. If the price you think people will buy it for isn't going to make you a profit, go back and look at those costs again. Now, don't get too greedy with that profit. Smaller, less expensive items may only get you a few dollars in profit, but you are planning on selling a lot, so that's ok. The bigger, more expensive items, you can raise that profit margin a bit. (I won't go all into markups and profit margins and all that. If you understand it great, if not, this stage of your show is not the time to worry about it. Stick to the basics. )
Now comes the not fun part. Taxes. Yes, you are going to have to pay taxes on the items you sell, that's how the government works. (See the bit about a seller's permit in the Preparing for the Show section - here) Now, you could just put out a sign saying all purchases come with whatever percent tax. Or you can figure it into your prices. I like this better. Then at the show you don't have to deal with dimes and nickles and pennies. You can just make it a straight even price, which makes it easier to sell and makes it more simple for the customer. Here, tax is only 5.5%. I realize that some places it's very high, but that actually allows you to raise the price a little more if needed. Because you are then going to be a the right prices for your area. So here's what you do:
Selling Price - (Costs[materials and wage] + Taxes) = Profit
It sounds like a lot, i know. But once you get going it will be breeze. This is the way I do it, and it works well for me.
The next part is displays! I will be working on these next week, so there will be pictures, and even a couple of tutorials. [Coming Soon!]
