Anybody trying to start a business faces this very important, and scary, question. What do I charge? Apart from the practical concerns of what is someone willing to pay and how much do I need to make an hour if I’m my own boss and I’m not getting paid benefits or earning vacation time, this question also conjures up all those feelings of low self-worth. For many of us, working for someone else all our lives means we’ve been told what we are worth and to only speak when spoken to. The urge to start our own business comes from knowing that we are more than the box our jobs have put us in.
So here I am at the same point. What do I need to charge for my products, taking into consideration an hourly rate, being able to eventually pay for my own health insurance if this business takes off to the point where I can do this full-time. You never want to start out charging less and then have to raise your prices later when you make the jump to do this for a living. There is also the other consideration of underpricing what you do and, in turn, underpricing what other people in the handmade community do. If you’re thinking to yourself, “I just crochet when I’m watching TV every night and I’d be doing it even if I wasn’t selling it, so I just want to make enough to pay for more yarn”, then you’re not considering that someone in the booth next to you needs to charge enough to do it for a living.
But all that aside, what is someone really willing to pay for a jar of homemade jam? For a hand-crocheted washcloth? If they were to go to Walmart, they could get that dirt-cheap. So how can I expect to charge $7-10 for it?? What we all need to keep in mind is that people going to craft fairs and farmers markets are already in a different mind-frame than your Walmart shopper. People want to buy handmade products because they want to support the idea of you making good quality items. They have the same dream of living in a world without GMO vegetables and blankets made by little kids in a third-world sweatshop. And these people are willing to spend a few dollars more to help make that dream a reality. It’s really an amazing thing! People want to hear your story and buy into the idea of you living your passion!
There are a lot of resources out there for how to price your work. I think these articles, Pricing Happiness Part 1 and Part 2, featured on Oh My! Handmade Goodness, are an excellent start for looking at this topic.