AboutShasta McLaughlin Expertise I can answer many questions about the art and craft show industry. I can help with booth setup, advertising and marketing, increasing sales at shows, where to find shows, how to promote an art or craft show, and much more.
Experience I have always been an artist/craft person since I was a child selling crafts at shows with my mom. I have also promoted several craft shows, and publish a newsletter for artists and crafters.
Publications EzineArticles.com
Education/Credentials Salutatorian of my graduating class. Associates degree of Graphic Design.
Question Hello. I'm not into running an actual business but just curious about the basic cost. Let's say I want to sell a simple item like a bookmark or a beaded toy. How does one incoroprate cost into an item without making it too expensive or too cheap. Who would want to pay 10.00 for a beaded item? or 5.00 for a bookmark? Any ideas how once calculates it?
Answer Actually yes I have a little bit of an idea what goes into determining cost. It includes a lot of science, quite a bit of art, and some guess work.
For instance you buy $2 in beads, $3 in clasps, and $2 in string to make beaded bookmarks. Then you spend 2 hours making beaded bookmarks and end up with 3 finished pieces.
So you have $7 in supplies and you spent 2 hours of your time.
How much money do you want to make per hour? For easy math I'm going to say that I want to make $5 per hour.
Now you have $7 in supplies and $10 for 2 hours of work. For a total of $17. Divide that by 3 and I have to charge $5.66 for each beaded bookmark just to cover my expenses and time.
I need to consider that if I sell the bookmark for that price that I will only be able to replace just that 1 bookmark. This isn't very efficient if I'm planning this to be a business for myself. I multiply my expenses times any number between 1.5 to 3. The higher you go the less likely your customer will want to pay the price. You also need to decide do you want to be the low price leader, the median or average price, or the high priced product on the market.
Once again just for easy math I multiply $7 in supplies times 2. I get $14 in supplies and $10 for my time. For a total of $24 divided by 3 equals $8 each bookmark.
Say for easy math you have $5000 in other expenses (tools, craft shows, studio rental, electricity, advertising/marketing, etc., etc.) a year and you make 5000 items a year. You would add $1 per product to the price to cover expenses.
You then go into the market and compare your items quality and price to similar items on the market. The more closely your item resembles those on the market the more accurate your research will be.
You can probably charge between $6.66 and $9 for your item if people are buying items similar to yours for a price of $6.66-$9. Somewhere in between the two prices will be the optimum price where the most people buy that item at that price. If people in the market are buying items similar to yours for $9 to $20 you are probably not charging a high enough price (depending on quality of workmanship and materials etc.).
So your price is determined by total costs to make and sell the item, the artists wages, and the price the customer is willing to pay for the item. Ultimately one factor wins-the price the customer is willing to pay. Charge too high a price and the customer won't buy. Charge too low a price and you imply that your product isn't very high quality and once again the customer doesn't buy.
So there you have it in a nutshell. Finding out exactly who pays what price for an item is a whole other ball of wax.
For more information on marketing and price etc. visit my blog at www.extravaganzacrafts.com/Blogs.
Shasta McLaughlin
The Extravaganza Craft Productions
