Expert: - 1/18/2010

Question
Hi. I am just starting to promote some of the greeting cards I have designed. A retail store that I work at is going to let me sell them there but I'm pretty much clueless as to how price them (they are hand crafted designs but then copied). I also need to know the best way to copyright them. My boyfriend said I should also have a website before I try to sell them.  Finally, some of them feature quotes (from people like Ghandi, Benjamin Franklin, etc.) Is it legal to sell them with these quotes as long as I say who it is by? Thanks!

Answer
Dear Shelby,

It's great that you are designing your own cards and I am so glad you are getting started with your business.

The first thing you need to do is figure out your costs per unit. This would be your "cost of goods" worksheet. Use a spreadsheet like Excel or just start with a list of all the component parts that go into your card.

In your case it might be things such as card stock,copy costs, printing, ink, miscellaneous decorations etc. (I am not exactly sure what component parts you utilize) - and then be sure to add in cost of labor (even if you do them yourself!) and if you are doing all the work yourself determine your labor costs as though you would have to pay someone else to do the work. This means if you are currently paying yourself nothing, how much would you have to pay to hire someone else to do what you do? And then figure it out by unit. For example, if it takes you 20 minutes to make a card and you would have to pay someone $10 per hour, then your labor cost would be $10 divided by 3 which is $3.34.

Now add everything together and you have the amount that it costs you to manufacture. This is not what you will charge - this is a starting point so you know what you will be making per unit once you determine what you are going to charge the store (this will be your wholesale rate. I was not clear if you are selling wholesale to the store or if they were allowing to you sell your products without them charging a fee or purchasing directly from you. In the long run it is my opinion that it makes little difference because you want to be able to differentiate your wholesale rate from the retail (what the store customer pays) rate.

Pricing is subjective. The best way to start making that decision is to look at other similar kinds of cards either in stores or online to make a comparison. I have seen cards sell anywhere from around $2 to close to $10. It all depends on your designs, the artwork and other component parts that set your cards apart from the rest of your competition.

By looking at your competition you will be able to come up with a price that the market will bear. You will also need to compare your cost per until to the sales price making sure you are making a profit. Your margins in my opinion should be around 50%. What this means is that if an item costs you $1 to make - you sell to the stores for at least $2 (hopefully more) and they will in turn sell to their customers for a minimum of $4 or more.

For copyright information go to : http://uspto.gov and here are FAQ http://uspto.gov/smallbusiness/copyrights/faq.html

I am not an attorney however I do believe as long as it is a short quote and you give the author credit you are okay - just as you would if you quoted them in a book or other publication.

You do not necessarily have to have a website to start selling. In this instance it appears that you do have someone wanting your products before you have site - this is a good way to start and in the meantime you can start your site. When you do my suggestion would be to use a wordpress site and make certain that you have a good shopping cart for accepting orders even if you begin with PayPal.

I hope this has helped you. Please take a look at my website http://www.design2marketsuccess.com where I have many articles that will will help you in getting started with your business.

I wish you much success,

Jane Button
http://design2marketsuccess.com