Deciding how much you are going to charge for your artwork and handmade crafts will affect how well you perform with your competitors and how much profit you will be making per sale. In this post, you will discover how to calculate the selling price of a product for more sales and higher profits.
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By the end of this post, you will know…
- How to asses your products costs
- How to add other costs associated with making the products
- How to decide on a profit margin
- The importance of reviewing your prices
Asses Your Product Costs
Unfortunately, there is no magic product pricing calculator that will provide you with the best prices for your artwork and handmade crafts.
Many variables will affect your pricing strategy and in this post, I am going to cover the different fields that will affect your prices so you can make a better decision.
The intention of any business is to make a profit.
Having accurate records of your product costs will help you to price your products for a profit, not a loss.
There is no way you will be able to know how much profit you are making if you do not see the cost of doing business.
Below is an example of how much it costs me for my pastel paintings:
- Faber-Castel Pitt Pastel Pencil Set – $81.26
- PanPastel Painting Pastels Set – $92.24
- Rembrandt Soft Pastel Set – $159.21
- Clairefontaine Pastelmat Card Pad Assorted Selection 12 Sheets – $40.70
These are the bulk prices of my art supplies for pastel paintings.
I calculate the price for each painting by dividing $40.40 by 12 (Pastelmat) and taking 5% of the total costs of the pastels.
A sheet of Pastemat = $3.39
5% of the pastels = $16.63 (I have figured out that 5% is an accurate amount for the pastels)
The total cost of the art supplies per pastel painting equals $20.02.
This number does not include my time or costs associated with the studio like electricity, water, heat, etc.
Product cost is the total value you spend to create and sell your product.
The cost of the supplies is just the start.
Like I have mentioned, you will also want to calculate the costs of the area you are working in plus the costs associated with selling your artwork and handmade crafts.
If you are selling prints of your original artwork through a print-on-demand site like Printful, you will want to know how much the costs are for the service to print and ship your prints to the customers.
If you print your prints at home, you will have to calculate the costs of the printing material.
I do not calculate the supplies to create the original art or the time invested in creating the original art when I am determining the prices for my prints. Those costs are already included in my original artwork prices.
Add Other Costs
Now that you know how much it costs to create your original artwork and the cost of prints, you will want to calculate your hourly expenses and costs associated with selling your product.
To calculate your hourly expenses, multiply your hourly rate by how many hours it takes to complete a project.
Example: $30 hourly rate x 10 hours to complete a project = $300.00
The next step is to calculate selling expenses like internet costs, fliers, brochures, craft show fees, etc.
Calculate all expenses associated with marketing and selling your products.
Now it is time to add everything together.
Cost of products + hourly rate + selling costs = selling price
$20.02 + $300.00 + $30.00 = $350.02
I round this number to $350.00 for my original pastel paintings.
My profit for an original pastel painting is $300.00.
Selling price – costs = profit
$350.00 – $50.00 = $300.00
Add A Profit Margin
Selling prints of your original artwork is a great way to increase your revenue.
There are different strategies to think about if you are planning on selling prints of your artwork.
- Limited edition prints
- Unlimited prints
- Prints on merchandise
- Licensing your artwork
- Use a print-on-demand site
- Print products at home
Pricing prints is different than pricing your original artwork and handmade crafts.
Like I have said before, the costs of creating the original and the hourly rate has already been incorporated in my original prices.
When deciding on a selling price for prints, you will want to add the costs of the prints, packaging costs, shipping costs, website costs, and taxes.
The next step is to determine a profit margin.
It is a good idea to see how much other artists are selling their prints for, and what the average market price is.
If you price your prints 2 x higher than all of the other artists, you will lose sales.
If you price your prints too low you could be losing money.
It is a good idea to keep your prices equal with the market average.
Experiment with your profit margin to see what works best for your audience.
Review Your Prices Quarterly
The last step is to look at the costs of doing business and the market quarterly.
Prices of products will continue to increase over time and you will want to adjust your prices accordingly or your profit margin will decrease.
The market fluctuates and you will want to keep that into consideration.
If the market drops and people are not purchasing prints of art at your asking price, you might want to consider reducing the costs per print or put the prints on sale until the market goes back up.
How to calculate the selling price of a product is a challenge.
But using the tips above will help you to create a pricing strategy that will produce a profit, not a loss.
Popular Art Marketing And Sales Tutorials
Below are some of the most famous art marketing courses that will grow your online art business:
Most Popular – How to Make a Living Selling What You Make by Megan Auman
Most Popular – Build a Successful Creative Blog by April Bowles-Olin
How to Build a Business While Learning Your Craft by Megan Auman
Pinterest Marketing for Makers & Designers by Megan Auman
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