Deciding how much you will 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 assess 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, no magic product pricing calculator 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 will cover the different fields that will affect your prices so you can make a better decision.
Any business intends to make a profit.
Accurate records of your product costs will help you price your products for profit, not 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.
As 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 determine 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
Next is calculating 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 plan to sell 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.
As I have said before, the costs of creating the original and the hourly rate has already been incorporated into 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 good to see how much other artists sell their prints for and the average market price.
You will lose sales if you price your prints 2 x higher than all other artists.
If you price your prints too low, you could lose money.
It is good to keep your prices equal to 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 consider that.
If the market drops and people are not purchasing art prints at your asking price, you might consider reducing the costs per print or putting the prints on sale until the market returns.
How to calculate the selling price of a product is a challenge.
But the tips above will help you create a pricing strategy to produce a profit, not a loss.