Supplies + Your Time = Item Cost
Item Cost x Markup (between 2.0 – 2.5 or more) = Wholesale Price
Wholesale Price x Markup = Retail Price
DO NOT SELL YOUR SELF SHORT!!! You are amazing. You are talented. You are straight up just awesome! As an owner of a handcrafted business you 1 are talented and 2 have taken a huge launch into entrepreneurship! Do not sell your self short! This is the biggest fail I see amongst new hand-made businesses! You want to compete with Wal-Mart Prices…. Let me break something down for you.
- Wal-Mart employs 1.6 million people. To give you an idea of just how many people who is, Idaho, the 39th most populous state, is home to 1.4 million people.
- Wal-Mart had sales of $312.43 billion in its most recent fiscal year, which ended January 31, 2006. By comparison, the second-largest retailer in the country, Home Depot, posted sales of $81.5 billion.
- Wal-Mart has 6,200 retail outlets. In contrast, Home Depot has 2,040.
I’m guessing you are 1 maybe a team of 2 people? You do not own a store front but work from a craft room, or labor of love area of your home, and you do not own 6200 retail stores? Am I righhhht?????
You have to not only charge for what you pay for product, but for your time….How much do you want to earn per hour? The beauty of owning your own business is deciding your salary. When I first started my Etsy I was comparing my Coffee Mugs to Target prices…Around $9.50 per mug…. I was constantly frustrated with why I was making no money and breaking even! WELL DUH>>> IM NOT TARGET! I was working my ass off on making the perfect gift for people and getting burnt out! I than raised my prices 3 years later last christmas to $16.50 a mug because I followed the formula listed above….Guess what happened? I thought for sure, I would get slow for Christmas and my sales Quadrupled…How this happened? I have no idea. I just know I believed in my product and what I was doing and knew I was worth more!!!! My family was worth more! Shipping will be an entire different blog and I wanted to keep tonight short and sweet, but think long and hard about what things cost you to make a product, how much time is contributed to that product, and than times that by 2. That should be your total price per item on Etsy.
WEEK FOUR CHALLENGE: LIST 10 NEW ITEMS AND CREATE APPROPRIATE PRICING WITH NO FEAR OF REJECTION. BELIEVE IN YOURSELF, BELIEVE IN YOUR PRODUCT, KNOW THAT YOU ARE AMAZING FOR STARTING YOUR DREAM.