Are your handmade prices TOO high? Pricing formula or calculator giving you crazy numbers? Here’s what to do

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Today’s video is inspired by the MANY emails I receive from makers every week, who are panicking because they’ve downloaded my free handmade pricing calculator, put their numbers in there, and the suggested retail price is HIGH.

Whether you’ve used my calculator or any other calculator or formula you might have found online, you might have found yourself in the same situation and thinking :

  • That’s WAY too high
  • No one will ever pay that price
  • It’s not competitive, many shops sell a similar product for much less

So the underlying thought here is “I won’t get any sales at that price point this isn’t a reasonable price”.

I totally understand those concerns, they’re very valid – you don’t want to price yourself out of the market, but at the same time – you also need to be making a profit right?

So let’s dive into it!

You can watch the video or read the written version below.

I’ve got 4 points to share with you that you should consider when you find yourself in this situation, with a price that you think is “too high” to see why that might be and how you can either reduce that price or make sure that people will buy at that price.

To start I’d just like to remind you that the one thing you’re not allowed to do when this happens, is to just put your prices down to what “feels” right to you.

That’s the best road to under-earning land and a sure way to not making this business work for you.

Instead, I want you to think through the 4 points I am about to share and really ask yourself: could this be what is happening here? There might be more than one thing at play too!

#1 – SOMETHING NO ONE IS TELLING YOU – THERE SIMPLY IS NOT JUST ONE FORMULA

Number one is that even though YES, there is one and only one way to price your product correctly, there are many different formulas that can get you there.

The absolute, always true, north star of calculating and setting prices is this:

Cover cost + Add profit markup = You’ve got yourself your price.

But as I was saying, there are many different variations of that simple formula that you can and SHOULD customize to your specific business.

Calculating your costs is universal and the same for any business, but deciding on your markup isn’t. For that reason, there is no such thing as ONE pricing formula that would work for every shop.

And not only that, but despite every shop or every business having different markup strategy sometimes different products or different collections within your own shop might require a different markup strategy.

In the case of my free pricing calculator, I’ve deliberately chosen to use the formula that I know to be the most conservative, meaning the one that will give you the highest profit margin. I did this because I much prefer giving you a number that’s on the higher side – than a number on the lower side, because you don’t need anyone to do that, makers and creative shop owners are usually pretty good at under-charging, no help needed on that front!

But to give you an idea, when I actually work with makers on this – inside the Tizzit HQ we have a Handmade Pricing course as part of the curriculum – I give them not just ONE but 4 different formulas and then not only explain the difference between each but also teach them how to customize it further to work for their niche, their products and their goals.

So the first thing here: what formula did you use? Do you understand that formula and the markup strategy used in it? Is it the best suited for your specific type of products, goals and niche?

OK, let’s move on to point number 2, which is… taking a serious look at your costs.

Grab this free handmade pricing calculator!

use this “done for you” handmade pricing calculator to know exactly how much you should charge for your products.

#2 – Let’s take a look at YOUR COSTS


Reducing your costs has an important effect on the final price of your products, if the costs of creating your products are too high, it’s going to be hard to charge less without really compromising your profit margin. That’s just math.

There are 3 things to look at when considering if you can reduce your costs:

  1. Can you reduce your cost of goods sold, your supplies costs?

    • Where are you buying them? If you are buying them at the local craft store, you’re buying supplies that already have been marked up for retail and then you’re marking that up again as part of your own pricing calculation. Whenever possible, buy in bulk and at wholesale prices.

    • Are some of your supplies too high quality? This is a sore point because I know the majority of you have “quality” as one of your main values when you’re creating products, and I am certainly not saying you should compromise on quality, BUT unless you’re going for a luxury brand positioning, sometimes good enough is just that… good enough. If you are using paracord, you know that rope rock-climbers use to make a baby swing, you definitely want that rope to be really strong, but if you’re using paracord to make a keychain – you don’t need to be buying paracord that can hold up to like 300kgs, because no one has keys that are that heavy. And that’s not just for safety reasons with the baby swing by the way but because the cost of that more expensive rope can be reflected on the final price without any issue. The end customer (parents) understand the value of it. It’s justified. If a supply or material you’re using is “valuable” but not in the eyes of your customers – you’re paying too much for OR you need to communicate that value more efficiently to justify the higher price.
  2. Still in the realm of “looking at how to reduce costs” – you want to take a look at your overhead next: what’s included in there? Is there anything you can do to make your overhead expenses more cost-effective?

  3. And finally, time! The one thing you are NOT allowed to do here (unless of course you set this to a crazy high amount which I doubt you did) is to think straight away that you can just lower your hourly rate. Instead, do an honest review of your actual creation process and ask yourself: how long does it take me to make this product? Which part of the process is taking me the longest? Can I organize it differently so it isn’t that time-consuming? If you are using a technique that you learned only recently – can you improve those skills to become a little faster at it? Are you going above and beyond and maybe because you know your craft so well, almost spending too much time on some technical details that the end-customer will not understand/that will not increase the perceived value of your products? Speaking of… this is a great segue to point #3, which is your product’s perceived value.

#3 – YOUR PRODUCTS PERCEIVED VALUE

There are also many cases where the value of your products IS the level of care and attention to details you put into it, the craftsmanship and the process itself, the quality of your materials – and sometimes you just can’t cut corners on those. That’s not what your brand and the positioning you’re going for are about.

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In that case your costs might be high but for good reasons as in they might be high, but at the same time, as low as you can get them. So instead of decreasing your costs, you need to increase the perceived value of your products.

Offering true value, true quality is by no means a guarantee of success. A great product will not sell itself, you have to communicate that value with your customers for this value to be perceived by them.

Branding, images, copy and messaging, packaging, social proof, storytelling… there are many levers you can pull here but lowering costs isn’t always the answer. Increasing perceived value can be, because then you’re able to sell your products at that higher price to customers who are delighted to pay that price.

Quick side note: Sometimes you can both decrease your costs AND increase your perceived value, which would mean more profit. It’s not just one or the other – so think about it and see what adjustments you can make ON ALL FRONTS.

OK now last but not least…

#4 – PRICE ISN’T ACTUALLY TOO HIGH

Number 4 is that… that price you’re seeing in your pricing calculator or that figure you got after calculating your cost and adding markup…. Maybe it’s NOT too high at all.

This is really not a business issue anymore but a business owner issue, and by that I mean, a mindset issue.

The vast majority of creative shop owners, makers, and artists I work with will 100% of the time convince themselves that their products are “not worth that much” based on nothing else than their own bias and limiting beliefs. Sprinkle a little bit of imposter syndrome on top and you’ve got yourself a shop that’s not turning a big enough profit.

And look, I am having a laugh, but we ALL do this. It’s very normal, but part of your job as a handmade business owner is to manage those self-sabotaging thoughts. It is something you can work on. I actually have an article on this, called “handmade pricing fears” I strongly recommend you read next.

My absolute best recommendation though if you need help with your Handmade Pricing Strategy, is to check out the full Handmade Pricing course.

Take care and until next time, aurevoir!

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