What am I selling? Article #2 on Pricing my Crochet for sale

This is the second in a series, you can read the first article here

I have been researching all week for this article, I have read countless blog posts from others, I have a list with 19 different links that I could include on the 3Xcost method of Pricing your Crochet Items for sale.

It is 4:32 on Friday afternoon, and I am just now in a place where I can write something I think MAY make sense.

In a group discussion just a bit ago, I saw again the normal post, The customer/friend/cousin wants this, and I quoted XX. Is that too much?
I see this so often, I know how it will play out, and yet I always get sucked into these discussions.

This time it was this pair of adult Ugh Style Boots    

the price quoted was $22.00.


I have to say, I wanted to crawl through the wires of the internet, and blast out in her face with some sort of ARE YOU OFF YOUR ROCKER?  Rant and Tirade  Picture the Looney Tunes Cartoons with the phone, where the animal explodes out of the receiver, all puffed up like a balloon until they have concluded their rant, and are then deflated, hanging out the earpiece of the old fashioned phone.  Before I could focus, there it was, in all it's helpfulness, "I use 3 times the price of my yarn to set my price"  Again, I felt it, I was swelling like a balloon, I was urging my fingers to type, but alas, it was futile, the original poster chimed in with, "I have enough left over from another project, so there is no cost". I dropped my head, and walked away from my computer. it is a lost cause, this person is not going to get it.  DO YOU?

I went back and offered the link for the gadget that I shared last week. I suggested that she make one, and double the time. Then weigh the boot that was created, and figure out just how much yarn goes into it, and of course double it.  Then, determine what the yarn would cost, if she had to walk into a store and buy it today, with no sale price or coupon involved.
I was stunned to see how many were being gentle with their nudge that she should actually be asking more. here is a copy of my last statement on that thread.

 I think it is also important to note, hand made is not the same as what you get going to a box store and buying clearance priced merchandise. A person who does not have the skill is asking someone with the SKILL to make it for them. The SKILL is what you are selling, your time, and your Skill. You can buy cheap boots anywhere.

This actually says it very well.  

If you need a plumber, you are not likely to get him to work for you at a price lower than industry standard, and frankly, it is a whole lot more than minimum wage. An attorney is gong to charge you his normal rate, As will the beautician who cuts your hair. Why is it we as artisans are reluctant to recognize the value of our time, and SKILL?

So, Now, let's look at the 3 X Cost method for pricing. Just for the sake of continuity, lets use the same project, so I do not loose you in this.

The Pattern itself is $5.00
A skein of Red Heart Super Saver 14 oz is about $8.00
A skein of Red Heart Classic is about $4.00,

the item has at least 2 colors, not sure if the sole is doubled, so we will use these figures to calculate.

Based on the cost involved, assuming she has to start with a hook and a request, she will be paid $5.00 for her time if she does actually charge $22.00 for this order.  I will not even go into how ludicrous that is.

Factoring the cost at $17.00, and using the 3X method, the price of this order is $51.00.
Better right?
But is it fair to the seller and the customer?   Maybe.
$34.00 for your time is not too bad, if you look at a projected 4 hours to make the pair, that is $8.50 an hour.  What if you actually need 6 hours, because of something unforeseen in the pattern, as in doubled yarn, and doubled soles. Or a new stitch that you are unfamiliar with, then the hourly rate for the pair would be $5.60 an hour. Still a good deal? An entire day, focused on this project, is it worth it, or will you have resentment, and be saying I need to charge more if I make these again?

There are some that think this is a great way to do it, because it sets a standard price, industry wide. If you are a seasoned crocheter, The pattern would get completed faster than some one who is just starting out. So, the rate per hour would be higher for some and as proficiency expanded it would continue to grow. Beware. It does not always work out so well. (if you think of this as a well priced item)  Now lets look at a small, free pattern, but also a pair.  My Zen Baby Legs, in a child size.
Yarn required
Less than 1 skein of # 2 yarn, Just say $2.00
Patten Free.
Time to complete, about 2 hours
So, the price would be $6.00. The customer is delighted.
So, the hourly break down would be $2.00 an hour.  Are you looking for a way to inflate that? Are the hairs on the back of your neck standing on edge saying you are worth more than that? Mine Are.
 Let's do one more, this time, two different Hat patterns. The first is this Slouchy Faux Cable Hat
the second is this Kiwi Slouch Hat  With both of these being Slouch hats, the price should be easy to calculate, right?  They take a similar amout of yarn. Let's just say one skein of Caron Simply Soft for each Hat.
Both patterns are free, and I do not know either designer here, just random hats from Ravelry.
One skein of yarn is sufficient to crochet either hat.
Carron Simply Soft Aprox $ 3.25
Using the 3X method, the hats would sell to the customer for $9.75  Holy Wow, Really?  You would be satisfied with that?
For the faux Cabled Hat, I spent 30 minutes reading the pattern, and it took nearly 4 hours to make. It is complex and involved. Certainly worth more than $1.44 an hour. I would think 10 times that.
The Kiwi Slouch was a much quicker read, and took just over an hour and one half for me to complete. So, the break down for this hat would be 3.25 an hour.  really? for a beginner pattern I would make more money,  Well, yes, because it does not take as much of my time, or skill, so a higher reward.   THAT IS JUST WRONG.

So back to the title of this posting, What am I selling?  Am I selling products? or am I selling my time and skill to provide a service to the customer that wants a quality, hand made item?  Price your goods accordingly.

Until next time

Becky

Pricing My Items for sale

This is the first in a series of articles. I appreciate you, and hope that you will follow along as I try to add something to the subject, from a direction that makes me comfortable.

If I have seen anything repeated in multiple threads on Facebook, or any of the social media groups for that matter, it is, "What should I charge for this?", usually followed by a picture. Sometimes they are great pictures, sometimes not so great.  Photography will be a topic for a future series.

There is a HUGE push for three times the cost of materials.  We can go into more detail on this method Next Saturday, February 8th, because this really needs to be thought through. There are others who have expounded on this concept. I will pull together an article that will cover it in depth.

There is a BIG lean toward a cost + time compilation.  (We can discuss this after we talk about the Three times method.) So many factors to examine.

There is a small group who feel  "It needs to be reasonably priced, so I can sell more, and therefore make more money in the long run."  There is a place for this thinking, and we can delve it into it in the Spring.

From my Perch on the Porch, I find that none of them work for me.  It is not so cut and dry as any of these.  There are elements that factor in that are not so easily defined.

I did find this tool a while back, that helped me establish a starting place.  Check out this gadget  from CraftsCalculator.com!
It is easy enough to use, and has just recently been upgraded to allow a few more options.  It is fun to play with, and gives the opportunity to adjust factors, while keeping it depersonalized.

I would suggest playing with it a bit. You have a product that gets regular orders, let's say a hat. You have sold this hat for 2 years at $20.00. You are happy with that price, you feel compensated for time and materials. This is a great place to do a comparison.  Enter the cost of materials, and the time required to create the hat, then slide the profit button around, or try the different skill competence levels. Where does it put your $20.00 price?  Do you still feel good about your price?WONDERFUL!
Now use the same levels to see what the price would be for that item you just do not know where to start.  Does this tool provide you with a number that makes sense? Do you feel in your gut it should be more or less?  Why? Now you are thinking. Some effort is going into it, but not from a thin air place. You have a suggested dollar amount from which to start.

I have struggled with a confidence issue for quite some time. My work is good, the items I create are often my own designs. I am proud of what I do. I still struggle with placing a value on my work.  I have had people look, and be extra excited about an item, then shut down immediately when they hear a price. I have also had people reach into their pocket and hand that same amount to me immediately.  I have had those that agree to the price, but I never hear from them again.  It is real, it happens, it is not you, it is them.  The people you want to connect with are the ones who are reaching into their pocket right away.  That is your target market. We will look at the details of who they are soon.


Article two has been published, you can read it here