Pricing Quandaries

Pricing -- That’s a hard one to decide, even after all these years.  What to charge that will be willingly paid by a customer.  What will make someone stop and pull money out at an event and buy from you?  What’s fair to charge? Do you decide to go with a higher price and try to make what you feel the item deserves, or do you go with volume and keep the price low?
 

Yes, there’s still the old reliable way of figuring out what you paid for the materials and triple that cost, hoping it covers your time. Is your time worth minimum wage, or $10 an hour, or $15?   Or more?  Just because you’ve developed expertise does that mean people should be paying you $25 an hour even though the materials in the item may come to a whopping $3.40?  Or do you put three hours into a soft sculpture and only sell it for twice the cost of the materials because it’s a niche market and you know you CAN’T get more than that from someone willing to buy it? 
 

There’s no easy way to figure things out.  If I did ‘art’ the assumptions by a buyer would let me put a price tag on the item that follows that thought pattern since art is about skill and the final look of the piece, it’s got an intangible factor going for it. However with crafts -- that’s an entire different paradigm.  And crafts aimed at PETS falls into a whole ‘nother category itself. 
 

People get their cat toys in one of three different ways. 
 

1. They buy them from a pet toy supplier.  The items are made in bulk usually in China, may not even contain catnip though it may say so on the label (one I took apart only contained a bit of sawdust, definitely not catnip) and if they come from overseas they’re not allowed into this country unless they’ve been chemically treated with a pesticide to avoid bringing in something foreign in regards to insects.  Does this stuff seep into the cat toy itself?  Probably. Not everything is packaged in plastic. 

2. They buy them from someone who makes them in the USA. Whether it’s a manufacturer who does them in bulk at a factory that then warehouses their product and ships through a distributor, or from an individual who has a cottage industry making them at home in smaller quantities.

 

 

3. They make their own cat toys. 
 

So pricing, when you’re in category #2b, is competing with the low cost (or even ‘free’) of category #3, and the ‘big boys’ in category #1 and 2a.  You’ve got to be competitive.  Bulk suppliers still make a profit, so those $3-$7 toys in the pet supplies section of the store may be wholesaled at .50 cents to $1.75.  Middlemen and the retail outlet get the rest of the selling price. 
 

Retail typically doubles the price so if a store has to pay $3 for an item they’re going to turn around and sell it for $6.  If a crafter is selling outright to a retail establishment, they have to estimate what the final sales price will be that the store can move the item at, and cut that in half when they’re dealing with a store.  If a crafter is selling the item on their website or an internet sales site such as eBay or Etsy, they’re looking at a ‘retail’ price and can set their prices accordingly.  However if they’re doing their own local craft events, the selling price typically is lowered because what MAY sell for $6 each online now is competing with a sometimes ‘rummage sale’ mentality at local events and won’t move at the $6 price at all. 
 

Which means cutting back on the price to be able to get customers to pull out their wallet/purse.  It may take a while to find the right price point. The type of event you’re at also affects your prices. Church bazaars need lower prices than outdoor arts and crafts fairs for instance.  And if you’re in the Midwest, that wallet is VERY hard to get open, compared to East/West coast.  It’s a balance game.  Sometimes you have to slide back down to wholesale pricing to get those customers interested.