Just before the Christmas panic starts, consider WHY handmade goods are expensive, and don’t quibble over the price, a thread 1/?
A person has had to use their time & money to get good enough to make a product fit for sale. This practice is essential & needs to be factored into a crafters hourly rate. Just as you expect to be paid for when you’re on training course, so do we! 2/?
The crafter has to research & comply with their legal obligations (eg risk assessments, sales of goods act, equality impact assessments etc) This use of time & resources needs to be factored into the hourly rate. 3/?
Insurance! Getting the right insurance is a real hassle. Some companies won’t cover more than X% sales to the US, while others who will won’t cover a high enough amount. Insurance is very pricey for a handmade sole trader 4/?
Material costs. While larger companies have the ability to buy in bulk, which is way cheaper, many handmade businesses don’t. Often what we need is more expensive as it’s not in high demand & therefore isn’t mass produced in China! 5/?
Marketing. Business cards, website costs, graphic design costs etc. Plus, the time to photograph a product, edit, compile a listing, then share on all social media & reply to all messages. 6/?
Fees. Listing an item on eBay or Etsy incurs fees. Listing fees or listing options, processing fees, PayPal fees, sale fees etc. This typically adds up to about 15% of the purchase price. 7/?
Postage & packing. Customers expect free postage & a nicely presented item. So, tissue papers, stickers, ribbon, bubble wrap, pretty envelopes etc. A small parcel costs about £3.40 to send in the UK, way more for abroad. Also, an invoice so paper, ink, a printer! Etc 8/?
Now we come to tools maintenance. Eg, sewing machines, knitting equipment, carpentry tools. These are NOT CHEAP, nor is finding one of the dwindling number of specialists to maintain them. Add in electrical costs to this too 9/?
Business costs of accountants, consultants & legal fees are (rightly) expensive but they are essential 10/?
Hourly rate. Minimum wage in the UK is £8.72. Now factor in all the above. Asking £10 an hour is not unreasonable. Ergo if I spend 2 hours on something it will be at least £20. Asking me to knock £5 off means you are ok to pay me less than minimum wage 11/?
Finally a basic example. Hand knitted socks, sold direct. Yarn: £7-£25. Time: 14 hours. Therefore the cost is £147-£165. This will only just cover cost. Think before you expect them to cost the same as the yarn! 12/12
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