Craftally
Helping makers to calculate their cost, wholesale and retail pricing.

The Craftally app

The application runs on Apples IOS devices like the iPhone and iPad and is available to download from the App Store.

The craftally app was designed to make calculating your pricing as easy as possible. So the form has a list of simple field or sliders for adding you information. You do not need to add them all just the ones you think are important to you.

• Material costs - this is a known amount as it will be the price you paid for the materials you are using to create a batch of good for sale.
• Volume made - out of the materials you have purchased how many completed ready to sell items can you make.
• Product and brand quality - this is a subjective comparison that you need to make between your items and branding of those items compared to your competition, Try to be realistic.
• Time spent in hours - how long did you spend making. This is not everything else just your making time. Chances are you cannot charge for every minute spent staring out a window, making yourself tea or watching TV etc..
• Hourly rate - what do you think a person making the type of items you are making, should be earning per hour.
• Makers experience - the amount you can actually pay yourself is based on your experience. So if you have put an hourly rate of fifteen but said that you are inexperienced then the calculator will take that into account and perhaps only allow for 6 per hour for making time.
• Competitors retail pricing - you need to be looking at the market and what your competitors are charging. You should not be lowering your prices to try and under cut. This is bad for everyone. Instead you should be comparing and if appropriate adjusting your pricing. Find what is the cheapest competitor with a similar quality product and the most expensive.
• Your retail price - this could be what you are currently selling the items for or how much you think would be a reasonable price.
• Retail selling fees - these could be your credit card fees at an event or if you are selling online line the stores fees. These impact your profit , so it is good to take account of them.
• Sales or Value Added Tax - If you need to be adding tax on to your sales price, it is nice to not have so work out the number with a calculator.

Pricing craft items

Pricing is one of the key elements to running a successful craft business. So below we have listed out some of the things you should consider when working out your prices.

The pricing bubble

A pricing formula cannot ignore factors that are outside of your control. The pricing of your competitors, the wider market conditions and fluctuations in demand.

Competition

If you create an item, lets say it is a scarf. Your competition is not just every other scarf but any item that does the same job as a scarf. A hat, a hood, a collar etc.. If the scarf is not for keeping warm but for a fashion item then you are also competing with lots of other accessories.

You are not only competing against other handmade items, you also have to look at the mass produced items. You need to think about where you are selling, it is sometimes cheaper to sell online but your competition is very easy to find. If you are selling at an event you may be the only scarf seller but your potential number of buyers will be less.

Do not base your pricing on being cheaper than your competition, make it a fair price looking at the quality of your product compared to theirs.

Market conditions

The condition of the market can play an important part in your potential to sell at a specific price. For example you may be exhibiting in a wealthy area and that may counter a struggling economy. If there is not much money around you may need to discount your product on the day of an event to attract more sales, but if you discount too much it will eat up your profit and you could end up trading at a loss.

Fluctuation in demand

You may have been happily making your items for years and doing well, then other people notice that it is a popular item perhaps with a relatively low cost of production. Suddenly the market is flooded with similar items and you are competing with lots of other. You will most likely have something that makes you stand out from the crowd. Play on that, perhaps increasing your prices as a much better product.

Pricing calculations

You need to be able to work out your cost price per item. This will give you an idea of a wholesale and retail price. However, you may at the beginning have a rather high cost price because you are buying materials at retail prices. This is not a bad idea to start with as it can save you money. If you are testing the market and buy the material for 20 items and your idea fails, then you have not lost a fortune. If you by wholesale materials but have to buy enough to make 1,000 items, then you are exposed to a much higher risk and may have a cash flow issue.