Saturday, 29 October 2011

Fair pay for a Fair day's work?

Costing one's work is a difficult thing to do....trying to balance what people will pay while trying to make some sort of profit is really a hard call.  I've read, heard and listened as other sellers battle with the same problems.  I've put my point across on Etsy's blog when people have openly criticised others for the price they charge for handcraft pieces of work.  So I thought I'd break it down for you to the best I can....I'm probably going to learn something myself here!!  Please also consider when reading this, it is my breakdown of costing....please don't judge any other work by what I do or what I charge....this is entirely my own experience and what I have to do to make it viable...if it is at all.....and remember I do this because I want to and I can.  I'm never going to make millions but that's not what it is about for me.

I'm going to use one of my Cashmerino Earflap Hats as an example....This is the completed article and take into consideration these hats come in 4 sizes. Reality is there is really not a huge amount of difference between the knitting of a newborn hat and a 36month old hat....maybe a wee little bit more time and some extra yarn, but they both still need to be knitted, sewn up, buttons purchased, buttons sewn on, straps made and put on, cotton logo sewn on which involves a sewing machine...both hats are put in the same size tuff envelope and both driven to the post office for I do see why some sellers charge the same price for their hats no matter what size.....I charge different prices for different sizes, if it's bigger you pay more....that's my pricing structure.

The only items I buy wholesale for my business are yarn but that is only some brands which include Debbie for these little hats the yarn is priced I'm basing my costings on a 4M to 10M baby hat.

Yarn alone....even though there are 3 colours of yarn in these hats I add the total quantity of yarn together. So just under one ball.

Wholesale price for yarn used. $6.50, this includes the GST and the postage I am charged for delivery of said yarn, I have to pass that cost on.  This cost then goes back into buying more yarn, so I basically I never see that money at all it continually goes back into the buying kitty.

Buttons x 3 @ 90c each.  I purchase these retail so total $2.70.  I know you can get cheaper buttons, but cheaper buttons look exactly like, and as these buttons are a feature they have to look good.

Now you might just be thinking well that's $9.20 and she sells these hats for $29.50 so she's made a $20.30 profit....well here is where the other bits and pieces come out.

Firstly as it's income it has to be declared to the tax dept, so I need to take out around $2 per hat to put aside to pay for any extra tax at the end of the financial year, it's probably a little too much but I like to be we're down to $18.30.  I then take out another $1.00 per hat to cover heating and lighting whilst working at home... these utilities aren't really tax deductible because the tax department see you as being home so therefore you'd have the lights on we're down to $17.30, cellophane bag to pack the hat in 10c, postcard, $1, sew in label in hat 20c, and swing tag 5c that's another $1.35 .... we're now down to $15.95.

To be fair some of these items do get included as tax deductions but take into consideration I have had to outlay the money for these prior, and sometimes big bucks that I never really see any return on but I think they are a necessary part of the business....advertising and marketing in a way....and presentation is paramount in my book.  So we're at $15.95 now....I'm not going to include postage as I do charge for that, so that really is the end of my costings.

Well $15.95 profit, that's ok you say....yep not bad, but it leaves me no room at all for wholesale, which is why I don't offer it at all now....if I did offer wholesale this hat would have to be marked up by another $15 or so dollars, making it then retail for around $44.50....out of most peoples price range I believe.


Anyway let's take my $15.95 and then consider the fees I have had to pay to list the item and I also pay the paypal fee, so take out on average another $1.50 then I'm left with $14.45.

Lastly divide it up now into hours worked....knitting, sewing and finishing off this hat comes in at 4.25 hrs and photographing, listing and packing up the hat comes in at around 0.75 so totaling around 5 hours of work for this hat alone so there you have it people I really am working for $2.89 per hour!!!  So now you understand my total frustration at people who constantly criticise crafters and state that they could make whatever the item for next to nothing and then also unfairly compare a hand made item to a mass produced item made in Asia and India and the like and say we charge too much.  My blood boils!

Look I know this seems quite extreme and my little business is just me, so yes, the $14.45 goes into my pocket but by god I work damn hard for it and it is a lot of work for little return....but I love doing it, I love seeing my hats on little heads and it keeps me occupied...I spend a lot of time at home, so I thank goodness I can do something in front of the telly!

I will also add that some hats, I do make a bit more money from and some I don't, so swings and roundabouts.....blankets are a hell of a lot of work and a lot of hours again for not a huge return, but it's the creativeness I crave more than anything else.

So there you go people just thought you might want to keep this in mind the next time you consider a handmade product.  There is a lot of love and (underpaid) time put into it...but it is worth the price.

Post script added 24th July 2012.

I still see a lot of people pop over and read this post....since writing this post I have changed my pricing structure greatly.   There has been price rises in wholesale price of yarn, and I've had to value myself a bit more and make sure I pay myself properly.

After much thought I decided that my prices needed to be the same for all hat sizes....the work really is the same so therefore I averaged all the prices of all the sizes in the style and came up with an average....and you know what I feel better about it, and in actual fact it hasn't decreased my business at all and customers tell me it's easier for them as in saying, make sure you still work out a pricing structure for yourself, value you as the maker and make sure you pay yourself something....your work is worth something to everyone. x

Until next time...Craft on!!

Vicki xx


  1. Bravo on a fabulous post Vicki. I have struggled with what to charge for my product and hadn't even taken some of this into account. I am currently debating whether to start using an ecoorganic cotton that is plant dyed for my crochet hats and slippers but the cost per unit for the yarn is what has stopped me so far even though it is a far superior yarn to what I am currently using. At the end of the day I want a great quality product but one that at the same time is affordable in regards to a handmade item. It's a bit of a juggling act isn't it getting it right.

    I am a knitter to so can appreciate the amount of time and effort that goes into each D&M piece and I actually think your prices are really reasonable :)

    Great work!!


  2. Thanks Tammi...I have had various price increases along the way...I've come to a point where I am comfortable with what I charge, but it really is a struggle to know what is realistic and what people will pay. I often look at other knitters myself and seriously think they have not costed their products correctly or choose to make little or no money, because hey at the end of the day you do want something out of will get it right I think most of us have a good instinct to what is reasonable to charge and there is a market for all price points. Vicki x

  3. Wow i am a beginner knitter and can't believe you can achieve knitting those beautiful hats in 4 hours! Maybe the people having a moan should try and knit the hat themselves! I also think the price is very reasonable! :o)

  4. Vicki I think there are some sellers who seriously undermine the value of a handmade item. Charging less than $10 for a knitted/crochet item gives the wrong impression to potential customers and that is where trying to get a reasonable price for something is hard.

    Do you mind me asking how one can go about sourcing wholesale yarn? In regards to the yarn I referred to in my first's a fairtrade product made in Peru but I have no idea of where to even start :)


  5. Tammi send me an email at and I'll see if I can help.

  6. Vicki, well said. I design and make my collection of children's clothing. Hours and hours of work.. It's such a downer when I am at a market and people um and ar over the price. Very disappointing ! No appliqué a line dresses or t shirts in my collection, just beautifully designed and handmade clothing. My husband says why do it to yourself! I reply I love it so much, how do I stop.

  7. my friend tammi suggest that i read this and wow,i hadnt thought of a lot of has been a very interesting read for me,im a sewer and also make handsewn items.given me food for thought,thats for sure,thank u.

  8. Hi Vicki, and well said and the ladies who have commented as well. I am now 54 and been making and creating items for much of my life and just love it..Can't sit at night or any time without something in my hand. Love to try something different and will always have ago at something new. I create things as I love to do it, love the smiles and the pleasure that others get from anything that I have made. Friends of mine over the years have said you need to charge by the hour, well, hello, you can't do that..People would not pay for it. My reply is I just love what I do and really appreciate the work that others like you Vicki put into their items. At the end of the day it all boils down to what you are happy with.
    Keep up the great work Vicki, I just love seeing what you have come up with next.
    Thank you

  9. Thanks again for all the lovely comments...I know it is difficult and a lot of my non crafter friends to state that you have to charge more per hour....but I think most of us that craft and sell know what is realistic and what other people are willing to pay....I don't want everyone to think that all my work is based on this one hat either....I will say for the first year I was in business which was the last year, I did have to outlay a huge amount of money for yarns, cards, packaging etc so my little business made no money...I made a loss, but I was told that most small business do make a loss for the first year or so....this year, things are looking good, so the long hours are worth it...although I am looking forward to knitting hats then listing them putting them up for sale...that has been a long time you live and learn. If I didn't enjoy it I wouldn't be doing it, and I think that is the case for a lot of us.

  10. Well stated, Vicki. Your work is vastly superior in quality to mass production, and better than mostly any vendor one could find at an average craft fair (aside from the rare gem), too, which should be a factor people should consider. The hats I've purchased from you are being worn by my second boy and they still look and fit the same as when they were brand new!
    This is fairly cheesy, but when I'm shopping great hand made I like to consider I'm purchasing from a "mastercraftsman." I know it is pretty much impossible to include that in your pricing but if you're good enough to be training an apprentice it matters to people like me! I don't mean that any other knitter's time is worth less or that someone learning to knit shouldn't profit from their work, but more that experience and workmanship matter - the quality of the product is going to be better and last longer.

  11. Hi Vicki..just as well we do love what we do to offer something crafted for sale, as we usually do it for pocket money...nobody could live off two or three dollars an hour!

  12. So very true Carol....I work a full time job so this is just my pocket money as well, there is no way knitting could ever be my one source of income....although I'd love it to be. It pays for all my addictions....clothes, cook books, yarn, makeup and crisp white sheets!!!

  13. Hi Vicki, Tammi pointed me in the direction of your post. Thanks for your honesty. It's interesting because I've always found it hard to price things, considering things like cost of materials and time taken. It's hard! Love the little hats! x

  14. Hi Vicki - my friend Abby of BubsBears pointed me in the direction of your post. This is a discussion that I've had with many of my creative friends over the years - and it was wonderful to see it written down so clearly from the heart. Thank goodness we love our creative outlets and sidelets otherwise we just wouldn't be able to afford to bother would we! Great blog ;-)


  15. Vicki - I would much rather pay a bit extra and support Australian artists (yes I do consider knitting to be an art). That way I can dress my little fella in beautiful, unique and well made items that will last as opposed to mass Made in China crap that falls apart after one or two wears. As a result I have less items in his cupboard to choose from but what is there will be worn over and over again. I agree with the commenter above that you are a Master Craftswoman - your hats are just gorgeous - and I hope you keep doing what do so well!

  16. Wow, that's a fabulous article and it really punches home what it's all about. I have arguments with non-crafting friends about this who tell me I should be charging an extreme price per hour - but this is wrong on so many levels; like you have stated, but also because, if someone who is less experienced/skilled and works longer to produce an item than someone who is very experienced/skilled, it just can't be reasonable for the pricing system to work that way.

    I'm finding that craft fairs are quite slow at the moment in these austere times, and I have to price according to the economic climate, the source cost of the raw goods, the hire of table/venue etc and weigh that up against the love of the craft, the love of the finished product, the love of doing something that has the essence of my joy and creativity, being worn with pride by someone else who just thinks it looks good.
    It's a big dipper of a road, and somewhere in the middle, you've just got to bite the bullet and pitch your price somewhere in the middle of all of that.
    Someone had started a discussion topic asking if it was a good idea to standardise pricing... I replied that it could only work if you standardised skills, levels of creativity and experience. It just can't be done. But, isn't that the point of making something unique?!

  17. Thanks for posting. What you say is completely true. People don't realise how long things take and how much everything costs. I posted some polymer clay earrings this morning and worked out that after fees and materials I was literally left with pennies! Your hats are gorgeous by the way:) Vic x

  18. Yes, I agree with you. I recently was involved in a 12 month business course & had a mentor during this time. It was drummed into me the importance of valuing the products that we make. When a product is designed & created by the artist, & often couture or limited edition, it deserves to be valued, first by the artist, & also by others. There is no business unless you are making a profit. Those that don't value what they make, & choose to charge cheap prices have a hobby only & will never have a business. I also love the pleasure of those who own my products. There is nothing wrong with selling at wholesale price to friends & giving gifts to family. At the end of the day it is whether you want a hobby or a business:)


Thank you for taking the time to leave a comment, They are all read and very much appreciated. Except for spam, they're reported to blogger and google+ Vicki x