So you’ve started a business selling baby or birth related products like baby slings, baby bracelets or kits for laboring couples. But how do you set a price that covers your expenses, but doesn't scare off possible buyers?
Build an excel spreadsheet that details each of your costs. Include every material. For example, if you’re sewing baby slings you’ll want to include not only the fabric, but the thread and any hardware you need.
But it’s not just materials that you have to account for. How do you sell your products? Is it on eBay? Then you have to account for eBay fees. Do you plan to accept PayPal? Have you accounted for those fees? Do you have a website? Is the hosting free? Are you listing your products on a site like TheOnlyBabyStop that charges you?
Do you have a product that needs to be shipped? Have you accounted for shipping or are you going to charge that to the buyer?
Make sure you include all of these fees into your expenses when setting your prices.
One of the big things people forget to take into account when selling handmade products is their own time. You are supposed to give yourself an hourly rate. So how long does it take you make the product? If it’s two hours, and your hourly rate is $6/hr you just increased the price of your product by $12. So what’s it going to be? Minimum wage? $8 an hour? $10?
Of course, if you’re making these products as a hobby because you enjoy it and it gives you a break from your daily life, kids or partner then you can lower your hourly rate or decide not to give yourself one as you set your price.
Your first instinct may be to undercut your competitors by a dollar or two. But maybe there’s a reason why your competitors charge so little. Maybe your product is better and you can use this as a marketing opportunity. Maybe you can note how much better your product is than your competitors. Think of Nordstrom. Yes, it costs more to shop there, but their products and customer service are better. Can you offer that to your buyers?
Now you have to go back to the beginning to that excel spreadsheet you made that detailed out your costs. Can you cut them? Can you find fabric at a lower price that’s the same quality? Should you charge for shipping? Can you find your materials at wholesale? Can you get a discount from any places charging to list your products? If you can, you can lower your price to make it more competitive.