First of all I will need to admit that I struggle with this area. After about four years of doing scroll saw work for both customers and arts and craft shows I have come up with MY set of rules. Now I will admit that I borrowed most of the information and ideas from others but that is a way to get sound advice. If you choose to use any of the information be sure to make it your own. By that I mean tweak or change it to fit your needs or environment. Here are the several ways I and other scroll sawers come up with a price for a piece we make.
The first rule of thumb is to take the cost of material times a certain factor. It could be times two, three, four or more. And I do not apply the same rule or multiplier to every product. Example; for candle trays I may have one multiplier and for baskets another. Now if your cost of materials is $7 do not forget to bump it a little to cover things like blades, sandpaper, pattern cost and finish. So $7 might become $7.30 or whatever you feel comfortable with.
Some scroll sawers set a dollar per hour rate and keep track of how long it takes to make an item. Then the math becomes simple; your rate times the hours. Do not forget to add in prep time and finishing.
I guess that last one I know of is “Market Price”. After you have been to a number of shows you realize that an item will not sell at say $70 but you tested a $50 price and sold lots. Now your decision will be, is the $50 something I can live with or am I just giving it away? Your call.
Every retail store has these and you should consider them, also. A “Lost Leader” is an item that you make little or no money on. Here I will do some $3, $5 or perhaps some $10 items. People love these and will come in looking for them. If you are taking a loss make it a small one. I would opt for say a $5 item where material cost $4. Now I use these to engage people in conversations to talk about the higher priced items. That is the purpose of “Lost Leaders”.
In reality I use a combination of all of these. I feel that is the best way for me to approach pricing my product. Someday you will be ask about pricing and I say that I use a standard pricing formula used by most crafters but will say no more about. My price is my price and I will not negotiate. My customers expect the highest quality therefore I feel that my price is fair.
One final note – keep detail records.
There is an excellent BLOG called “How to price your woodworking to make a profit (and sell it)” by John Hufford (or Huff is his LJ name) and I suggest reading it. YES he is really talking about building Furniture but has a lot of good detailed information.
I would love to hear your comments and thanks for reading.
-- Just learning the craft my Lord and Savior Jesus Christ practiced.