Reality Check – on Price Setting in The Local Custom Cottage Sector

The times they are a-changin’.

This post seems to be older than 6 years—a long time on the internet. Dated info and offers may no longer apply. Some technical info might be outdated. Please feel free to post a comment with any updated info .

There is no one answer as to how to set a price. like any other brand/business model it is intricately tied to how one execute and deliver and what the market can sustain.  The pricing structure for artisan, custom or commissioned products differ from those that are mass-produced. Both have development cost – it takes time to develop a product. The cost of that product development has to be recovered BEFORE any profit can be claimed.  If you do an original… that is the full cost. Mass produced  Items the cost is transferred,over a number of items if you make a copy of an original from an image, your development cost  is less, since you  are working from an image and mostly technical vs creative and technical.

This recently came up in an online discussion on pricing.  There are several factors that affect pricing. While many  simply  go by a “perception of value”,  there is also  brand positioning, market factors, profit margin and business models. most of which  mom  and pop,  the artist, the creative seeking to earn  income never signed up for.

When a corporation runs  a business, those who execute are paid based on skill and experience and expertise.


If they learned via YouTube… they’d probably not be hired and if they are, they would be paid minimum wages $7-10 an hour
If they learned via YouTube and had work experience $12
If they learned via YouTube and had work experience and proficient $15
If they studied Formally they’d start at $15
Studied formally and have some experience $20
Studied formally and have some experience and were proficient $25
The more experience and expertise the higher the salary…

Management would not pay someone what they were not worth.  management also is divided into jobs that specialize

  • Design
  • Sourcing
  • Sample making
  • Production
  • Finishing
  • Packaging
  • Marketing
  • Sales
  • Fulfillment
  • Overheads

When you’re doing it by yourself putting out each garment/product – requires we do “all the above”
Many who have their own lines let their ego get in and put a salary not commiserate with their experience and so ‘overcharge” their businesses for services they cannot properly render.  In other words when pricing, cottage entrepreneurs need to at least charge for what they render.

Time each phase – there is a timer on your mobile or search Google “Timer”. Activate the timer, when you start, deactivate when you stop or take a break.
Note, make sure you record the time for each  phase. add the times to
Experiment with production techniques that cut execution time

After a while, you’ll be better able to average the cost of resources you’ll need even when you’re doing it by yourself.

One of the biggest drawbacks in developing a pricing  structure, is that many are not sure how much they should take as a “salary” The best advice is to make sure you accommodate a salary fo all your different “Hats”.  So that you  are able to able to compensate help as you  grow.  The idea of the hat came from a  story about a dance studio owner who would literally  put on a different hat for each differing task he put on. We started in Fashion and this discussion was in a Facebook sewing  group, so the terms were originally targeted for that purpose.

  • Inspiration & Ideation
  • Shopping – Material procurement
  • Design – creative execution
  • Pattern making draping – Technical execution
  • Sewing /Dressmaking – Production
  • Fitting – Testing
  • Embellishment – Styling
  • Marketing
  • Sales
  • Shipping and fulfillment

reality-profit-checkI usually find that most indie and cottage industry  entrepreneurs simply ignore cost because it’s too difficult to figure out. Sometimes it’s easy to create a unit surcharge, eg from one designer we identified a $15 per item for a target of 100 items a month with a goal to growing production to 300 a month. Exact numbers come with one on one consultations that involve some serious #realitychecks.

  • Space, Business office and or workroom , showroom, event spaces, popup spaces – if you  do not have a space to  work or are homeless you  cannot deliver. How you count these will depend on your accountant  The IRS and your financial consultant. Digital – from  wi-fi- phone- to  mobile and laptop.
  • Digital – from  wi-fi- phone- to  mobile and laptop. programs, subscriptions and professional consultants – lawyer, accountant, web developer, social media management (even if you  DIY (you spend time, as well as resources, developing content – images, video etc
  • Professional consultants – lawyer, accountant web developer… social media management (even if you  DIY (you spend time, as well as resources, developing content – images, video etc
  • Insurance , Taxes and compliance fees (in NY all who sew fashion must register and pay a fee)

This allows them to set targets and grow with a focus on profit.  We’re able to use this to help them  better connect their   positioning and profit margins to their ability to support their families and lifestyles! We interchange retail price and profit our goal is to get them within the purple zone which would allow payment to staff or facilitator.

There ar many craft apps that  give a pricing  structure few of these take into account  entrepreneurial or industrial goals.  The best bet Invest in  yourself speak to a business developer or consultant with an intimate knowledge of the creative sector.
I’d love to hear your take… leave a comment or Contact Us .




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