You pour your heart into every piece you create. You source quality materials, perfect your technique, and package everything beautifully. But if you're like most crafters, there's one thing tripping you up: pricing.
These seven pricing mistakes are costing craft sellers thousands of dollars every year. Here's how to spot them—and fix them.
Mistake #1: Treating Your Time as Free
- The problem: You calculate material costs, add a small markup, and completely ignore the hours you spent creating the piece.
Why it hurts: If you spend 3 hours making something and only charge $20 above materials, you're paying yourself $6.67/hour. That's not a business—that's subsidizing your customers with your time.
The fix: Set an hourly rate for yourself—at minimum $15-20/hour, ideally $25-40 depending on your skill level. Track your time honestly and include it in every price calculation.
Mistake #2: Copying Competitor Prices
- The problem: "That seller charges $35, so I'll charge $32 to be competitive." You price based on what others charge without knowing if they're profitable.
Why it hurts: You don't know their cost structure, overhead, or whether they're making money. Many aren't. Copying their prices means inheriting their mistakes.
The fix: Calculate your own costs first. Use competitor prices as a market check, not a starting point. If your calculated price is higher, justify the premium or find ways to reduce costs—don't just undercut yourself.
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Mistake #3: Ignoring Hidden Costs
- The problem: You count the obvious materials but forget about packaging, shipping supplies, platform fees, tool replacement, and workspace costs.
Why it hurts: These "small" costs add up. A $0.50 box here, a 13% Etsy fee there, and suddenly your "profitable" item is breaking even.
The fix: List every cost associated with making and selling an item:
- Direct materialsEverything that goes into the product itself.
- PackagingBoxes, bags, tissue, tags, stickers, ribbon.
- Platform feesEtsy, PayPal, Stripe, website hosting.
- OverheadTools, workspace, utilities, software subscriptions.
Mistake #4: The "Friends and Family Discount" Trap
- The problem: You start by selling to friends and family at "just cover the materials" prices. Then those become your baseline when you try to sell to real customers.
Why it hurts: You train yourself (and everyone around you) to expect underpriced work. Raising prices later feels awkward or impossible.
The fix: From day one, charge full price. If you want to give friends a discount, make it explicit: "This normally costs $80, but I'm giving you a 25% friends discount." They see the real value, and you maintain your price integrity.
Mistake #5: Set It and Forget It Pricing
- The problem: You set your prices once and never revisit them, even as material costs rise and your skills improve.
Why it hurts: Inflation is real. If your supply costs increase 8% and your prices stay flat, your margin shrinks by 8%. Repeat this for a few years, and profitable products become money losers.
The fix: Review prices at least twice a year. Check:
- Have material costs changed?
- Has your skill level improved?
- Are you consistently selling out? (Price may be too low)
- Have platform fees increased?
Mistake #6: Racing to the Bottom
- The problem: You see a competitor lower their price, so you lower yours. They respond, you respond, and soon everyone is selling at a loss.
Why it hurts: You can't out-cheap mass production. Competing on price alone is a losing game for handmade sellers.
The fix: Compete on value instead. Emphasize what makes your work special:
- Quality materialsPremium supplies that customers can see and feel.
- Unique designsOne-of-a-kind pieces they can't find anywhere else.
- Personal serviceCustom options, quick responses, beautiful packaging.
- Your storyThe artisan behind the product and the craft tradition you represent.
Mistake #7: Emotional Pricing
- The problem: You feel guilty charging "too much" or worry customers won't pay, so you price based on emotion rather than math.
Why it hurts: Your feelings about money aren't the same as your customers' feelings. Many customers happily pay premium prices for quality handmade goods—if you let them.
The fix: Remove emotion from pricing. Calculate your costs, apply your formula, and set the price. If it feels uncomfortable, that's often a sign you've been undercharging. Trust the math.
Remember: When someone says your prices are too high, it usually means they're not your customer—not that your prices are wrong.
Your Pricing Fix Action Plan
- Audit your current prices. Pick your top 5 sellers and calculate true costs including time and overhead.
- Set your hourly rate. Decide what your time is worth and commit to including it in every calculation.
- List all hidden costs. Packaging, fees, tools, workspace—write them all down.
- Recalculate prices using the complete formula: Materials + Labor + Overhead × Profit Multiplier.
- Schedule regular reviews. Put price reviews on your calendar for every 6 months.
Pricing correctly isn't about charging as much as possible— it's about charging what's fair for the value you provide. Fix these mistakes, and you'll build a craft business that actually pays you what you're worth.
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