What kind of work are you doing?
ACTIVE WORK
You are selling physical items or actively participating in every sale that you make.
Example: custom made or ready-made products, coaching/mentoring, sponsored posts
PASSIVE WORK
You make the work once and then the item can be sold again and again automatically without you actively doing anything.
Example: patterns, e-books, videos, courses, affiliate links
Is this your part time or full time job ?
There is a big difference in what you need and what you want to earn.
If this is your full time job you might both have the time and energy to focus on your job and therefore be able to make more money. But if it’s just a part time job and you don’t depend on it, you can work less (and work when you want to) and therefore you don’t need to earn that much.
If you are in-between and you want to make this your living, my advice is to keep your other job so you know that you can pay your bills – if you are able to go down in hours so you just earn what you need, then you can spend the free time you have on your own business but still be able to take it slow and do it your way.
How much to pay yourself
Example:
Money: You need/are satisfied with 175 euro per week – 700 euro per month.
Time: You want/are able to work 40 hours a week – 160 hours a month.
Your hourly rate: 175/40 = 4,37 euro
HOW MUCH THE PRODUCT HAS TO COST
Let’s say you can make 10 active products a month.
700/10 = 70
That means that your product has to cost 70 euro.
HOW MANY PRODUCTS YOU HAVE TO SELL
Let’s say a passive product costs 5 euro.
700/5 = 140
That means you have to sell 140 passive items a month to earn 700 euro.
How to price your products
Option 1.
You can look at all the individual factors regarding the product and then calculate how much that is.
TIME
– How much time did you spend making the item (and how much do you want to pay yourself an hour)?
MONEY
– How much money did you spend on materials?
You spent 15 hours. You pay yourself 4,37 euro per hour. The materials cost 10 euro.
15×4,37
+ 10 = 75,55
75,55 euro is what the product should cost.
Option 2.
Forget about the time and money spent and instead find a fixed price for that item.
TIME/MONEY/ENERGY
– How much time, money and energy did you spend on this product? Is this a product you made as a “test design” where you were just playing around?
QUALITY
– How is the quality of the product and materials? Is the work kind of slobby or is it done with a lot of effort and precision?
OBJECTIVELY
– If you saw this in a shop, how much would you pay for it?
What amount do you think is fair when keeping these factors in mind?
Custom made or ready-made products
In my opinion custom made and ready-made items should be priced differently as there is much more work going into custom made products.
CUSTOM MADE
– communicating back and forth with customer
– working with their specific measurements
– making the item in the color, material and style that the customer want
– pricing can be difficult as the item may take longer for some customers than others
– the customer doesn’t exactly know what they get before they receive the item – this can cause uncertainty and stress for both creator and customer
READY-MADE
– the product is already made in the color, material and size
– in the listing you can state all the details about the product – this way the customers knows what they get
– easy to price as you can just determine from the time, material or quality how much you think it’s worth
Setting a goal
It’s a good idea to have a goal in mind – what is your goal – how much do you want to earn and how much do you want to work? Even though it might seem unrealistic right now it’s good to have an idea about where you want to be so you can move towards that.
Final thoughts
Only you can decide what your time and effort is worth. Only you can decide what your hourly rate looks like and how many hours to work.
If you don’t want to work that much then that’s just perfect, there will always be people out there willing to pay a good price for your work. Remember to pick the customers that value you and your work.
There is no recipe on how to do it right. If you want to sell your items cheaply, then do that!
We are all different and the most important thing we can do is stay true to ourselves and what is important to us.