2. It’s Time to Discover Your Worth and Increase Your Value as a Handmade Artist!

– Why have we come here? There’s still some time left to the New Year, we should get ready, and you dragged me, even with these kits. And now you’ve brought me here with all these kits. So many people! They’re already annoying me!
– Kate, wait – I am thinking of an idea. Just wait. You know, we made a lot of these kits! But we can’t sell them. Our money is tied up. Maybe we should try to get some of that money back, especially before New Year.

– What do you suggest?
– Look, there’s a market here today. Let’s ask someone who sells products if they are interested in selling our kits along with their own. If they agree, then we’ll divide the profit. It might interest them as well.
– Sara, are you crazy? They paid for their booth, and you want to just put our kits up for sale? Nobody will agree with this. Trust me!

– Well, let’s give it a try. What do we have to lose? This is our last chance!
– Let’s talk to those two girls here. They seem to have a variety of things for children. Maybe they’ll be more open to it?
– Hello! – one of the girls said timidly. – You have some exciting toys! How much are they?
– Good evening! They were 50 dollars. Are you interested for your child? – Anna asked her coldly.
 – Actually, no… My son is nine years old now, – she replied with a smile on her face. Her voice got softer.
– Girls, I feel bad, but I need your help. My friend and I decided to start making sewing kits for fabric dolls like this one – she handed us a cylindrical box.

– Everything inside: the doll’s body, dress, hair, and even shoes. We spent too much effort on the idea, sewed all night, and created custom packaging. We can’t sell these sets, though. We started an Instagram page, but nothing has worked out yet. We’re so confused about what to do with the whole thing. Maybe you could display a couple of sets on your table, and it will happen if someone goes to buy something. It’s almost New Year. Such a great gift option!
– Well actually, we need to sell our products… We haven’t even covered the rent yet!

– It’s Time to Discover Your Worth and Increase your Value!

Meanwhile, I opened the set and looked at its contents: everything was nicely lined up all around, the doll’s hair – made of perfect quality wool, instructions with illustrations inside. And these are such tiny shoes. 

“Yes, cutting out and sewing such shoes must take ages! And this box is quite interesting – it can easily be sold for 70 dollars or more! I wonder how much they sell this set?” – I thought in my head.

– I understand… You paid for the booth, so if the sets sell, we’ll share the profit, – the girl tried to persuade us.

– What are the prices of the kits? – I continued inspecting the materials and asked.

– 90 dollars. So, here again: 10 dollars for the box, 5-dollar color printed instructions (probably), and materials (probably about 20-30 dollars, you get what you pay for). Yes, and then: probably the labor. The bodies are already sewn, as well as the shoes. They still have to be packed separately. Oh, my! How much do they make?

We’re willing to give you 50% if they sell! – one of the girls kept trying to persuade us. At that moment, the second girl widened her eyes and coughed nervously as if she said, “Are you crazy? 50%?” But she remained silent. 

I gave the box to Anna so she could see the new stuff. My friend calmly looked into me with a doubtful look: “Should we take it or not?” – but I didn’t sense anything enthusiasm but rather a plea to say “No.”

– Yes, we will take it! I confidently decided.

– It doesn’t take much space, and maybe someone will want it, so let’s try it!

They promised to come back after the market closed in half an hour. Girls like this disappeared into the noisy crowd of visitors to the market. The kits were still available for sale… 

But my head kept thinking: why to make such efforts to create a product and settle down for less than 40%: my brain couldn’t comprehend it.

– It’s Time to Discover Your Worth and Increase your Value!

KNOW THE VALUE OF YOURSELF

Yes indeed! Many creative people don’t appreciate their work. Well, not everyone, but most do. They tend to put in long hours of hard labor, and much even work at night, and for this one is paid 1500 to 2000 dollars per month which are considered a good wage for handmade designers. But let me tell you: THIS IS NOT NORMAL.

How do creative people undervalue their work?

No matter where you live, whether in a different part of the world or not. Your skills and knowledge deserve their fair price. This is because many artists are worried about losing customers, so they set very low prices to make a sale someday. Therefore, they redo all that work repeatedly and around every whim of the customer who wants everything for 100 dollars.

Here is my advice—learn to know these customers from the beginning and do everything possible to avoid taking their orders. You will go through it because no amount of money ever pays for the pain and effort. Let me share an experience from my past:

Once, a girl asked me a question (or order) to create a toy with a suit. Of course, it wasn’t too hard, and I needed the client, so I quoted the lowest price. The client kept pestering, asking tons of questions like: Will it look precisely like the picture? Can I get a color variety? Could you show this piece yet unfinished? I patiently answered all those questions and hoped the client would give ‘YES “.

But, in the end, I regretted it ten times over. Why? Because I could have realized during our communication that it would be difficult and immediately refused the order. It would save me tons of trouble and regret!

To increase your value in the eyes of others, you must first increase it in your own eyes! This a simple exercise but powerful enough to boost your self-confidence before going out on the field to work—start saying “NO” to customers even if you need the job badly! If you don’t feel excited about the project and only want to get paid, saying ” NO ” is better.

Yes, you might lose some money in the short term. However, you will win something vital—the inner confidence and realization of your value in time and energy!

Determining the cost of your work. Pricing for creative individuals

Calculating the cost of your work is a common question that many creative individuals ask themselves. While it’s great to be creative for personal development, you might need a better income.

If you want to earn a very good living from your creativity and avoid remaining an underemployed self-employed person with no profit like so many artists do (who then have to struggle to make ends meet), you need to approach this with an economic mindset virtually just like any other proper business would.

Unfortunately, many creative individuals are not well-versed in economic concepts. As such, you would require help objectively assessing the cost of work and subsequently price and selling effectively at a price that not simply covers material expenses, however at making a profit by being too clever about calculating the costs of products and correctly evaluating profitability.

Let me talk about the cost of work and pricing in a simple manner.

Product’s cost price + Margin = Product’s selling price

Margin, % = Margin / Selling price x 100%

Margin calculation plays a significant role when starting and planning your business. It helps you understand how much money you’ll make and how much more you can earn.

The margin represents the difference between the price and the production cost. In other words, it’s the amount of money you get to keep from the total cost of your product or service. For example, if a product costs $200 and the production price is $100, you’ll be left with $100 after the sale. This $100 is 50% of the product price, representing your product’s margin. It’s important to note that many people confuse the concept of margin with trade markup.

Trade markup refers to the percentage by which the selling price exceeds the production cost of the goods. It can be 100% or 200%, but the margin cannot exceed 100%.

Now, let’s discuss what the price comprises. Many people mistakenly believe that the price primarily includes the expense of materials, but that’s only partially accurate.

– It’s Time to Discover Your Worth and Increase your Value!

Pricing your handmade work and estimating the cost of running a handmade business is often difficult, as it requires an assessment of multiple factors to reach appropriate conclusions without selling yourself short or overpricing your craft. As an artisan considering how to sell your art, you should know the competition and assess whether your market is substantial enough to make a living by creating and selling original works.

Pricing can be one of the most challenging aspects of creating; great artisans want to get their work out into the world but may not know the price points for selling such greatness. “Underselling” at a lower price point may diminish your customer’s perceived worth in terms of value.

Experienced artisans set higher prices out of pride in their art and quality. You need to remember that setting the price for your artwork is not about being thrifty (that honorable trait reserved for poor masters) but about reflecting the various realities upon which your pricing choices rest: monetary value, time with effort goes into making each piece, and demand in the market.

Pride in what you’ve achieved naturally leads folks to raise professional prices after they achieve some semblance of recognition. Ultimately, charging for your work should reflect its worth and the skill and craftsmanship you bring to each piece.

Several factors need to be considered to determine the price of your work

These factors include:

Materials: This includes the cost of packaging, the materials themselves, consumables, electricity used during production, and materials delivery.

Shipping: A minimum amount should be included even if the customer pays for shipping. This accounts for postage fees and the time spent preparing and handling shipment documents.

Time: The amount of time spent on manufacturing should also be considered. While assigning a specific value to an hour of work can be challenging, you can rely on your judgment in this case. If you don’t have any guidelines, you can calculate the cost based on the average wage in your area.

Advertising, promotion, taxes, and additional charges: It is advisable to allocate at least 10% of the price of a product or service to cover these expenses.

It should be noted that price alone does not solely come from these costs. The market you target, average rates, and competitors’ prices also play a part in determining where to set your product or services. Since you aim to gain the upper hand in the market, your offer has to conform with prevailing rates. For example, if products like yours carry an average rate of $30-50, setting your price at $100 would put you at a disadvantage.

Even if you rely on competitors’ prices for your products, you should still calculate the costs and profit margins accurately. Failure to do so could mean losing money and having a non-profitable business. You are generally better off with higher profit margins for cheap things and lower profit margins for expensive items.

Generally speaking, one makes more profit by maintaining higher margins for inexpensive items and lower margins for costly items.

Setting your margin at 30-50% on average seems sensible. If you calculate very well and end up with a high margin, it means successful sales; if low, adjust accordingly to sell more loads.

Assignment 2. Calculate profitability by product or service category. If the figures are below 20-30%, raise your prices. Otherwise, you will soon have to close your project due to low efficiency.

– It’s Time to Discover Your Worth and Increase your Value!