This is a long rant about pricing of hand crafted items and profit and why they are dying.
I wanna talk to you tumblr about hand crafted items, pricing and profit. In this day and age where so many items can be manufactured for a cheap price and sold for a cheap one. Many people have come to the expectation that they should be able to get anything they want for severely low rates. So when encountered with the prices of a hand crafted item many people back away, some in disgust at the price, others because they really cannot afford it. The issue is because so many people turn away from hand crafted items at the price. Saying to themselves, "Why should I have to pay that much is is outrageous!?' many of the crafters stop being able to support themselves and make their products anymore. The only solution for them is to lower their prices clearly. Which is what those people demanding lower prices want. They will then look at the crafters and say, "See now you are selling things. You clearly were over pricing your work and now you will do better."
but what they don't realize is that is wrong. Most hand crafters still loose money once they lower the prices to compete with manufactured items or the dying economy.
In order to make a profit on an item you have to have the price cover the cost of materials, for example: I make an item and my materials cost $25 to make. This means the item ALREADY has to cost AT LEAST $25 in order for me to not be LOOSING money.
Now just covering the cost of materials it not how business works or how life in general works. People are paid for the labor placed into a job. You get an hourly wage that is paid to you for your work given. Minimum wage varies in different sates from $7-$10 most average out around $8
let's take a moment an think about that. $8 an hour. for minimum wage. Minimum wage is defined as the minimum money you need to earn to make a living. I work 20-25 hours a week in retail making $8.31 an hour. on average I get 7,000-8,000 a year. Now tell me someone how anyone can justify that being enough to live properly.
so for the sake of my example I will pay myself $10 an hour. Which still is NOT a lot. In fact Ben an Jerry's pays their entry level employees $15.75 an hour because they determined as a company that was the needed wage to actually live in Vermont.
anyways so this item I am making I spend 3-4 hours making it. at $10 an hour that is another 30-40 dollars for the item I am creating making it need to sell at 55-65 dollars. This is already getting to a price point that most people won't buy it. Which means I am already screwed, We haven't even talked PROFIT yet.
Profit is what you get AFTER you subtract the cost of materials AND the cost of labor. A lot of people don't know that profit comes AFTER labor and there for they don't actual pay themselves for their labor which promotes free labor for a product...which is not really how...this works people...
so figuratively my item that now costs 55-65 dollars I need to add to to make a profit, which is what is going to get me food and living, all that junk. So I decide on this item I want to make a $40 dollar profit. which puts the item at 95-105 dollars. This is SO far out of the price range people will willingly want to pay that I won't actually make any money because I won't be SELLING any.
and it might not even have anything to do with people just being unable to pay it because they are trained to expect to pay less. It could be that they REALLY can't afford it and that is a blight on the economy as it is. People can't AFFORD things with how much they are making. So it brings me back to the point that WHATEVER you are getting paid or paying yourself probably isn't enough to live happy.
So going back to my item the only way to actually sell it is to remove the profit and just break even with materials and labor. Which could lead me into a pit because if I am not making enough and I am spending time to make these that takes away from time I might have for another job then I am screwed. Even then most people wouldn't pay 55-65 for a lot of things.
And this tumblr. Is why hand crafted items and artisans are dying out. The economy is killing us and making it impossible for anyone to survive. Also as soon as one person stops paying themselves correctly then no one makes money because everyone thinks 'Well this person only sells it for $35.' and there you have it the person that is not paying themselves properly makes it even harder for anyone else. Which is why you should make sure you are not under paying yourself or that you are actually making a profit off of what you are doing.