Authentic and Transparent Pricing - How Much Does It Cost?

A lot of words explaining why I've raised the price of my kitchen towels three times in four years.

One of the most common questions I get asked is "how long does it take you to make this?" and I don't think people quite realize how difficult of a question that is to answer. Of course, as a business person, it's a REALLY IMPORTANT question for me to try to answer. How do I know what to charge for something if I don't know how long it took me to make it? There's a lot of very bad advice on the internet (shocking, I know), but some of the worst I've ever read is trying to advise makers on how much to charge for their work. I've seen countless blog posts try to short cut this complex question by giving people a very simple formula: cost of materials x 3 (or 4, or 5 or 10). It doesn't matter what you're multiplying by, if you only take the cost of materials into account and don't include the time you've actually invested in something, you can't possibly price your work correctly. I know that it's partly because we all want a quick easy answer. Whenever I talk to other artists and makers, deciding how to price our work is literally our least favorite part of being an artist. But as much as we all hate to do it, it's really important to do it correctly if you want to succeed at selling your work for a fair price. You don't want to undercut your fellow artists while also short-selling yourself.

So yeah, I keep extremely complex spreadsheets trying to track how long it takes me to make something. And even then, I don't have a simple answer for a lot of the things I make. I like to switch up what I'm working on a lot so that I don't get bored. It's annoying to start and stop a timer every time I change tasks. And a lot of the things I make are one-offs, and I might never make something exactly like it again. But at least with kitchen towels, I've made so many of them that I can actually start to approach an answer.

So, how long DOES it take me to make a single kitchen towel? And how does that inform how I price them? Let's look at the answer.

The first part of the puzzle is that I don't make towels one by one, I do them in large batches to try to make things as efficient as possible. Right now, I usually do batches of towels somewhere between 30-50. Fifty is a nice round number that makes the math easy.

So for 50 kitchen towels it takes me around 8 hours to measure the yarn. Yup, just measuring the yarn. A towel usually has around 480 warp threads, and a batch of 50 towels needs 45 yards of warp. So there's a lot of yarn to measure, and to make sure it's all in the right color order for whatever pattern I'm doing. Then there's threading the loom: each of those individual 480 strands of yarn have to be correctly threaded through the correct shaft on the loom, and tied onto the front at perfect tension, there's another 6 hours. After that, I finally get to weave. According to my spreadsheet, I usually spend around 30 hours weaving one batch of towels. But weaving isn't the end, after that the towels get washed, separated, ironed, and then hemmed. So lets add another 6 hours to wash, dry, and iron 50 towels. I'll confess something: I don't hem my own towels anymore. I realized a couple of years ago that hemming is my least favorite part of the process, and if I had to keep sewing endless miles of towels I'd never want to make them again. So I pay a friend to do it, we'll get into that a little more later.

Okay, so all of that time adds up to me spending approximately 50 hours to create 50 towels. That makes it easy, I can say that on average it takes me about 1 hour to make each towel. The next question is: what's the salary I want to pay myself for being an artist? For spending a decade developing the skills I've learned? For the unique vision and design I apply to each towel? For putting my identity and sense of self into something that will go out in the world to represent me? erk. Here's where every artist goes into a slight panic attack trying to asses their value to the universe. Internal screaming: AHHHHH. Okay, whatever, just give it a number: Minimum living wage in my area is $18.46, but lets be a little generous and give myself a tiny bonus: My goal is to pay myself $25/hr. So I should aim to take home $25 of profit per a towel I sell.

But there's other costs involved beyond just my time. Obviously I have to buy the yarn that I weave. Right, so… 480 warp threads times 45 yards, plus the weft yarn, [mental math mumbling] that's around 43,000 yards of yarn, $160 total or $3.20 per towel. (Remember that blog post that told me to charge three times the cost of materials? HAH.)

But oh wait, I said I pay my friend to sew them, that's a cost too. I want her to have a reasonable salary, she's also developed important skills and deserves to get paid fairly for them. After getting a quote from a contract sewing company to know what the market is like, I currently pay her $6 per towel.

So for the cost of one towel we're looking at $25 for me, $6 for contract labor, $3.20 for materials. But there's a lot of other costs associated with running a business. I'm posting this blog on a website, which requires hosting. And I sell these towels through my online store, which takes a cut. If I sell them at a craft show instead of online, it can cost anywhere from $100 - $1000 or more. Not to mention, that I rent a studio where I make my work. And I pay for accounting software to tell me how much taxes I owe. All of this falls into the ominous "overhead" category. 

And lets be honest, there needs to be an "overhead" category for things that take time, not just money. Things like taking photographs, updating the website, actually packing and shipping online orders, or traveling and setting up for in person shopping events, doing the accounting so that I pay the correct amount of taxes. All of that needs to be taken into account too, in the end I'm lucky if I manage to make 100 towels in a month. 

My overhead expenses are around $425/month. So if I can make 100 towels in a month, I should add on an extra $4.25 for each towel to cover my overhead. So all told, the cost of a towel should be around $38.45. 

But we're not done yet… I'm lucky enough that some stores and galleries want to carry my work. This is awesome! Only, most galleries take a 50% cut on the things they sell. And you shouldn't be angry about this, I'm not. They have overhead too. They have rent on their beautiful storefront, they have employees to pay, they have connections with collectors and customers, they have their own websites to build and newsletters to bring people to their doors. I benefit from all those things by having my items in their store, it's all part of the system. So if I'm not angry about the 50% you shouldn't be either, but artists and customers alike need to take it into consideration when we think about what something should cost. If I'm going to sell something in a shop, I need to literally double the price.

Okay, so if I want to be an artist who makes a living wage I need to be able to sell a kitchen towel for $76.90.

If you're like me, you are definitely asking yourself how many people are actually going to buy a single towel for that much money? I fully confess, I'm not brave enough to ask for that much. It's taken a lot for me to get the courage raise my prices to $45 per towel. I sell more towels at craft shows than in galleries, so my average income for a towel does land around the $38 mark, and for now, I'm okay with that. Am I pricing my work perfectly? Never. But am I growing and learning as I go? - that's all I can ask of myself.

Most importantly, I think talking about how I come up with my prices can help everyone understand what it's like to try to sell handmade work and why things cost what they do. In our daily lives, most of us are so separated from everything it takes for a product to get to the shelf before we buy it that it makes it difficult to evaluate what an item is "worth." As a customer, I know it's easy to get sticker shock when you're out shopping at craft markets. And as a maker, I know it's easy to talk yourself out of charging what you should be asking for your work. But the more we're all transparent and authentic about what's behind the number, hopefully the more we can all appreciate what it really means to be an artist, and what supporting your local artists means to them.

Do you have any thoughts on what it's like to price your own work? Or how you decide if something is "worth" the price?

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