How To Price Your Handmade Products Correctly

Monday, 18 December 2017

One of the reason why a startup fails to grow fast is because the pricing of a product is too low.
When it comes to handmade products; its not as easy as another retail business where you buy something at x price, and you sell two times more and you are set. 
When it comes to making handmade product; there is a lot of hidden cost that you will have to observe and calculate. Im sharing a picture of how one can price product (something ive provided all my class students). in this picture you will see the basic pricing strategy that one should use to calculate your cost price. Now remember the markup can go much higher.
What we are providing here its the 'cheapest' you can sell. Remember; you are your own factory! So this is the lowest you can go. 
Don't sell too cheap just because you want to win the price war today. Because there will always be someone cheaper than you tomoro and your company will not be able to grow anymore. And another problem with this game of pricing is you will eventually reduce the quality of your product just to make a little profit. At the end everyone looses in this game!
I know that as asians we are always looking at price as a factor; But trust me; Thats so last gen (ie our parents time). in this generation there is another game; its called pricing according to value.
Provide value. Solve a problem! Make great packaging; Guide and teach more people about your product. Give something so valuable so that someone have gt no choice but to purchase your product from you..
*leave a comment if you need any further clarification:-)


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