This is not an easy subject; the fact that we get so many questions in our Candy Castle Patterns Sewing Group about how to price your handmade garment, proves that.
However, if you own a boutique, it’s very easy to sell yourself, your time, your skill and your garment short by underpricing.
It’s easy to sell yourself short when you are just starting out with your boutique, because you really want to start selling and building your customer base, but you may not be taking many things into account that you really shouldn’t forget about.
Yet, overpricing would mean, not selling anything at all, so how to find the golden middle between those?
Let’s see what makes a fair price – and we’re doing this the succesful business way. So, if you’re making something for your sister, you may want to price a bit differently – this pricing method builds solid businesses.
So, you’ve just got a customer email you, and she wants a Peppermint Swirl Dress in a size 2y. That’s great, you’re thrilled! You grab your trusty Pricing Formula and get busy calculating.
Let’s break that up.
The P in the above formula is what we want to find out: the Price.
MC are your material costs. Now, it would be easy to just buy your fabric and call the total of that your material cost, but we’ve got to dig a little deeper.
You bought your fabric, and for the size 2y, you bought 4 yards in total for $10.00 a yard. Let’s write that down on our material list:
However, you also had to get two spools of matching thread at 3 dollar a spool, and three adorable buttons at a dollar each. Also, you had to get three packages of bias tape, because your customer wants the Crazy Peppermint Swirl Volume. Let’s add those to the list too.
Great, that’s it, right! … Only it’s not.
You bought the Peppermint Swirl Dress pattern in our shop for $ 9.99 (let's round it off to 10.00). Let’s say you think you will end up making 10 dresses to sell in your boutique. So that makes the pattern cost for this dress 10 / 10 = $ 1 dollar.
Add it to the list!
There we are, right? Oh, we still need to print that pattern, and cartridges are crazy expensive. Let’s add printing costs to that, for your ink and paper. No one prints for free! Unless you print at work secretly. Which I would always recommend :)
Total $ 59.00
Now, that’s more like it. See, if you had only calculated your fabric, you would have been selling yourself short already!
We now know MC = $ 59.00
Let’s get to the next part in our formula:
P = 59 + (HW*TS) + CG + OH + W
HW stands for ‘Hourly Wage’ and TS stands for Time Spent.
These are both super variable, and that’s what makes pricing difficult. What do you pay yourself? What is your time worth, spent sewing for someone else, instead of sewing for your own kids, or going to the park with your kids?
This is a rather difficult question, and it’s something you have to decide for yourself. Please, please be fair to yourself.
Let’s say you think an hourly wage of $ 10.00 is a fair price. Personally, I think that’s rather cheap for someone as skilled and creative as you are, but we’re just grabbing a number here!
Time Spent: I recommend making a Peppermint Swirl (or whichever dress/garment/other handmade item you are currently using this formula for) for yourself/your own kids/a present for someone to see how long it takes you (and seriously, why wouldn’t you! I think every child in the world should have a Peppermint Swirl dress at least once in her life, and experience the Power of the Twirl!)
The average time it takes to sew a Peppermint Swirl is 4 hours including cutting, so let’s keep to that.
So that’s it, right, we now know our Time Spent? NO! We don’t! This is tricky, so please pay attention.
You went to the store to get this lady her fabric.
Maybe you had to go there anyways, and you only spent 30 minutes extra to pick out her fabric. Or maybe you ordered online and that only took you 30 minutes to pick out fabric, order and pay. So add those 30 minutes to your Time Spent.
And more importantly – I feel this is what most boutique owners who work with custom creations struggle with – you spent a long time emailing back and forth with your customer, showing her options, asking her measurements, showing her some fabric combinations, and some more fabric combinations, and answered her questions about your turn-around time, and so on…
It’s a bit harsh, and probably unfair, to add 2 or 3 hours of working time to your Time Spent for every ‘difficult customer’. On the other hand, you really should calculate this time into your price. After all, it’s time spent behind your computer you could have otherwise been ironing laundry (HA! HA! HA! Who does that!?) or baking cupcakes with your kids.
Let’s say an easy customer just takes you 30 minutes to email back and forth with fabric suggestions and measurements, and a less easy one takes you 1 hour. We’ll just take an average of that to add to your price: an hour of communication with your customer, for a grand total of 5 hours Time Spent to complete this entire dress.
If you create more of these dresses and you get faster as you go, you can always kick the price back a nudge as your TS (Time Spent) lowers.
So our (HW*TS) = Hourly Wage * Time Spent = 5*10 = 50.
Let’s get to the next part of our formula!
P = 59 + 50 + CG + WP + OH
CG stands for Complimentary Gift.
This is just optional, but highly recommended. For something so small, it's an amazingly strong marketing tool.
It’s the ‘little bit extra’ that was unexpected but so appreciated. It’s a little surprise for your customer that makes them order again another time. It doesn’t need to be something big or time-consuming; often, it’s the little things that really matter. Of course, you’re going to calculate that into the price.
I liked to use a small scrap of fabric (at no additional costs, because otherwise, I would have thrown it out) and sew a quick bow out of it (like the one in the Princess Dress pattern!) and hot glue it onto a clippie.
The clippie only cost me 0.50 cents and sewing the bow and glueing it together perhaps 15 minutes, so with our time added to that, the Complimentary Gift is in this case 3 dollar.
Your customer will not notice this additional cost (because we are certainly not sharing this formula with our customers, are we!?), but they will absolutely love you for it. You don't need to add a clippie of course, you can add anything to it, a little bracelet or some sweets..
So our CG = $ 3.00
Let’s move on!
P = 59 + 50 + 3 + WP + OH
WP = Wrapping & Packaging.
You want your customer to receive something special and handmade, a gift she treated herself (i.e. her child/someone else) to, and it has to look special. Not wrapped in yesterday’s newspaper.
It’s not just the wrapper though.
It’s also about adding a handwritten thank you card to it (to show your appreciation), not on the back of the sushi takeaway menu, but on some pretty stationary.
It’s your business card that you pop in that box.
It’s the cute ribbon you tie around the garment.
It’s the awesome moustache thank you-stamp you stamp on the box.
Well, whatever you use to wrap your garment to reflect how awesome your product is, this is your WP cost.
Let’s say you added a ribbon, a handwritten thank you card and a business card; the total cost about $ 1.50.
We now know:
P = 59 + 50 + 3 + 1.50 + OH
OH = Overhead
Overhead is basically every cost you have over the long term, not specifically for this dress, but for having a business overall; the costs of keeping your website up to date, listing your items on Etsy, the power for your sewing machine and your iron, photographing your items, your gas to drive to the fabric shop, doing research for new patterns; well, you name it.
OH is a percentage. Again, this is a bit personal, but I know most successful boutiques like to add 10% overhead.
There we go:
The total we had is = 59 + 50 + 3 + 1.50 = 113.50
Add 10% to that: 113.50 * 1.10 = $ 124.85.
We’ll round it up to $125.00 to have a nice round number to quote, and there you have it.
Of course, the Peppermint Swirl dress we used in this example is a very elaborate, rather fabric-heavy dress, but this formula works for every garment you want to sell.
For different sizes, you will use different materials, so you will want to quote your customer a different price for every different size.
I hope this article has been useful to you. Pricing is a very personal matter, so please use your own ideas and amounts to come to a price that is a perfect match for both you, your time and your business.
Until the next time!