Pricing Your Handmade Garments:
Tips for Fair Pricing
Pricing handmade garments can be challenging, and it’s easy to undervalue your time and skills. While staying competitive is important, you also deserve a fair return for the time, materials, and creativity you put into each piece. This guide will help you understand how to price your work so you’re fairly compensated without underpricing.
Key Components of Fair Pricing
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🧵 Material Costs (MC): Account for every supply needed to make the garment, from fabric and thread to smaller items like buttons and trims.
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⏰ Hourly Wage × Time Spent (HW * TS): Make sure you’re paying yourself fairly for each hour spent not only sewing but also planning, shopping for materials, and communicating with customers.
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🎁 Complimentary Gift (CG): Adding a small gift, like a bow or accessory, enhances the customer experience and encourages repeat business.
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🎀 Wrapping & Packaging (WP): Beautiful packaging makes your product feel special and aligns with your brand’s image.
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🛠️ Overhead Costs (OH): Include essential business expenses that keep your operation running smoothly—like website fees, utilities, equipment upkeep, and even listing fees on platforms like Etsy.
Basic Formula
Price = MC + (HW × TS) + CG + WP + OH
👉 Looking for a detailed breakdown, including real-world examples? Read on for a step-by-step guide!
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How to Price Your Handmade Garments
🌟 A guide to valuing your time, skills, and creativity—ensuring you don’t sell yourself short by underpricing.
How Much Should I Charge?
Pricing handmade garments can be tricky. We receive many questions in our Candy Castle Patterns Sewing Group,
showing it’s a common challenge for boutique owners and sewists.
Starting out, it’s tempting to price low to build a customer base. But underpricing can lead to burnout, while overpricing might scare customers away. So, how do you find the right balance?
Let’s look at a fair pricing method that treats your sewing as a business—not just a hobby. This approach will help ensure you're compensated for your time, skill, and creativity.
Step-by-Step Pricing for the Peppermint Swirl Dress
Let’s say you receive an email from a customer wanting a Peppermint Swirl Dress in size 2Y. Exciting!
Grab your pricing formula and let’s break it down.
Pricing Formula:
P = MC + (HW × TS) + CG + WP + OH
Let’s decode each part of this formula.
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1. Material Costs (MC)
This includes everything you need to make the dress. It’s easy to overlook small costs, so be thorough:
- Dress costs:
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- Fabric: 4 yards at $10 per yard — $40.00
- Thread: 2 spools at $3 each — $6.00
- Buttons: 3 buttons at $1 each — $3.00
- Bias Tape: 3 packages for the "Intense Volume" look at $2.50 each — $7.50
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Additional Costs:
- Pattern: If the pattern costs $10.00 and you plan to make 10 dresses, the cost per dress is — $1.00
- Printing: Ink and paper for printing the pattern — $1.50
| Item | Cost |
|---|---|
| Fabric | $40.00 |
| Thread | $6.00 |
| Buttons | $3.00 |
| Bias Tape | $7.50 |
| Pattern | $1.00 |
| Printing | $1.50 |
| Total Material Costs | $59.00 |
Tips for Calculating Material Costs:
- Buy in Bulk When Possible: If you frequently use certain materials, purchasing in bulk can reduce costs over time. Just be sure to factor in storage and any potential changes in material needs.
- Include Every Small Item: Don’t forget the little things like thread, buttons, or bias tape. Even small costs add up over multiple projects.
- Use Scrap Fabric: When appropriate, use fabric scraps from previous projects for smaller items or complimentary gifts to reduce waste and cost.
2. Hourly Wage × Time Spent (HW × TS)
Your time is valuable, and it’s essential to pay yourself fairly for your work. When pricing a handmade garment, consider both the time you spend sewing and any additional time spent with related tasks. Here’s how to break it down:
- Hourly Wage (HW): Decide on an hourly rate that reflects your skill and experience. For this example, let’s use $10.00 per hour.
- Time Spent (TS): Calculate the total time spent on the project. This includes:
- Sewing & Cutting: For a Peppermint Swirl Dress, sewing and cutting usually take about 4 hours.
- Additional Time: Add any time spent communicating with the customer, shopping for fabric, or planning the design. Let’s estimate an additional 1 hour for these activities.
Tracking not only sewing time but also tasks like planning, fabric shopping, and customer communication helps ensure you’re compensated for all the effort you put in. And while $10 is a modest rate for someone as skilled and creative as you are, it’s a good starting point for this example!
Total Cost for Time Spent: With 5 hours in total, the cost for time spent comes to $50.00 (see table for breakdown).
| Calculation | Amount |
|---|---|
| Hourly Wage (HW) | $10.00 |
| Time Spent (TS) | 5 hours |
| Total Cost for Time Spent (HW × TS) | $50.00 |
Tips for Calculating Your Time:
- Track Your Time: For your first few projects, keep track of the time spent on each step. This will help you accurately price future projects.
- Adjust for Experience: As you become faster with a specific design, you can adjust the time component. For example, experienced sewists may reduce the "sewing and cutting" time for a Peppermint Swirl Dress to 3 hours, allowing for a slightly lower price or increased efficiency.
3. Complimentary Gift (CG)
Adding a small, thoughtful gift can make a big impact on your customer’s experience and encourage repeat business. The "Complimentary Gift" doesn’t need to be expensive or time-consuming—it’s about adding that little extra something that makes your work memorable. Here’s how to approach it:
- Purpose: A small gift shows appreciation and adds a "wow" factor to the customer’s experience. This could be a little accessory, a sweet note, or a practical item.
- Example: For a Peppermint Swirl Dress, consider using fabric scraps to create a matching bow on a clippie. It takes about 15 minutes to make and uses leftover materials.
Cost Breakdown:
- Materials: $0.50 (e.g., a basic clippie or small ribbon).
- Time: If it takes about 15 minutes, we’ll add $2.50 (based on a $10 hourly rate).
- Total Complimentary Gift Cost (CG): $3.00
| Item | Cost |
|---|---|
| Materials for Gift | $0.50 |
| Time Spent on Gift (15 mins) | $2.50 |
| Total Cost for Complimentary Gift (CG) | $3.00 |
Tips for Creating a Complimentary Gift:
- Keep It Simple: Choose a small, thoughtful item that’s quick and easy to make. Bows, clippies, or small fabric accessories can be both affordable and appreciated.
- Use Leftover Materials: If you have scraps of fabric or other materials, use them creatively for the complimentary gift. This reduces waste and minimizes costs.
- Brand the Gift: Add a small tag or sticker with your business logo on the gift. It’s a subtle way to reinforce your brand while enhancing the customer experience.
4. Wrapping & Packaging (WP)
The presentation of your handmade garment is an important part of the customer experience. Beautiful, thoughtful packaging can make your products feel even more special and help set your brand apart. Here’s what to consider when calculating wrapping and packaging costs:
- Ribbon: Adding a simple ribbon around the garment can give it a polished look. Estimated cost — $0.50
- Thank You Card: A small handwritten note can add a personal touch and show your appreciation. Estimated cost — $0.50
- Business Card: Including a business card not only adds professionalism but also encourages repeat business. Estimated cost — $0.50
Total Cost for Wrapping & Packaging (WP): $1.50
| Item | Cost |
|---|---|
| Ribbon | $0.50 |
| Thank You Card | $0.50 |
| Business Card | $0.50 |
| Total Wrapping & Packaging (WP) | $1.50 |
Tips for Wrapping & Packaging
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Stunning Packaging Doesn’t Have to Break the Bank: Tissue paper is an inexpensive way to add elegance to your product, available in various colors and easy to buy in bulk. Another stylish option is eco-friendly kraft paper—it’s affordable, has a rustic, handmade feel, and aligns with eco-conscious branding.
- Add a Personal Touch: A small handwritten thank-you note is an inexpensive way to add warmth and personality to your packaging, making the customer feel valued.
- Stay On-Brand: Use packaging elements that reflect your brand, like ribbons in your brand colors or stickers with your logo. This consistency reinforces your brand identity with every order.
5. Overhead (OH)
Overhead includes all those ongoing costs that keep your business running smoothly, beyond just this garment. These might seem small, but they add up, and it’s important to factor them into your pricing.
Here’s what often falls under overhead:
- Website Fees: Hosting, domain, and maintenance costs.
- Utilities: Electricity, internet, etc., to power your workspace.
- Equipment Maintenance: Repairs or replacements for tools like your sewing machine.
- Fees: For example, if you’re listing on Etsy, include any transaction and listing fees.
- Transportation: Gas or travel for sourcing materials.
A common practice is to add around 10% of your total production cost (materials + labor) as overhead. Adjust this percentage based on your actual expenses as you go.
Example Calculation:
If your total production cost is $113.50, the overhead would come out to $11.35.
| Calculation | Amount |
|---|---|
| Subtotal (Material Costs + Time + Gift + Packaging) | $113.50 |
| Overhead (10% of Subtotal) | $11.35 |
Tips for Calculating Overhead
- Start with 10%: This is a solid starting point for most businesses; adjust as you gain more clarity on costs.
- Record Monthly Expenses: Tracking costs like Etsy fees, utilities, and website maintenance gives you a better sense of your actual overhead.
- Reevaluate as You Grow: Overhead needs can change over time, so revisit this percentage occasionally to keep it accurate.
Final Pricing Calculation
Now, let’s summarize each component to arrive at the final price for this specific Peppermint Swirl Dress order.
This is the total amount you should charge to fairly compensate yourself for your materials, time, skills, and overhead.
Here's a recap of the formula we’ve been using:
Price = Material Costs (MC) + (Hourly Wage × Time Spent) (HW × TS) + Complimentary Gift (CG) + Wrapping & Packaging (WP) + Overhead (OH)
Final Cost Breakdown for This Peppermint Swirl Dress order:
- Material Costs (MC): $59.00
- Hourly Wage × Time Spent (HW × TS): $50.00
- Complimentary Gift (CG): $3.00
- Wrapping & Packaging (WP): $1.50
- Overhead (OH): $11.35 (10% of the $113.50 subtotal)
Summing up all the components, the final price for this Peppermint Swirl Dress order comes to $124.85.
| Component | Amount |
|---|---|
| Material Costs (MC) | $59.00 |
| Hourly Wage × Time Spent (HW × TS) | $50.00 |
| Complimentary Gift (CG) | $3.00 |
| Wrapping & Packaging (WP) | $1.50 |
| Overhead (OH) | $11.35 |
| Total Price | $124.85 |
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Final Thoughts
And there you have it! This method ensures you’re fairly compensating yourself for your time, materials, and skills. Treat yourself and your business with the worth you deserve, rounding up to $125 if you prefer a clean, rounded number.
This formula works for any garment or handmade item you create. For different sizes or variations, adjust the materials and time accordingly, so each item has a price that truly reflects the effort you’ve put in.
Remember, this pricing formula can evolve as you gain experience and as your business grows. Periodically reviewing your pricing approach ensures it stays aligned with your goals and reflects the true value of your work.
I hope this guide has been helpful to you on your journey to fair pricing. Happy creating, and here’s to building a sustainable, thriving business that values your hard work!