Are you paying a “fair” price for hand made?

Pricing is probably one of the most difficult parts of any creative business, and I’ve advised many others over the years that we make it more difficult by trying to be our own customer. Pricing our high quality hand made items, that may have taken many hours to make, using specialist tools or equipment at a price that we, the maker can afford.

This post was partly inspired by some social media posts from other creatives, who just seem to be obsessed with making what they create as cheap as possible. It really got me thinking about the real cost of making a quality handmade product.

Now, as far as I’m concerned, the creative industries are massively undervalued and underpaid, and that mindset just passes down the line. We “should” be able to afford our own wares and I’ll talk a bit about that later.

We have to remember that although our main interest is in making beautiful things, we are still running a business. Yes, a small one, but would you expect the boss of any other type of business to not even be making minimum wage?

So, here’s an example, based on a silver wedding ring that was being sold for just £40. (I’m going to assume it’s been properly hand made, and the time and attention needed to get the high quality of finish that you would expect of a wedding ring has been taken.)

The raw materials are likely to have cost around £6. I suspect for the price it is, it probably hasn’t been hallmarked (which is a shame, especially for a wedding ring) but let’s allow £10 for that cost anyway. Let’s also assume your rent/mortgage etc is a very modest £20 per day. You may make this and perhaps another piece from start to finish in a day, so that’s another £10. Then there’s an allowance for power and heating, perhaps £2, then another allowance for wear and tear on tools, maybe another £2. Postage and packing will be at least £5, so we’re already up to £35 and there’s no allowance been made for things like advertising, insurance, subscriptions to craft organisations, the cost of exhibitions etc. So, essentially, the person making this has probably only really earned at best £5!!

Now I don’t mean this in any kind of derogatory way, but this is essentially the “Hobby Economy” and not a sustainable business. The problem here is that with the increasing trend for craft workshops, people attend these for a few weeks, or maybe even just a few days, and then think that they can set up a business, forgetting or just not knowing about all the other “stuff” that they need to consider when pricing their work.

They end up pricing their work way too cheap and then wonder why they can’t make a living from their craft. This mindset then turns into the belief that it’s just impossible to be a maker and earn a decent living and they have to either put up with being poor, or continue working another full time job along side, to support what is essentially only their hobby as it’s not making enough income to live on.

The trouble is, with so many “hobby businesses” popping up, that are never going to be sustainable, the actual highly skilled creatives, who may have trained for many years and really should be earning on a par with other highly skilled jobs, find ourselves devalued.

I guess you can’t really blame the people trying to run the hobby businesses as they just don’t know. Why would they? We’re not really taught anything about business at school, or even as part of a creative degree. I seem to remember (back in the dark ages when I was doing my jewellery degree) having just a couple of afternoon lectures about running a business.

I was lucky though, as in my family, I’m at least 3rd generation of small business owner so I’ve grown up learning how it all works by osmosis.

So… if you’ve got to the end of this…well done!! I think my main point is to ask those of you that want to help the small

business economy survive, when you next visit a craft market/small shop/creative selling event/hand made businesses website/Etsy etc, ask yourself, am I actually paying a fair price for this item? If you’re a creative business or hobbyist, please ask yourself the same question. Is this person really running a sustainable business that’s providing them with enough income that they can then spend themselves in other small or indie businesses, or are they just (perhaps unknowingly) exploiting themself? Only ever earning enough to scrape by, meaning they have no choice but to buy from cheap mass production companies, that are polluting the planet and exploiting the people they employ…and so the vicious circle continues!