I'm not a business person and I've always hated dealing with numbers...perhaps that's one reason why I took Arts! :p I love crafting and last year I've decided to sell some of my handmade faux cupcakes online. It was hard for me, as I don't know how to price my items. I asked around my friends on how should I price my work, and they would just reply "just double the material cost!" I would cringed by thought of it, I worked hard for one faux cupcake and then..."just double the material cost!?" :p What about my labor of love? I worked hard for it didn't I? :p
So, yeah, I still sold each for just twice the cost of all my material costings and totally forgetting the labor cost, indirect/overhead cost, the Etsy listing fee, transaction fee, PayPal fees, handling fee, etc. I know I'm such a terrible business person. I barely made profit from my first few sales. But I'm very much thankful for them because they gave me my first positive feedbacks, which gave me some more sales! ;)
It took me a while to fix my pricing. I had to calculate everything right (materials, labor, tranction fees, etc.) Once I got my price, I compared it to others who sell the same items. I pretty much have the same price (some even have higher). So, I guess I calculated right. :)
For other crafters out there who don't want to get all crazy getting you pricing right, here are some free tools to help you get them right:
Free Spreadsheets for Pricing your Work by a great jewelry designer/maker Chris Parry
Etsy Seller Inventory Worksheet - this is and Excel Spreadsheet which helps Etsy sellers track down their inventory and profit.
Make sure that the price is right! ;)