Pricing Your Crochet Blanket: Factors To Consider

Pricing crocheted items can be a difficult task, especially when it comes to homemade items. There are a few popular methods to help you determine the price of your crocheted blanket.

The first method is to charge the cost of materials times three. This is a common method, but it does not take into account the amount of labour put into the project.

The second method is to charge an hourly rate, which ensures you are paid for your time.

The third method is a combination of the first two, where you charge the cost of materials plus an hourly rate. This method can be more complex, but it ensures you are paid what you deserve.

It is also important to consider whether you are selling your crocheted items online or in person, as prices can vary depending on the platform. Online prices for crochet tend to be higher than at craft fairs, for example.

Materials pricing

Pricing crocheted items can be a tricky business, and there are several methods to consider. The first, and least popular method, is to charge the cost of materials times three. This method is considered faulty by some, as it does not take into account the time and skill of the maker. The second method is to charge the cost of materials, plus an hourly rate, then double this number to get the retail price. This is a common method, but it does not include business expenses or profit margin. The third method, used by the most profitable crochet businesses, is to charge the cost of materials, plus an hourly rate, plus business expenses, times a profit margin, then double this number to get the retail price. This method can result in a price that is too high for the market, and may not be suitable for smaller businesses.

A fourth method, called the 'Balanced Method', is to charge the cost of materials, plus an hourly rate, plus business expenses, times 1.3 (30% markup) to get the wholesale price, and times 1.75 (75% markup) to get the retail price. This method falls somewhere between the second and third methods in terms of pricing, and may be more suitable for smaller businesses.

When pricing crocheted items, it is important to consider the time and skill involved in creating them. Crochet is a labour-intensive craft, and there is no such thing as a crochet machine! The type of stitch and complexity of the pattern should also be taken into account when pricing. It is also worth noting that online prices for crochet tend to be higher than at craft fairs, where prices are often lower due to heavy competition and customers looking for a bargain. When selling online, it is a good idea to research similar items and price your creations accordingly.

Some other costs to consider when pricing materials are:

• Additional items such as pom-poms
• Gift wrapping
• Transport costs (e.g. driving to the store to buy yarn)
• The full price of yarn, even if bought on sale
• The cost of any leftover yarn that will not be used elsewhere

Hourly rate

When pricing a homemade crochet blanket, it is important to consider the time and skill involved in making it. Many crocheters undercharge for their work, but this can devalue their craft and make it difficult to run a profitable business.

One way to price crochet items is to charge an hourly rate for your work. This method takes into account the time and effort that goes into creating each piece. When calculating your hourly rate, it is important to consider the minimum wage in your area and the level of skill and experience you have. Remember that crochet is a skilled craft that takes time and practice to master. You can also include the cost of materials in your hourly rate or add it separately.

Let's say you spend 30 hours making a crochet blanket, and your materials cost $50. You decide to charge an hourly rate of $15, which is a fair wage for your time and skill.

Your calculation would look like this:

$15 (hourly rate) x 30 hours = $450

$450 (labour cost) + $50 (material cost) = $500

So, the total price for the crochet blanket would be $500.

You can also add a markup to your wholesale price to get the retail price. For example, if you want a 30% markup:

$500 x 1.3 = $650 (wholesale price)

$650 x 2 = $1300 (retail price)

So, the wholesale price for the crochet blanket would be $650, and the retail price would be $1300.

Remember that the price you charge for your crochet blanket should reflect the time, skill, and materials involved in creating it. Don't be afraid to charge a fair price for your work!

Wholesale and retail pricing

Understand the Basics of Wholesale and Retail Pricing:

Wholesale pricing is what you charge to retailers who buy your crocheted blankets in large volumes. The goal is to earn a profit by selling your blankets at a higher price than what they cost to make. Retail pricing, on the other hand, is the price that individual consumers pay for a single blanket. Retailers buy from wholesalers at wholesale prices and then mark up the price to cover their own costs and profit margins.

Calculate Your Production Costs:

To set the right wholesale and retail prices, you need to know your production costs, which include the cost of materials (yarn, needles, etc.), labour (your time and skill), and any other overhead expenses such as shipping, handling, and marketing. You can use the following formula: Total Material Cost + Total Labour Cost + Additional Costs and Overhead = Cost of Goods Manufactured.

Set Your Profit Margin:

Determine your desired profit margin to ensure you're making a fair profit on each blanket sold. You can use the formula: Wholesale Price = Cost of Goods Manufactured + Profit Margin. A good wholesale profit margin is typically between 15% and 50%.

Consider the Market:

Research your target market and competitors to understand what similar crocheted blankets are selling for. This will help you set a competitive price that is in line with customer expectations. You don't want to price yourself out of the market, but you also don't want to undervalue your product.

Choose a Pricing Strategy:

There are several pricing strategies you can use, such as cost-plus pricing (marking up the total cost of production by a certain percentage), market-based pricing (setting prices based on prevailing market rates and competitor pricing), and value-based pricing (pricing based on the perceived value of the blanket to the customer). You can also offer tiered pricing, with discounts for bulk purchases.

Be Flexible and Adapt to Market Changes:

Pricing isn't a set-it-and-forget-it process. You need to be flexible and adapt your pricing strategy over time. Test different price points, analyse your sales data, and adjust as needed. Keep an eye on competitors' pricing and be prepared to respond to fluctuations in demand or changes in the market.

Don't Underprice Your Crocheted Blankets:

It's important to value your time, skill, and the materials used in creating your crocheted blankets. Don't underestimate the worth of your craft. Underpricing your blankets can lead to burnout and overwork, and it's also unfair to other makers trying to sell their handmade goods.

Online vs in-person sales

When it comes to selling your crocheted blankets, you have the option of selling them online or in person. Both options have their pros and cons, and you can even opt to do both. Here is a breakdown of what to expect from each.

Online Sales

Selling your crocheted blankets online is a great way to reach a wider audience. You can sell your blankets through your own e-commerce store or online marketplaces such as Etsy. This option allows customers from all over to purchase your products without having to travel to a physical location. Online sales also give you the flexibility to sell from home and manage your business remotely. However, there are some challenges to consider. Setting up an online store requires technical knowledge, and you will need to invest time and effort into creating product listings, taking high-quality photos, and writing compelling descriptions. Additionally, shipping can be a hassle, and you will need to deal with the costs and logistics of packing and shipping your blankets to customers.

In-Person Sales

Selling your crocheted blankets in person provides a more traditional shopping experience for your customers. You can sell your blankets at craft fairs, pop-up shops, or even your own brick-and-mortar store. In-person sales allow customers to see, touch, and feel your products before purchasing, which can be a significant advantage for handmade items. It also gives you the opportunity to interact with customers directly, build relationships, and provide a more personalized experience. However, there are some drawbacks to consider. Renting a physical space can be expensive, and you may be limited by factors such as foot traffic and parking availability. Additionally, you will need to invest time and effort into creating displays and promotions to attract customers to your location.

Hybrid Approach

You don't have to choose just one sales channel; you can opt for a hybrid approach by combining online and in-person sales. For example, you can have an online store and also participate in local craft fairs or pop-up shops. This gives you the best of both worlds, allowing you to reach a wider audience while also providing a personal shopping experience for customers in your area. A hybrid approach can be more complex to manage, as you will need to juggle both online and offline operations. However, it can be a great way to test the waters and see which sales channel works best for your business.

Overhead costs

When pricing your crocheted blankets, it is important to consider the overhead costs. Overhead costs refer to the expenses incurred in the production of your blankets that are not directly related to the materials or labour. These costs can include:

• Shipping and delivery costs: If you are selling your crocheted blankets online or at craft fairs, you will need to factor in the cost of shipping or delivering the blankets to your customers. This may include postage, packaging, and fuel costs.
• Marketing and advertising costs: To promote your crocheted blankets and reach a wider audience, you may invest in marketing and advertising activities such as social media ads, print ads in local newspapers or craft magazines, or participation in craft fairs and markets. These activities incur costs that need to be considered when pricing your blankets.
• Online selling platform fees: If you are selling your crocheted blankets through online platforms such as Etsy or eBay, these platforms typically charge a percentage of the sale price as a fee. For example, Etsy charges a listing fee of $0.20 per item, plus a 5% fee on the total sale price. These fees need to be factored into your pricing to ensure you are covering your costs.
• Payment processing fees: When you sell your crocheted blankets online, you will likely use a payment processor such as PayPal or Stripe to accept payments from customers. These payment processors typically charge a small percentage of the transaction amount as a fee. For example, PayPal charges 2.9% plus $0.30 per transaction. These fees need to be considered when setting your prices.
• Consignment shop fees: If you are selling your crocheted blankets through a consignment shop, the shop will typically take a percentage of the sale price as a fee. Consignment shops usually charge between 30-50% of the sale price, so this needs to be factored into your pricing to ensure you are still making a profit.
• Other business expenses: There may be other business expenses that you incur in the process of producing and selling your crocheted blankets. These could include the cost of renting a workspace, website hosting fees, accounting or legal fees, or the cost of attending craft fairs and markets. All of these expenses need to be considered when setting your prices to ensure you are covering your costs and making a profit.

Frequently asked questions