Probably one of the things artists struggle with the most is how to decide what to charge for something they’ve made. There are a lot of considerations. How much is it worth? How much will people pay for it? How much did it cost in raw materials? How much time is invested? There are a few different ways to look at your pricing to make sure you make a good profit.
First, be honest with what you have invested. In order to have a hope of making a profit, you have to know your costs, so start with that amount. Keep in mind your costs need to include everything. Often when I’m working with artists that are struggling to make a profit from their work, they’re not charging enough because they are only factoring the direct costs of their raw materials. Also factor the cost of your tools and overhead, as well as your packaging and shipping material to make sure you are asking for enough.
Then add in something for your time. If there’s one thing I’ve learned working with fiber artists, its that the effort and time involved sometimes can’t be accounted when you set a price for your work. That’s okay. Particularly if your goal is to offset the cost of making things you love to make. But even if you only add a little for your time, you should add something. Some artists factor in a dollar value per hour and then determine how many hours a piece took to make. So if you place a value of $20/hr on your time, and you knit a scarf in 4 hours, add $80 on top of the materials cost. Others add “double or more” of the cost of materials. So if your yarn for a baby blanket cost $80 to make, then you could add the same amount in time cost for a total of $160.
Also consider the uniqueness of your work. If a piece is a one-of-a-kind, you should charge more than you would a piece that you make and sell repeatedly. Uniqueness adds value, but it’s up to you to determine how much.
Last, look around at similar pieces. What are other artists getting for their work that appears to be similar? What is selling and at what price point? I don’t recommend trying to undercut competitors’ prices as your sole pricing strategy. Price is just one way to stand out, and even on Etsy, trying to lower your prices to beat competitors and still make a profit is nearly impossible. People expect to pay more to get something that is handmade. You’ll do better with a competitive price and high quality work.
Only you can decide what price you will be happy with for your work. But if you take these things into consideration, it may help you to decide. Once you have the prices fixed for your first few pieces, it will start to get easier to see the range your pieces fit into.