If you’re serious about growing your craft business, determining a price for your handmade goods requires a little homework. The crafter who prices her goods without considering all her expenses will lose money. The crafter who forgets to include a profit margin won’t be able to grow her business.

Smart pricing considers the of cost of goods, labor, overhead, and profit margin.

Cost of Goods (COG)
This is the cost of the materials you use in a finished piece. If you make quilts, this figure would include the fabric, batting, and thread used in one quilt. It would not include your sewing machine or your iron.

Labor
Labor is the money you pay yourself to make a finished piece. It is usually based on an hourly wage and calculated by multiplying your hourly wage by the amount of time it takes to make a finished piece.

Overhead
Overhead covers the things that make your business run, but aren’t directly related to a finished piece. It might include things like booth fees, utilities, and promotional materials.

Profit Margin
Your profit margin is the money your business makes. Don’t confuse “labor” with “profit margin.” You need both.

To help you determine your prices, I’ve created The Crafter’s Smart Pricing Worksheet that’s free for you to download. The simple one-page worksheet is easy to follow and works for both wholesale and retail prices.

If you’d like your own copy, just sign up to receive your free download, and I’ll send it to you right away. My mom taught me to share, but I never share my toothbrush, my oatmeal cookie recipe, or your email address. Never!

If you’re selling your handmade goods through Etsy, you’ve probably thought about getting your own website. While sites like Etsy are a good place to sell your lovelies, having your own website is essential for the crafter who is serious about growing her business. Why?

1. Brand yourself

Compare the pink-haired rocker chick who makes goth quilts to the nature-loving vegan who makes organic cotton quilts. Both make quilts. Yet, both have very different and distinctive brands.

It’s difficult to distinguish yourself from other crafters on Etsy because there are so few personalization options. With your own website, you have complete control of your look and feel so that everything on the page promotes your brand.

2. Establish yourself as an expert

Having your own website allows you to talk about your craft with a passion that is seldom seen on an Etsy page. By explaining your process, for instance, you give your readers (and potential customers) a glimpse behind the scenes of your work.

The potter who explains why a certain glaze is not food safe will establish herself as an expert by educating her readers, making her the first resource customers think of when they’re ready to buy.

3. Connect with your potential customers

With Etsy, you oftentimes only get to communicate with your customer after the sale. Having your own craft website gives you the opportunity to connect with your potential customers before they buy, building customer confidence and loyalty.

Building relationships with readers also has the benefit building a community. By listening to your community, you get can learn what types of products will help them solve their problems. The crafter who makes wooden spoons may find a new market by listening to an arthritic customer’s problem with thin handled utensils.

4. Help People Find You

Searching Etsy’s site is easy. But what are the chances of a new customer finding your handmade sterling silver necklaces in a sea of handmade sterling silver necklaces? When you have your own craft site, you can be very specific about how search engines find you.

Our wooden spoon maker listened to her customers and has launched a line of hand carved wooden spoon for people with arthritis. Through her own website, she can help her customers find her by optimizing her site for search engines like Google.

5. Eliminate the Competition

When your customers search Etsy, they’re visually bombarded with all kinds of crafted goodies. Your competition is right in their face.

Having your own website helps direct customers to your Etsy shop. By placing your shop’s Etsy Mini on your own website, your customers can browse your handmade crafts with one click of their mouse, without being distracted by your competitors.

A craft website doesn’t need to replace Etsy. But an Etsy crafter can have enormous success when she supports her Etsy shop with a professional looking WordPress blog.