We've nearly completed a six-month long workshop called "How to Develop and Sell Your Handcrafted Product". We've been conducting this workshop in the Golcuk Municipality for a small group of entrepreneurial women handicrafters and have covered such topics as design, branding and marketing.
During today's class, we discussed some ideas that the women could use to price their products which vary from jewelry to ceramics to patchwork. As there are no hard and fast rules for doing this, Figen and I devised our own formula with the intention of getting them thinking about how to price their own things. This is not something we want set in stone, but we did want them to have a rough framework that would guide them and give them different things to think about when setting their prices.
Among the things we presented were cost of materials, cost of labor, and enough room to build in wholesale, retail, and sale prices. We designed the lesson to be helpful, but did not anticipate how much they would struggle with this pricing task.
The places that we noticed they were getting stuck were in assigning value to their labor and designating a fair profit. Prior to this class, some of them were calculating their material costs and then considered any profit compensation for their labor. Some reported that after pricing and selling their products, they were barely breaking even. They had not been building in enough profit or assigning enough value to their labor costs to make a fair profit.
While observing them go through this exercise, it occurred to me that while on one level the cost we assign to labor is a function of such economic forces as location and market, for those of us who are self-employed assigning a value to our labor is closely linked to the value we assign to ourselves. How often I have struggled with it - essentially giving away my time for free. I have seen my colleagues struggle with it, and I watched these women struggle with it today. I also had the pleasure of watching them triumph.
At first I watched them hesitate to put a price on their labor. But ultimately, they each came up with a figure that they felt fairly compensated them for an hour of their time. When it was all said and done, they had several different prices for each of their products that they could quote for wholesale, retail, and sale. And they confidently looked at those prices and felt assured that when that product sold, they would be fairly compensated for the time and energy they put into making it.
Out of all the topics we've covered through the course of this workshop, this one stands out most in my mind as being something that was very empowering to them. Rather than arbitrarily throw out a price as they would have done in the past, they now had a logical and methodical formula to use that not only took into account their expenses but also their own value in the production of that item. I didn't realize how important this little exercise would be, but it just goes to show that the teacher learns along with the student.
I would love to hear your thoughts on this subject. Please feel free to share in the comments section, or send me an email.
Comments