Pricing 3 Approaches to Formulating Prices
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Worksheet: How to Price Like a Pro
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Instructions
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You're awesome for being this commited to your ArtFire Shop. This worksheet is meant to help you play around with pricing. There is no right answer here, so use this template to enter different numbers, learn, play around and improve. In particular, we recommend playing around with "# of items produced per year," "total material cost," "total hours spent" and your "hourly rate" to see how those factors affect your bottom line.
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1) CREATE YOUR OWN WORKING DOCUMENT
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To get started, hit File > Make a Copy, choose a name, click Okay and you'll have a version just for you. Fields highlighted in gray will calculate themselves.
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2) CHOOSE AN ITEM AND DETERMINE YOUR INPUTS3) CALCULATE THE ITEM PRICE
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Choose one product and ask yourself the following questions:Selected item: Hand stamped silver necklaceItem name
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Materials: What supplies do you use and how much do they cost?Materials
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Things to think about in this section:SupplyCost
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leather$28.24
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- What materials do you use?wood$0.00
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- If you buy material in bulk and use it for multiple items, what's the cost per item?Material 3$0.00
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- If you're a vintage or supplies seller, what was the cost of the original item?Material 4$0.00
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- What's the cost of shipping materials?Material 5Cost of material 5
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- Did you pay to ship any of the materials?Total material cost$28.24
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Overhead: What are your business expenses aside from wage and supplies?Overhead
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Things to think about in this section:Overhead itemCost
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Overhead item 1Cost of item per year
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- Do you have to replace tools a certain number of times per year?Overhead item 2Cost of item per year
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- Does your machinery require maintenance or cleaning?Overhead item 3Cost of item per year
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- Have you purchased business cards?Overhead item 4Cost of item per year
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- Do you pay someone to help you?Overhead item 5Cost of item per year
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- Do you spend money on marketing or advertising?Yearly overhead cost$0.00
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- Do you rent studio or office space?/ # of items produced per year1
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- Do you have fees to pay (such as for ArtFire or Paypal)?Overhead cost per item$0.00
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Labor: What are the tasks required to produce an item? How long do they take?Labor
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Things to think about in this section:TaskHours
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build1
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- Does it take time to purchase or design the materials?Task 20
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- How long does it take to source, create or clean?Task 30
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- Do you add a second round of finishing touches?Task 40
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- Will you have to go to the post office to ship?Task 50
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- What were you making at your last job per hour? How have you progressed?Total minutes spent1
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- What would be a fair wage?/ Minutes per hour60
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- What's the going wage for the type of work you're doing? Total hours spent1
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x Your hourly rate$1.00
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Total labor cost$1.00
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Price: What's the right price?Prices
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Things to think about in this section:Total costs = Break even price$29.24
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- What's the added value to your item? If you choose your own profit margin:
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- How many sales do you expect this year? How many would you like to make in a year?
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- Do you need to change your making process to spend less per item?Profit margin (%)0
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- Where is your business? Are you happy breaking even? Are you aiming for wholesale?x Break even price$29.24
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Profit$0.00
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+ Break even price$29.24
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Price with profit margin$29.24
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If you want to sell wholesale, best practice is to multiply by 2 at each stage:
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Break even price$29.24
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x 22
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Wholesale price$58.48
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Wholesale price$58.48
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x 22
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Retail price$0.00
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