Tag Archives: value

Acknowledging the worth of your creative output

In planning a business I find that it is useful to focus on that word ‘business’.   I also find that it is really hard to bring that focus when the business involves handmade products. When we make something ourselves we naturally pour a piece of our soul into the end result.  I can associate different products that I have made with different times in my life – music I was listening to, TV I was watching, emotions that were being experienced – and bringing a business lens to those products feels like I have to turn off the connection I have to the piece I have made.  When I think of business I tend to think of words like ‘practical’ and ‘hard’ and ‘serious’, which aren’t the lovely creative feelings that I have when I am designing a colour combination for a crochet project, or thinking about the design aspects of a piece of jewellery.  How to bring those two concepts together is the struggle that many artists experience.   I don’t have all the answers to this, but wanted to share some of my thoughts in the hope that they may be of use to other creative business people.

The first part of finding the connection between your creative side and your business side is to work out whether in fact you want a business.   I see so many discussions online that start with the line “I am starting a business sewing children’s clothes.  I don’t want to make money from it but I want to know about insurance and other requirements”.   The concept of running a business and not making money means that straight away the maker is having a conflict – if you don’t want to make money then it isn’t a business.   You might wonder why someone wants to make products but not make money.   Personally I don’t think that these people truly don’t want to make money from their products – I think that they don’t feel worthy.   They don’t believe that their products are as good as someone else’s and therefore feel bad charging money for what they make.  They think that because their goods are handmade, they are somehow inferior to what is sold in shops, or that people won’t want to pay for goods that aren’t sold in shops.   I think that there are a small number of artists/designers/creatives who truly don’t want money – they want appreciation and love, but they are rare, and appreciation and love does not pay the bills.

If you want to make goods and sell them to cover your costs because you get joy from making, then you aren’t really in business either – you are just selling your products to pay for your hobby.   Which is awesome!  Nothing better than selling a painting and knowing that the new set of watercolours that you have had your eye on is now within reach!  But you aren’t in business.

You know that you are in business when you make products with the purpose of selling them for profit.   Profit does not mean that you make a bag using materials that cost $5 and you sell it for $8.   Profit means that you take into account your time and expertise, all the costs involved in making products including electricity, insurance, time for research, time spent marketing, and then add on profit on top.   Profit is what allows you to earn a living from making, rather than just covering your costs.

Having worked out that you are actually in business, and that you want to make a profit, it is time to hit any feelings of unworthiness on the head.  Any time you have the thought that ‘but I can’t charge that much, it is just handmade’ you need to smack that thought out of the stratosphere, because whether something is handmade or mass produced in a factory doesn’t determine whether an item is worthy of being purchased.  If you make an item that someone else wants to buy then you are entitled to charge for your time and skills.   People buy products that they need or that appeal to them. Some people don’t understand that pricing for handmade items and will say it is too expensive – they are not your customers.   They might become your customers with a bit of education, but on the whole they are not the market you need to target.

To bridge that gap between your connection with your products and treating them like a business you need to build a bit of faith in yourself.   Once you have confidence that your products are made to a standard that you approve of, then you have to accept that they are worthy of being sold, and that selling them properly, for the right price, is just acknowledging or respect the intrinsic value in what you have made.

There are many well written articles about how to price your goods, value your talent, and promote your wares. Read them, and learn from them.   In my own experience, charging the higher price does not mean that items don’t sell.  However helping a customer feel good about spending that much money on your product by creating the story that goes with it can encourage the purchase, and help them to find the connection to the piece that you have yourself.   This is how we take the creative connection and successfully combine it with a business approach.   I recently sold a handmade tea cosy to a customer who saw a picture of it on my Facebook page and wanted to buy it, without knowing the price.   I gave her the price and then told her the story about how the wool that it is made from is grown on farms in the Southern Highlands of New South Wales, not too far from where I live, and then processed in Victoria, making it authentically Australian wool.  I explained that I had made the cosy myself, using my own design and I was particularly taken with this design and colour combination myself.   She happily purchased it, because the tea cosy was now more than a photo on a screen, but had a story about it, that included where it came from, and the love that was put into making it.   The connection between business and creativity was successful!

Creating the story about your product is what makes it different from every other product out there.   It shows that your product has qualities that other products don’t have, whether it is in your choice of materials, or the patterns you use, and that your product is made with personal care and attention, and that these are qualities that are valuable.   It is part of your marketing campaign, but also part of your process of acknowledging the worth of your creative output.

 

Ruminations on value

If you ever want to start a heated discussion between craftspeople, bring up the topic of pricing.  How to determine the value that you will charge for your chosen craft is an extremely emotive topic for many people.  There is a well thought out ‘formula’ that is suggested as the model for calculations.  A post at Ink and Spindle (just one of the many, many places you can find this discussed) explains it well (and if you read the comments following that post you will begin to see the passions that this topics can arouse.)

In simple terms, the theory is that materials plus labour (charged at an hourly rate between $10 and $20 here in Australia) provides you with your cost price.  (I note here that for many craftspeople that rate is covering their skills as a designer, maker, marketer, cleaner, material sourcer, etc.  Just sayin’.) By doubling it you arrive at your wholesale price – a price that allows you to cover your overheads like electricity, insurance, rent, machine maintenance, accountants fees, bank fees, advertising, marketing, product photography, packaging, labels, care instructions, and all those other little things that go into the production of any product.  That means that if you are able to sell your product to a retail outlet to on-sell, you aren’t selling at a loss.  (Because that would actually defeat the purpose, surely?!)  They, having their own overheads to cover, will sell it for double the price they buy it for.  And that makes this your retail price.

Which all makes sense until you start doing the calculations.  Amongst the many, many craftspeople I know, who make items to sell, I can count on one hand the number who actually apply this formula without modification.  Sometimes the modification is sensible – very low overheads for example, or absolutely no intention to wholesale, so a lower retail price that still allows for reasonable profit to put back into the business.  But often the modification is based on a statement like ‘but no one would want to pay that much for this’.  And there you have it.  A self-licking ice-cream, as a colleague of mine once put it so nicely.  Craftspeople sell for lower prices thinking that people won’t pay for higher prices, so the customers expect those lower prices to be the usual price.  Some craftspeople feel guilty charging ‘higher prices’ and will make statements like ‘but I only want to cover my costs so that I can keep making things’.  Which is all well and good if you are making things as a hobby, but is that self licking ice-cream if you are in business.

I am guilty of all of these things.  I have said, both out loud, and in my head, “I couldn’t charge that because people wouldn’t want to buy it at that price.”  I have said ‘oh but I am unknown, so I will have to have lower prices to start with’.  How ridiculous is that when you think about it – takes the same amount of time, materials and skill whether you are known or unknown.  I have improved my processes, reduced my material costs, and streamlined some practises so that my making is more efficient, which means that the gap between my ‘retail price’ under the formula and the price that I sell my products for is slowly getting smaller. (I still couldn’t ‘wholesale’ my bags and properly cover my costs at this point though.)

But I had a revelation tonight.  I was comfort browsing on a discount website that I like (sad but true) when I saw that they had handbags on sale.  I was having a look at what styles they had etc when I looked at the prices.  These bags, made in a factory in China, from synthetic materials, and on a discount site, were selling for over $200.  And no one was commenting ‘oh that is too much for a bag made in a factory out of fake leather that will peel after I use it for a while.  I don’t know the person who made it, or how long they have been making them for.’  Most consumers would look at it and said ‘I like it’ or “I don’t like it” and “I am prepared to pay that” or “I don’t want to spend that much on that bag.”  End of story.  The brands, while well known as being ‘fashionable’ are not necessarily known for having high quality.  Often you are paying for the cachet of the label, the trendiness of the design, and not the care with which it was crafted.

My question is then, why so many craftspeople, myself often included, spend so much time worrying about how much we are going to charge for an item made with skill, love, original design, integrity, and made locally and ethically?  If a customer likes our product they will buy it.  If we are worried about whether they will think it is ‘worth it’ then maybe we need to think about how we are marketing and presenting our product.  Is it a ‘handmade tea towel’ for example, or an ‘artist’s original design hand printed on eco-friendly ethically sourced cloth, that is a piece of art in it’s own right, but can also dry dishes’?  (You will note that I don’t print tea towels so am not using my own work as an example!)

I am not about to hike my prices up to over $200 for a tea towel, but I am going to remember that if I don’t value my work, why should my customers?  Ruminations indeed.