Pricing is part art and part science, management professor Charles Toftoy told "Inc." magazine. This seems especially true for craft sales, where the items are distinctive by nature. It's fundamental that you start off knowing how much money you're investing in your enterprise, and then build a price point, taking into account where you're selling and who your competition is. Once you arrive at a workable formula, you will receive a consistent return.
Calculate your costs. This will be the total investment you make into your crafts, including materials. If you plan to sell online, on websites such as Etsy.com, include listing fees and the cost to produce high-quality photographs of your items. Costs to sell at craft fairs can be much steeper; the booth cost must be added to your table, travel to the venue, canopy, banner and possibly licenses or permits.
Determine your break-even figure. This is the minimum amount you have to make to recoup your costs. If your total costs are $5,000 to attend one craft fair and make 20 pieces of similar size and composition, your break-even amount for those items is $250 each. You can also calculate costs over several fairs. If you know you'll have to go to several events before you sell all your inventory, your event costs will rise, but your material costs will be the same if you are only trying to sell those same 20 pieces. If your total costs are $7,500 for two fairs, the break-even amount for those 20 pieces will rise to $375.
Research what the competition charges. Even if your crafts are unique, they will likely fall within a price range standard for your niche. Walk through craft fairs before you become a vendor to get a sense of prices, and browse through online listings. Although the competition will not be able to sell exactly what you've made, they may be able to sell something similar. A buyer who is attracted to several pieces but can only afford one might opt for the cheapest.
Determine an appropriate price for your items. If competition prices range from $200 to $500, consider first where your item might fall in that range. Since your break-even figure is $250, you'll want to price your items so you'll get more than this amount, and also get a cushion in case you don't sell out or to carry you over to the next event. Try to match the price of a similar vendor who has a similar quality of product.
Offer items at a range of price points. Craft-makers often supplement their main pieces with side items that appeal to every budget; if you're a painter, you can offer high-priced originals for thousands of dollars, and art cards for five. Having a low-priced alternative brings in more sales, but you'll have to sell more of them to make a profit.
Adjust your prices as necessary. What people are willing to spend will change depending on the economy and trends in taste. Keep in touch with other craft vendors to see how sales are going and if they are charging less or more depending on the feedback they receive from customers. It's a possibility that what gets you a 50 percent profit one year will get you a 10 percent return the next.
Catherine Lovering has written about business, tax, careers and pets since 2006. Lovering holds a B.A. (political science), LL.B. (law) and LL.L. (civil law).