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What Should I Charge For Labour Costs In My Handmade Biz?

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Blogs for creatives who are looking to turn their handmade hobby into a productive and successful handmade business.

What Should I Charge For Labour Costs In My Handmade Biz?

Kerri Tutton

handmade-biz-planner-what-should-i-charge-for-labour-costs-in-my-handmade-biz 

This is a SUPER DOOPER question and one that challenges many of us creatives.  

Firstly though, the fact that you have asked this question is fabulous so give yourself a pat on the back, as it means that you are thinking about your business product pricing seriously and you are not giving away your handmade products as a labour of love. (which is also fine btw - if you are running a hobby not a business).

So where to start?

For those of you that already have a job and your goal is to replace the day job, you may choose to use your current hourly rate to start with.  For those not earning what they want to earn, you may jump to calculating the hourly rate from a salary that takes your fancy.

Some of you may feel a bit awky about choosing an hourly rate, so your option is to add on a profit amount - go careful with this though as some of your handmade creations may take longer to make than others, you do want to have some consistency with your pricing to encourage your customers to trust they are getting a fair price.

Another option is to research what it would cost your business if you were to take on a staff member. Especially if you have a longterm goal to grow, you may need to consider at some stage paying an hourly rate, GST or VAT and Superannuation contributions perhaps.

Which ever way you choose to select your rate, the most important part now is to ensure you are incorporating the charges for the time you spend creating your product into your 'Cost Price'.  

Now for some of you, you may have lots of different techniques that you may need to consider.  As a jewellery maker I would often find that the time I spent on a new technique/design would often shorten the more I practiced, so be sure to re-asses the timing of your labour, to ensure you are charging correctly.

Then when you feel that you are more experience, you may decide to increase your rate (you are after all the boss now, so don't forget to give yourself a pay rise).

Once you have established your business and you want to move to the next phase, it would even be worth your while to consider other labour costs to your business such as time spent on:

  • Packaging
  • Quality Assurance Testing
  • Taking Product Photographs 
  • Listing Products
  • Delivering Products to the Post Office
  • Financials
  • Procurement of Business Materials
  • Conference and Meetings

Remember your day job, there is someone being paid to do all of the above, don't think for a minute that just because you are running a handmade business that you don't qualify to charge for it as well, just remember, who would you be paying if you had a staff member to do your job!

That's right - make sure you pay yourself and know your worth.


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