DHTML Menu, (c)2004 Apycom

Work from Home & Save at Home with Frugal Living

How to use Pricing Strategies to Increase Craft Sales

This report will show you how to use pricing in specific circumstances to increase your market share. The situations where prices can change include where you sell your work, the time of year, amount of competition, and the newness of your product. 

In many cases, you can use pricing to boost your sales. But the only way to really know what works is to test your prices and see what happens.

You can charge more for your work in areas where the economy is good or growing. On the other hand, if people are out of work, craft items will be an unlikely attraction. You have to go where the money is.

If your local area is financially depressed, this may mean traveling to shows in other states where jobs and disposable income are plentiful. Another solution is to place your work in shops, galleries, and craft malls in other areas around the country. You should also stay informed of trends in tourism so you can follow the money trail to states where craft sales are booming.

One way of getting a good picture of economies in states or areas you are considering selling to is by contacting your local SBA - Small Business Administration office or SBDC - Small Business Development Center.

Many offices will have on hand a copy of Small Business Profiles, an annual compilation of the latest economic and small business information for all states in the country. Click here to locate an SBDC near you, or call or write the lead center for your state.

Small Business Profiles provides an overview of each state's economy such as new firms, business dissolutions, small business income, exports, and detailed data on the economy not available elsewhere.

For example, the 1995 Small Business Profiles stated that in New Mexico, employment in the state rose 8.4 percent in the last two years. In that same time, national employment rose only 3.9 percent. New Mexico unemployment decreased 1.5 percent from the previous year. That information indicates the state is experiencing economic growth.


Position your crafts in markets where customers arrive with a set of perceived values and price expectations already in their minds. For instance, display your goods at one of the better, juried fine art/craft show. 

Customers at these shows are willing and even expect to pay more than they would for mass produced items. 

Another example is getting your work featured in galleries along side high priced items. Mail order catalogs that features quality crafts like those mentioned above are another place where customers have expectations of a higher price range. 

As you may have already found, different kinds of craft shows attract different groups of shoppers with whole different sets of preconceived notions about what they are looking for and how much they will spend.

Price your craft items at different amounts according to the market you are selling through. For instance, you would establish separate price schedules for craft show customers, stores or galleries, and catalog companies. 

Within each market, however, you should keep your prices consistent. That is, charge one store the same prices as all stores. Don't make frequent changes as it confuses customers.

Some types of crafts have seasonal sales swings. Clothing and accessories are examples. Christmas ornaments are another. If your work is susceptible to seasonal sales, look for additional items to sell at those seasons when your other sales fall off rather than marking down prices to move inventory.

Also look at markets like craft fairs or craft malls in geographical locations that might be more profitable for your seasonal work at other times of the year. For instance, during the winter, many people travel to Arizona and Florida for the season. Place your winter items in shops in these states during the cold months. During the summer months, these same winter pieces may sell in stores in the northern states.


If you make low-priced crafts, you could price all your items at the low end of average prices for craftwork in your media. You may sell more to cost-conscious buyers. This strategy is not recommended for high end crafts. 

Lowballing is much more effective with crafts priced from $5 to $50. If your craftwork sells from $5 to $50, setting a lower price for new products in a price range of $10 or less might help you build a loyal customer base before other crafters can enter the market. 

Your low prices may even discourage them from ever trying. However, if you can afford to make it and sell it at a low price, so can anyone else.

New products pricing

When a product is new to the marketplace and you have been the fortunate one to introduce it, you can help recover your initial investment quickly by setting the price artificially high. 

Demand for the item will be driven by its benefits, features, and newness. Price is not near as important in the buying decision of new products as it is with familiar ones. 

When you come out with a new item and there is little competition, pricing can be based on maximum profit. You are selling to customers who are willing to own this product because of its unique features. This makes the new product a premium.

When more crafters are making similar pieces, the customer has many choices. When this happens, competition for customers will hinge on price or service value. If the product is familiar, not new, and requires little or no education, the price of the item will be more important to your customer than the service value.

If a craft item is new and requires consumer education, than customer service will be more important than price.

If you find items like yours in abundance at other crafters’ booths, the best thing to do is to attempt to improve your work, make it stand out, or give service so that customers can clearly and effortlessly see the benefits of your product over the other crafters’ products. Another strategy would be to improve your reputation or image with brochures, tags, and other promotional packaging.

Demand pricing

If you notice over time that demand is weakening and sales are declining, it may be time to lower your prices slightly. When demand increases again, raise your prices. Continue raising prices over time until you find customer resistance or sales decreasing.

Be willing to change your prices gradually. Try a given set of prices for a couple of shows or presentations until you learn how customers respond. If there’s no resistance to the price you’re asking, you can probably raise it. 

When sales drop off and there is no other apparent reasons, return to the price you used before the last raise. You should also be periodically shopping the craft marketplace to learn what other crafters are pricing for similar work.

You may find pieces selling in stores but not at art and craft shows, and vice versa. Many items simply don’t sell in every market. But this doesn’t mean the products won’t sell elsewhere or that you should lower the price.

Making a price sound right

When placing price tags on items, even dollar figures are perceived as more elite. A discount store might tag an item at $24.95 and a gallery would price the same product at $25.00. My woven garments retail at $80, $125, $150, and $250. My large rugs sell for $500 to $800. 

When answering a customer who asks about the price, share the benefits or value of a piece before actually saying the price. The point here is not to avoid answering their question, but to explain to the customer what they will be getting before telling them what they must pay. 

Loss leader pricing for crafts

You may attract additional customers by pricing some of your pieces at cost or lower. Though you may actually lose money on a few pieces, this tactic can be used to bring in buyers for more profitable items. 

Say you advertise a packet of dried herbs and flowers for $2 a pound. These packets are displayed with your new line of handmade collector vases priced at $49, which is what you really want your customer to buy. 

Loss-leader pricing is especially effective in mail order sales when you are introducing a new product to your existing customers. In general though, mail order sales are often unprofitable unless the item you are selling is priced at least $25.

Is the price too low?

You might think an item isn’t selling because it’s overpriced. There is a tendency among new artisans to mark down their products in an attempt to help the situation. However, this usually fails to produce the desired result. 

Unless you have tried and failed to move a piece for several months at a given price, you make a mistake in lowering the price thinking it will sell better. Most new entrepreneurs believe this is true because we all grew up under the influence of mass marketing. 

The pricing concepts behind mass marketing, though, is inappropriate for the people who buy handmade crafts. If your craft products are perceived as valuable to the shopper, you will probably find they are just as willing to pay $25 for a handmade item as they would pay $20. 

I have often found that a piece sold faster by raising the price, than by lowering it. This is because of the element of perceived value. Sometimes the customer sees ‘cheap’ on a lower price tag and rejects the work as inferior.

About the Author
James Dillehay, author of seven books, is a nationally recognized expert on marketing arts and crafts. Artist, entrepreneur, and educator, his articles have helped over 15,000,000 readers of Family Circle, The Crafts Report, Better Homes & Gardens, Sunshine Artist, Ceramics Monthly, and more. James has appeared as a featured guest on HGTV's popular The Carol Duvall Show and he is a member of the advisory board to The National Craft Association. He is editor of www.Craftmarketer.com. This article is copyrighted and excerpted from James Dillehay's The Basic Guide to Pricing your Craft Book



More Craft Articles: