You have a hobby, whatever it is for the sake of argument we’ll call it needle felting but in all honesty it can be anything, and you want to go from hobby needle felting to earning an income from needle felting.
You’re products are beautiful, friends, family and even random visitors to your home compliment your wonder works of art, maybe some have even asked if they can buy one or two off you. Perhaps you said yes and then freaked when they asked how much because you didn’t have an answer. It could even be they wanted your favourite piece for five pounds but you know the amount of felt that went into making that piece was more like ten and thats even without the hours labouring over it.
As with any piece there is a value attached, this value is based upon how much you want to be paid an hour for your efforts and how much it has cost you to actually make the item.
Now as a hobbyist you can probably afford to sell that ten pound decoration for 5 pounds, but you want to run a business so it’s time to get serious. Sorry about that.
Ideally you need to make products for many price points, you also need to know who your target market is and how much this market would truly want to pay. It’s time to start asking questions.
Avoid family for this, with the exception of those who are brutally honest and I mean so honest it is practically a personality flaw. Complete strangers will tell you the truth for the simple reason they don’t know you and really don’t have to care about hurting your feelings.
From how much people are prepared to pay you can either
1. Find a way to make items at that price similar to what you showed you target market, remembering to include both your time and your profit in that price.
2. Partially ignore the target market and charge how much the item actually cost you to make plus the profit you want.
3. Make numerous products from the larger more expensive and more intricate to the smaller and less detailed versions.
The story of a product
There is a trick to commanding a higher price. This trick is not to spend more hours working on the product, or adding even more fine details. No instead it’s adding a story to the piece.
Here’s an example, out of the two which would you prefer to buy
A needle felted fox, which took two hours to make
A needle felted fox, Inspired by a mother fox who gave birth to her six cubs in our back garden, this fox represents both her strength and her protective nature as she quickly huddled them into a makeshift den under the shed.
Having said that don’t create a lie about the origin of the piece, but equally being so brutally honest and simply saying I was bored and just felted until this happened won’t really help your sell it.
The horrible maths bit. I say horrible but I actually don’t mind it and if you’re spreadsheet savvy you can always get the computer to figure it all out.
Lets say the needle felted fox took you two hours to make, we bought a £20 bag of wool and can make four products out of this. We also want to get at least the minimum wage of £6.50 an hour.
Labour costs = How much you want to be paid per hour x How many hours it took to make
£13 = 6.50 x 2
Supply cost = Cost of materials / amount of products which can be made
£5 = 20 / 4
Total cost to make the product = Labour costs + supply costs
£18 = 5 + 13
Then you need to add on the profit, at this stage it’s worthwhile doing two, one for wholesale and the other for retail. It’s unto you how much profit you want to make from the product. But for the sake of argument lets say you want 20% profit for wholesale and 35% for retail.
Wholesale profit at 20%
Cost of product / 100 x percentage profit = amount to be added
18/100 x 20 = £3.60 needs to be added to the cost of making the product
This would mean at the wholesale price the product would cost £21.60
Retail profit at 35%
cost of product / 100 x percentage profit = amount to be added
18 / 100 x 35 = £6.30
So the retail cost of the product would be £24.30
Presentation also helps increase a price point too, the more professional the display the more likely your customers will be thinking your product is a quality item, think in both terms of packaging, do you have a fancy box you can have the item hoping out of, will it have some padding and if so is it bubble wrap or tissue paper.
Even the way you showcase the price will also say a lot about the quality of your piece and your business.
Every aspect of this product, it’s packaging and story have to consider your brand. If your brand is earthy in nature a brownish cardboard box with shredded cardboard would be effective to display your products.
If you brand is more homely a box with a bow and filled with tissue paper or a padded cushion will be the better option.
The pricing labels have to match this brand too, as does your signage, even the outfit you wear has to incorporate the brand and it’s personality to truly start making your mark as a professional over a hobby.
Often at craft fairs there is a mix of the hobbyist who is selling items so they can make more because they enjoy making them and there are others who are there because they want to start a business. It is the branding which sets these businesses apart.
It doesn’t even have to be a craft fair, it can be a market, a stall at an event or even some shelves within another companies shop.
Perhaps you are selling online through the likes of Easy, Folksy or even your very own website, again these need to be branded in a way that means it is clear this is the same company you saw at this or that place. I know that Easy allows you to change your header image and your profile picture, and you can do the same on Folksy.
Equally you can host your own site, and have even more features without the need to redirect people to another website where they can quite easily find a rival who is possibly cheaper.
It is also worthwhile investing in some form of social media which links to your shop, website your contact details. Social media is also a good way to connect with people and help spread your brand and your products through shares. It takes hard work and determination to do this but when it works it can be worth the effort.
Your key thing to remember when turning your hobby into a business is you need to charge for the hours you put into your work and your business also needs profit in order to grow.
If you need or want an illustrative element to your logo it defiantly worthwhile hiring a professional to do this for the simple purposes of ensuring the image can be scaled up or down without any loss of detail or quality, equally a professional will also know how this visual element can work with the rest of your logo concept and how the target market will perceive your logo design.
Over time your brand will develop even more and you may have to take on the additional help of a graphic designer to help your brand reflect this through all of the available ways in which your customers can interact with your brand.
Your designer will or should know exactly how to capture the attention of your potential customer base. They will be able to advise you on marketing opportunities which will hopefully pave the way for you to go forward and grow into an even more profitable business.