Pricing your wreath to sell is one of the most discussed topics amongst creatives! If you’re running a full time business or if you’re just selling as a “hobby” your wreath pricing formula will determine how long you’re able to afford to keep making your beautiful wreaths. Pricing your wreath to sell is a very valid question and shouldn’t be taken lightly! In this blog we will review the two main pricing techniques and you should pick which one works best for you and your business.

Wait…

Before you even look at the two pricing formulas I need you to STOP acting like a crafter and start running your business as a business. You don’t price your wreaths off of emotion or what you think you would pay for the wreath. HELLO of course you wouldn’t pay $100 for a wreath – you can make it. But, think about how many times you run out and purchase that overpriced latte’ or steak at your favorite resturant… Still struggling? Make sure your read our blog about Imposter Syndrome.

The two main wreath pricing equations are:

Formula 1: COST OF (MATERIALS) X 2  + EXPENSES + LABOR RATE = RETAIL SELL PRICE

Formula 2: COST OF MATERIALS X 3 = RETAIL SELL PRICE

What makes up the elements of your wreath pricing formula:

In both calculations for pricing your wreaths it is extremely important to know your Materials and Expenses. Materials and Expenses refer to the total cost that it takes to produce your final wreath.

Your material expenses need to include EVERYTHING that it took to complete the final look of your wreath including, but not limited too: the frame, mesh, sign, greenery, floral picks, ribbon, embellishments, hot glue, pipe cleaners, wooden sticks, steel picks, sticky tabs etc.

Business Expenses are just as important! Ya’ll if you’re running a business, you should price it as a business so start making a list of your expenses and make sure you price accordingly! Depending on where you decide to sell your wreaths you will have a different list of expenses. Some examples of your expenses include: classes, overhead, seller fees, shipping boxes, shipping supplies, gas, website fees, etc.

You’re labor rate is also important, no one should run a business and not pay themselves. The time that you take away from your family, your own life, and give to your business is worth something. Your labor rate can be a flat fee that you tack onto every wreath or it can be a percentage fee that you add to every wreath that you make.

How to sell wreaths and make a profit

Now that you know the terms lets discuss the two wreath pricing methods to sell for a profit:

 

Wreath Pricing Formula 1: COST OF (MATERIALS) X 2 + Expenses + LABOR RATE = RETAIL SELL PRICE is well known and widley used amongst creative business owners that have been in business for a while – even if I don’t personally use it.

 

The way the wreath pricing Formula 1 works:

 

Step 1 – Materials and multiply by 2:

Add up the total RETAIL price of all of your materials that were used in the wreath. (I personally don’t like to use the sale price if I got the item at a discount, because what if I get a second order and the supplies are no longer on sale?

For this example, lets say we spent $25 on supplies to make your wreath.  We now need to take the $25 x 2 to get our Materials + Mark Up rate of $50

Step 2 – Add Expenses:

Add up the total expenses related to the wreath. This can be hard for beginner wreath makers because it is hard to get a grasp on what your total expenses will be if you’re joining classes, starting a new website, etc. Don’t forget the boxes, labels, box inserts, and tape!

For this example lets say our total expenses are averaged out to $9.50

So, now we are at $50.00 in material/mark up + $9.50 in expenses = $59.50

Step 3 – Add your Labor Rate:

The labor rate can be a flat percentage or a flat rate. The normal percentage rates for labor is 20-25% of the total cost of expenses + materials. For this example let’s use a 20% rate.

To calculate the labor rate for our example we would take the total from step 2 and mulitply it by .2 to get the labor rate and then we would add it back onto the total in step 2. (Or you can just take step 2 x 1.2 to get the new total).  $59.50 x .2 = $11.90 (labor rate)

So now we have $59.50 + $11.90 = $71.40 as the price to sell our wreath that cost $25 in supplies to make.

Making a profit selling wreaths

Formula 2: Damon’s Preferred Pricing Method- Materials x 3 = Retail Price

 

How to price your wreath  Formula 2 works by:

 

Step 1 – Materials and multiply by 3:

Add up the total RETAIL price of all of your materials that were used in the wreath. (I personally don’t like to use the sale price if I got the item at a discount, because what if I get a second order and the supplies are no longer on sale?

For this example, lets say we spent $25 on supplies to make your wreath.  We now need to take the $25 x 3 to get our $75 wreath price.

So, we would list our wreath for $75.  Now, if we go back and review the final price for Formula 1 we came out with $71.40 vs $75 in formula 2. For me the simplified method gives me a close enough result as the more complicated step by step method – so why would I waste time to go through multiple steps to get almost the same result?

Wreath making with a paycheck

When using this method I do a few simple calculations on the back end to divy up the total sale of the wreath.

  • 34% of the sale goes back into my supply bucket (buy future supplies with)
  • 20% of the sale goes into my labor bucket (what I get to pay myself)
  • 23% of the sale goes into my expenses bucket (sellers fees, shipping expenses, etc)
  • 23% of the sale goes into my business investment bucket (new tools, future education, etc)

So in our Formula 2 example, when the wreath sells I would take the $75 and allocate the funds like this:

  • $75 x 34% = $25.50 to go back into the supply fund.
  • $75 x 20% = $15.00 goes into payroll
  • $75 x 23% = $17.25 goes into my expenses fund
  • $75 x 23% = $17.25 goes into my business investment fund

 

In conclusion a wreath that costs you $25 to make should retail for a minimum price of $75 by using Damon’s Preferred formula. The $75 wreath sale would give you a $15.00 check for your labor and allow you to put $17.25 back into your business.

Damon’s Guide To A Profitable Wreath Sale

Before you gawk at the thought of your neighboor paying $75 for your wreath consider selling other places where you know customers show up to spend money on high end quality products. Etsy is a great place to start selling online where buyers are waiting to purchase. In my Business Coaching class I help craftpreneurs start and grow their online wreath business so that they don’t have to worry about only selling to their neighbors. Still not convinced? Read this blog: Imposter Syndrome.

Share your favorite wreath pricing tips with us over at the How To Make Wreaths Facebook Group. We’d love to hear your ideas or feedback! If you need more help pricing your wreaths we have a full detailed lesson all about pricing in our Business Coaching Group.

If you are interested in more info on learning how to sell wreaths, how to make wreaths, where to buy supplies, and being in a community of like-minded crafters, check out our Creative Coaching Subscription Group.

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