Pricing your handmade wreaths is hard at first. Are you asking too much or too little? Here’s a guide to help you come up with wreath prices and show you how to properly price your homemade wreaths so you can make a profit.
Hey, y’all! Today, I’m covering a topic that I get a LOT of questions about: how to price homemade wreaths to sell.
If you have wondered this same question, you are definitely not alone!
Coming up with wreath prices is one of the most discussed topics amongst creatives.
It doesn’t matter whether you are running a full time business or selling your wreaths as a side hustle. Your wreath pricing formula will determine how long you’re able to afford to keep making your beautiful wreaths.
Y’all know I love making wreaths, but I also need to make a profit in order to support my business and my employees.
So over time, I’ve learned a couple of surefire ways to price my homemade wreaths so I can make a profit and keep the lights on for my business.
An Important Note For Craftpreneurs
Before you even think about pricing formulas, I need you to STOP acting like a crafter and start running your business as a business.
You cannot price your wreaths based on emotion or what you think you would pay for the wreath. HELLO…of course, you wouldn’t pay $100 for a wreath because you can make one yourself!
But, think about how many times you run out and purchases that overpriced latte or steak at your favorite restaurant. If you provide a product that people want and it saves them time and effort, they will pay for it.
Still struggling with pricing your wreath at a fair market value? Make sure you read our post about Imposter Syndrome!
Aspects To Consider When Determining Wreath Prices For Homemade Wreaths
Before I jump into the formulas I use, I think it’s important to cover some of the formulas’ aspects. That way, you know what I’m talking about when I go over the pricing formulas!
In both calculations for pricing your wreaths, it is essential to know your materials and expenses. Factoring in both material costs and other expenses gives you 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.
Here is a partial list to show you what I mean:
- The frame
- Floral picks
- Hot glue
- Pipe cleaners
- Wooden sticks
- Steel picks
- Sticky tabs
Business expenses are just as important as materials, y’all! 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 each homemade wreath accordingly!
Your list of business expenses can vary greatly depending on where you sell your wreaths.
Here’s a partial list of business expenses to factor into your wreath pricing:
- Seller fees
- Shipping boxes
- Shipping supplies
- Website fees
Your labor rate is also important because no one should run a business and not pay themselves. The time you take away from your family and your own life to 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.
Pricing Formulas For Homemade Wreaths
I’m sharing with you the two main pricing techniques that I have developed to ensure I’m making a profit on my wreaths. I encourage you to use the one that works best for you and your business.
Formula 1: COST OF (MATERIALS) X 2 + EXPENSES + LABOR RATE = RETAIL SELL PRICE
Formula 2: COST OF MATERIALS X 3 = RETAIL SELL PRICE
How To Price Wreaths: Formula 1
COST OF (MATERIALS) X 2 + Expenses + LABOR RATE = RETAIL SELL PRICE
This formal is well known and widely used amongst creative business owners that have been in business for a while, although I don’t personally use it.
Step 1: Cost Of Materials Times Two
Add up the total RETAIL price of all of your materials that were used in the wreath.
Note: 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, let’s 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. It’s hard to grasp 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, let’s say our total expenses average out to $9.50. 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 percentage or a flat rate. The normal percentage rate for labor is 20-25% of the total cost of expenses + materials. For this example, let’s use a 20% rate.
To calculate our example’s labor rate, we would take the total from step 2 and multiply it by 0.2 to get the labor rate. Then, we would add it back onto the total in step 2 (or you can take step 2 x 1.2 to get the new total).
Here’s the math: $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 costs $25 in supplies to make.
Determining Wreath Prices: Formula 2 (Damon’s Preferred Method)
COST OF MATERIALS X 3 = RETAIL SELL PRICE
This is my preferred method for pricing homemade wreaths because it’s just easier.
Step 1: Cost Of Materials Times Three
Add up the total RETAIL price of all of your materials that were used in the wreath. Do not include any discounts you may have received on the materials.
For this example, let’s 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. If we go back and review the final price for Formula 1, we came out with $71.40 vs $75 in formula 2.
The simplified method gives me a close enough result compared to the more complicated step-by-step method – so why would I waste time going through multiple steps to get almost the same result?
How To Properly Allocate Funds From Wreath Sales
When using this method to determine wreath prices, I do a few simple calculations on the back end to divvy up the wreath’s total sale.
- Supply Bucket = 34% goes toward buying future supplies.
- Labor Bucket = 20% of the sale goes toward what I get to pay myself.
- Expenses Bucket = 23% of the sale goes toward sellers fees, shipping expenses, etc.
- Business Investment Bucket = 23% goes toward new tools, future education, etc.
So, in our Formula 2 example, I would take the $75 from the wreath sale and allocate the funds like this:
- 34% x $75 = $25.50 to dedicate to supplies.
- 20% x $75 = $15.00 goes to payroll.
- 23% x $75 = $17.25 goes into my expenses fund.
- 23% z $75 = $17.25 goes to investing in my business.
In conclusion, homemade wreaths that cost 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.
Where To Sell Homemade Wreaths For Profit
Before you gawk at the thought of your neighbor paying $75 for your homemade wreaths, consider selling in other places where you know customers show up to spend money on high-end quality products.
Final Thoughts On Wreath Prices
I hope this post about wreath prices helped you get over the fear of selling homemade wreaths in a way that actually allows you to keep doing what you love!
IF you have any questions, please leave them in the comments below or on our How To Make Wreaths Facebook Group.
More Business Resources
Share your favorite wreath pricing tips with us over at the How To Make Wreaths Facebook Group. 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.