I'm by no means an expert, but I love sharing what I've been learning on my journey of running a small handmade business. Recently I've been thinking a lot about how to make more profit and earn a little bit more money. You can catch up on part 1 here where I explored the impact of increasing the retail price of handmade products.
Part Two - Use higher quality materials
Depending on what products you make, it's likely that a large part of the cost of the finished item will be the time it took you to make. It might only have cost you a couple of pounds to buy the paper/wool/beads, but if it took you a while to make up the finished item (and you want to pay yourself a decent wage) it probably costs much more for your time.
For example, you might buy £5 of colourful beads and then spend 2 hours stitching them together into a beautiful necklace. If you want to pay yourself £10 an hour you've spent four times as much on your wages compared to the cost of the beads.
You could try speeding up the making process, looking for ways to be more efficient, but at the end of the day handmade items are made by hand and this will always take time.
To make more money from selling your handmade items you might have thought about spending less money on materials, but have you ever considered spending more? You can sell the same product at a much higher price point if you use more expensive, luxury materials, yet it takes the same amount of time to make.
Back to that beaded necklace example. What if you were to make a very similar necklace that still takes 2 hours to make, but this time you use more expensive beads. Perhaps you might add some swarovski crystals, or sterling silver elements. Let's say you spend four times as much on the beads, so that they now cost £20, but the necklace is worth a lot more so you could double the retail price.
Obviously this is over-simplified, but spending more money on the materials could actually help you to earn a better wage for the time you spend making.
It's a bit counter-intuitive, but imagine you wanted to buy a knitted blanket. How much would you be prepared to pay for a lovely handmade blanket made from cheap yarn? And how much would you pay for a similar blanket knitted from pure wool? Knitted blankets might take hours to knit. Made from cheap yarn it's just not that special, but made from pure wool it can reach a very high price point. Using higher quality materials may make it easier to charge a decent wage for your labour time.
Next week I'll finish the series by considering how you might make more money by paying other people to do things you could have done yourself, so make sure you pop back for part three.