Reassessing Your Pricing Strategy for the New Year

Ah, the New Year—a time for fresh starts, new goals, and (let’s be real) a lot of to-do lists that may or may not get completed. But there’s one item that should definitely be on your list as a handmade or creative business owner: reassessing your pricing strategy.

Let’s face it: pricing is hard. It’s one of those things that can leave even the most confident business owners feeling uncertain. Do you charge too much? Too little? Are you undervaluing your creativity? Are you pricing based on your competitors—or just guessing? It’s time to give your pricing strategy a full audit and set yourself up for success in the year ahead.

Here’s the thing: your prices are a reflection of your worth—and we’re not talking about your self-worth (though that’s important too). We’re talking about the value of your work in the marketplace, and the reality is that you deserve to be compensated fairly for your creativity, time, and talent. So let’s dive into how you can reassess your pricing strategy for the new year and feel confident that you’re charging what you’re worth.

1. Take Stock of What’s Changed

Before you even think about adjusting your prices, it’s essential to take a step back and evaluate your business as a whole. The start of a new year is a great time to reflect on what’s changed in your creative business. Have you:

• Improved your skills or offerings? Maybe you’ve taken new classes, honed your craft, or added new services. These upgrades should be reflected in your pricing.
• Seen increased demand? If your products or services are flying off the shelves or getting booked up faster, it’s a sign that you might be underpricing.
• Had changes in production costs? If materials, shipping, or overhead have gone up, your pricing needs to reflect those increases to maintain profitability.
• Expanded your customer base? New demographics or larger audiences may mean it’s time to adjust your pricing to match their expectations and purchasing power.

Taking stock of these changes will help you understand whether your current pricing strategy still aligns with where your business is today or if it’s time for a refresh.

2. Consider Your Costs—Don’t Just Guess!

If you’re pricing based on a vague “gut feeling,” it’s time to get more precise. Your prices should never be based on guesswork—they should be grounded in your actual costs, the time you spend on production, and the profit margin you want to achieve.

Here’s a quick checklist to help you reassess:

• Cost of materials: How much do your raw materials cost (including shipping, if applicable)?
• Time spent creating: How many hours do you spend making each item or providing each service? Don’t forget to account for your time on things like packaging and shipping too.
• Overhead: This includes rent (if you have a studio), utilities, website hosting, software subscriptions, or anything else that’s a recurring business expense.
• Labor costs: If you’re outsourcing work (e.g., assistants, printers, or any third-party labor), this should be factored into your pricing.

Once you have a clear understanding of your costs, it’s time to decide on your markup. A common approach is to aim for a markup of 50-100%, depending on your industry.

However, the goal should be to price in a way that covers your costs and generates a reasonable profit.

3. Account for Your Time and Expertise

One of the hardest things for creative business owners to accept is that their time is valuable. You’re not just charging for the physical materials; you’re also charging for your skill, experience, and expertise.

Here’s a reality check: how much is your time worth? If it takes you four hours to make a product, that’s four hours you could be spending on something else (e.g., growing your business, spending time with family, or just relaxing).

Factor in your time when calculating prices, and make sure you’re paid appropriately for your craftsmanship.

A simple way to calculate this is to set an hourly wage for yourself. Maybe your hourly rate is $25, $50, or even more, depending on the type of work you do. Multiply that rate by the number of hours it takes to complete a product, and make sure that gets baked into your price.

4. Analyze Your Competition—But Don’t Copy Them

As tempting as it might be to peek at what others in your niche are charging, copying their prices is a recipe for disaster. You might think, “Well, if my competitor is charging $20 for this necklace, I should too.” But here’s the thing: you are not your competitor. You bring something unique to the table—whether it’s your design style, your quality, or the story behind your work.

That said, it’s still important to research your competition to understand the market. Compare products that are similar in materials, craftsmanship, and appeal. If your product is superior in quality, your price should reflect that. 

Similarly, if your competitor has a larger customer base and more brand recognition, that might justify a lower price point in the beginning, but don’t undervalue your work just to compete.

5. Know Your Customer—and Price Accordingly

Who is buying your products, and what are they willing to pay for them? Understanding your Perfect Customer is key to setting prices that will attract and retain the right customers.

For example, if your target customers are budget-conscious senior citizens looking for inexpensive gifts, your pricing should reflect that. On the other hand, if you’re targeting affluent professionals who are willing to invest in high-quality, unique items, you can price higher and justify it with the quality, craftsmanship, and exclusivity you offer.

Understanding your customer’s budget, buying behavior, and willingness to pay is crucial in finding a price point that makes sense for both you and your audience.

6. Test Your Prices—But Be Consistent

One of the most effective ways to gauge whether your pricing is working is to test different price points. You can do this through limited-time sales, offering discounts for larger orders, or even introducing tiered pricing for different product options. This allows you to experiment with price elasticity—how sensitive your customers are to price changes.

But here’s the catch: consistency is key. If you constantly fluctuate your prices, customers may get confused or think they’re being taken advantage of. Instead, if you’re testing new prices, make sure to track how those changes affect sales over time and adjust accordingly.

Reassessing Your Pricing Strategy for the New Year

The start of a new year is the perfect opportunity to reassess and refine your pricing strategy. Take the time to analyze your costs, evaluate your time and expertise, and consider your competition and customer base. Set prices that reflect both the value of your work and the positioning of your brand.

At the end of the day, pricing is about confidence. If you believe your work is worth a certain price, your customers will too. So step into the New Year with a pricing strategy that reflects your creativity, expertise, and the true value you bring to the table. 

After all, in the world of handmade, you’re not just selling products—you’re selling a piece of yourself.

Now, go and own those prices! Your art—and your time—are worth it.