Hi all,
Apologies for the delay in posting this - between Christmas rushes and holidays, it's been difficult to find the time to get all the information together and post it up!
Ok. Having covered products, packaging and lots more, we're now going to tackle the money side of things. Mainly - how to price your products to see wholesale to shops or at retail prices to family and friends, tax issues and setting yourself up officially. I'm going to approach it in a Q and A fashion, starting with tax!
TAX Questions
A common question from crafters setting up their own business to sell their crafts is:
Q: Do I need to register for VAT? Do I need to charge VAT to my customers?
(A caveat for this answer - this is not intended as strict tax advice - please consult with a professional tax advisor for official recommendations!).
The answer is: Unless you have an annual turnover greater than €70,000, you do not need to register for VAT. This means you do not need to charge your customers VAT, and you do not need to make quarterly VAT payments to the government. Here's exactly what www.revenue.ie have to say about it:
In the case of supplies in the State and intra-Community acquisitions, registration (for VAT) is obligatory where certain turnover thresholds are exceeded or are likely to be exceeded in any twelve month period.
(e) €51,000 for persons supplying goods (increased to €70,000 as from 1st January 2007)
In the case where you are exceeding that threshold, you need to register either as a sole trader or limited company, and start collecting VAT for the government. If you do register, it means a lot more paperwork, but also you can claim VAT back that was charged to you by any Irish suppliers, and also on other things such as postage costs.
If you are not registered for VAT, you do not need to charge any customers or shops that you are selling your crafts to VAT. Do not worry that they will think you are not "official" - it is never one company's responsiblity to look after the tax affairs of another, so shops simply don't mind or care what way you are set up as long as you're professional!
€€€€ Pricing Your Cards and Crafts
Q: How should I price my cards? What kind of pricing do I need to sell direct to shops?
Pricing your cards and crafts is one of the most common questions we see cropping up on our crafter's forum. A recent poll on our forum of 25 crafters selling cards both to shops and family and friends direct revealed the following:
- The majority of standard sized cards (C6, DL and Square) are selling for a retail price of €4.00 on average. This means they are selling in shops at this price, or are being sold directly to family and friends at this price.
- Retail prices vary across the country, tending to be lower in countryside areas, and higher in cities. A card that retails for €5.00 may retail in the midlands for €3.50, for example.
- Larger cards such as C5/A5 size, tend to sell for higher prices - more than €5 and often up to €7 and even €10 each. Some people also charge more for square and DL, though most don't (and shouldn't really - the perceived value to the customer is the same).
- Packs of 3,4 and 5 cards tend to sell for lower prices, as do Christmas cards - when people are buying in bulk and less likely to pay a high price for each card.
Wholesale pricing
Wholesale pricing for selling directly to shops can vary wildly. Some shops will take a card and mark it up 20%, others 200%. As a general rule, shops take a wholesale price and add 100% plus 21% VAT to it to get their selling price. So a card you sell to the shop at €2.00, they will sell on for €4.84 (or more likely 4.95 or similar).
A quick guide to pricing Wedding Invitations
As a very quick and rough guide, the absolute lowest you should be charging for a very simple, very small, very plain handmade day invitation we think would be about €2.50. But, we would expect that a normal handmade day invitation would be more likely to cost in the region of €5.00. Evening invitations tend to be about 60% of the cost, place cards less, mass booklets can be more as they require a lot of work to print. We highly recommend that before deciding your prices for your stationery, you check out your nearest competitors to see what their pricing is like. Make sure you don't undersell yourself - by far the most common problem. Crafters rarely have lots of confidence in their work and are unlikely to overprice!!
Other General Tips
- Try not to underprice yourself!!! Most of our crafters do and have no confidence in their work. Does someone want to buy one of your cards? That's because they're GOOD - not because they are doing you a favour. It's a business transaction and you are providing them with a product SO much better than what they can get in the garage or shops.
- Research the shops you want to sell into. See what they're charging now for cards so you can get a feel for acceptable pricing.
- Ask friends and family what they think your cards are worth. Believe them when they tell you.
- Always have a special offer to encourage people to buy more. €4 for one card, 3 for €10.
If you have more questions, please post them here!! Or have a look at our forum for more posts about the topic. Above all have confidence in what you're doing. Judge yourself by what people say about your cards and whether they want to buy them...and take it from there. You're doing great already :)
Michael's - the crafter's superstore of superstores, and I have to say, this time round I was very much uninspired. Although I could NOT resist the amazing rolls of 6m of edged satin ribbon for 25c each!!! Maybe it's that our craft store has expanded to include nearly all product groups now, but the style of the products in the store was all very middle of the road. Nothing as bold or striking as KI Memories, Autumn Leaves or the new Cherry Arte we have coming in soon. Hardly any clear stamps (I've a yen for these lately), and the wooden ones left a lot to be desired. Tons of stickers and LOADS of K&Company. Having been there I'm going to look into more Scrapbooking Kits and Paper Stacks and pads - what do you think? Something you'd like to see in our crafts store??
Paper Source - and had a similar experience, though I can't say they don't stock bold ranges - they do. I think our shop has just matured to the point where I rarely see anything new. Maybe at the Craft, Hobby and Stitch wholesale show this month in Birmingham (I believe they have a non-trade version of the show?)! 
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