After some thought recently, we decided to change our prices on hats a little bit. Some went up, some went down.. and we're also introducing some lower priced hats to keep options for you open.
We put much thought into just how long it takes to make our hats... some of our hats take 5+ hours... and we were selling them for only $22??? Does the math add up on that?
So our Frog hat, Racoon Hat and Thomas hats all take the longest amount of time to make (4-6 hours).
If we charge $22.....
We then pay $2 in fees for Etsy and Paypal (22-2= $20.00)
Then cost of supplies... say we get them on sale - $5 ($15.00)
Then there's the overage in shipping that we don't charge you, the customer -$3 ($12.00)
Then there's administrative overhead, such as business cards, domain costs, shipping supplies, hang tags, etc ... estimate that to $2/hat... could be higher, but we're being conservative there ($10.00)
Then it takes us 4-6 hours to complete... so that's about $2/hr. Would you work for $2/hr?
And this breakdown doesn't factor in the time it takes for us to photograph, edit, list, promote our items... or factor in the giveaways we do on Facebook.
We've now up'd our most time consuming hats to $28, mid-range hats are $24, and we're introducing $18 hats. Most $28 hats take us 2 evenings to make (if we're uninterrupted by children, and other commitments), mid range we can complete in an uninterrupted evening, and $18 hats we can complete 2 in an evening.
I know that $28 for a hat seems like a lot, but when you factor in our expenses, our time.... (and the fact that we are now only making slightly better than $3/hr) we don't make much. Its because we've raised some of our prices, that we are introducing the lower priced hats that we can make quicker. It gives you the buyer, options on how much you would like to spend.
If we were to raise our prices higher than $28, we know we wouldn't sell any hats, and so we do have to stay competitive in order to sell anything at all. I hope you all can appreciate how much work goes into our hats, and we are glad we have such wonderful customers.