It's either something you have, or you don't. So the world says. But can we just talk about this subject for a minute? I mean, it does kinda make the world work. We get it daily when we go to work, and 'spend' it just as quick when we start our car. I wonder how many of us actually think like this? I mean, let's face it, we spend money everywhere, even when there is no physical money exchanged. When we start our car, it burns gas, which we have invested in when we filled up the gas tank last; we 'spend' money when we wear the clothing that we have invested in when we purchased it. Oddly enough, this 'spending' has a term called depreciation; it simply means to loose value over time. But to the type of spending we normally think of; when we pay the cashier or machine at the store $20 for the Super Cute! top we just bought, or the Really Pretty! earrings and necklace we just ordered off a website. Money is something that is as fluid as water, and used, by some, just as cautiously.
I know for me, I search for the lowest price I can find. I HATE spending money, ask my husband if you don't believe me. When I need new clothes, I dread going shopping, simply because I don't want to pay the price for the clothes that I like, and that fit. So when I can, I coupon. I coupon for food, clothes, etc.; I shop clearance racks, sale bins, on and on I could go. Why? Because to me, it's not worth the price.
Now, let me tell you why.
Take any big box store, and I would say that almost, if not all, the clothes and accessories, food, etc. that they offer are made in a warehouse by automated machines. This means that cost by comparison (I'll get there in a minute...) is low. They can make multiple shirt, shorts, cookies, etc. in a matter of minutes. It's called Mass Production for a reason. The only costs they have to factor in are the few workers, the cost of occasional repair, materials (which they get at a lower cost) and a small overhead, and maybe a few other things. However, this cost is manageable because of the mass production.
Now, take someone at a farmer's market selling accessories. These are handmade items. You look at the price tag and see that a scarf, for example, is $20. You wrinkle your nose and say "i'm not paying that for just a scarf!" Well, why not? You would be willing to go to Ross, again-for example, and pay $15 for a scarf of the same type. Why the difference? I'll tell you why: your mind set. You don't understand why it costs so much more to get items at a Farmer's Market than it does at a big box store. Well, let me help you with this understanding.
For a home business, such as those venders you see at a farmer's market, there is a lot more that goes into pricing a product than just cost of goods. I'm going to break it down in an example as follows:
A solid Wood clock.
Size: 12" Diameter, 1" thick
Type of Wood: Red Ceadar
Cost to make: $9
Price Break down:
Pay for person making clock: $7.25/hour
Hours Spent on making clock: 16
Price for wood: Varies (for this example, $5)
Price for clock parts: $9
Sales Tax: Varies (for this example, 7%)
So now that we have all of the information, lets do some math:
A)7.25x16=116 (Wage x hrs spent making)
B)116x.07=8.12 (Pay x Sales tax @ 7%)
C)116+8.12=124.12 (Pay + Sales Tax)
D) 124.12+5=129.12 (Pay+Tax+ Wood cost)
E) 129.12+9= 138.12 (Pay+Tax+ Wood Cost+ Clock Parts)
Now, this breakdown doesn't include the cost of any of the tools that are needed to make, and finish, this clock, which include, but are not limited to:
*drill bit of the right size
All of the cost of these items would be minimal when broken down into several items, but the initial cost is still there. And there are many other costs that have to be taken into account, not just the cost of making a single product. Websites, marketing, payment processing, business cards, etc....they all cost money. They all have to be paid for somehow.
And the wage per hour can be different for everyone, just as it would be in the corporate world. And just as skilled workers are paid more than non-skilled workers (or, SHOULD be) people that make products that take highly trained skills to make will make more.
So, next time you are at a market, craft show, or personally owned small business (or looking around my site :) ) please, take into consideration this blog post. I am not trying to cheat you out of your hard earned money, like big box stores sometimes do, I am simply trying to pay for the bills I have, and still make a living in the process. My business is my job, don't I deserve to get paid too?
Thanks for sticking with me.
I am the owner and designer of and for Unique You Creations.