How Charging Peanuts for your Crocheted Items Turns the Industry into a Circus: Pricing Crocheted Items

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Harsh but true. Undervaluing your finished crochet pieces with poor pricing not only harms you, as the creator, but undermines the entire industry. I’ll go through all the reasons why below and show you why you should be mindful when pricing crocheted items.

As someone who works as a Business Consultant (by day- crochet goddess by night), I see it all the time: you want to start selling your items, and you want it to be a success instantly. Your answer: sell your products dirt cheap to get noticed.

Often, you’ll see the online myth that you should sell your products for 3 times the value of the materials it cost to make it. My experience with 100 Crocheted Rainbows made me realise why pricing your crocheted items this way should never be the case.

You have various pricing strategies open to you as a seller. Penetration pricing, loss-leading, cost-plus, value-based, skimming and competitive.

This is your short-course in Business Studies for the Crocheter!

Reasons for Buying* Crochet

*not ‘liking’ a crocheted item, but actually PAYING for it.

  • Price – its cheaper than an alternative i.e. Walmart;
  • Functionality – its been made with great materials and fits the customer’s requirements;
  • Supply bias – you’d rather buy from a local/small business than straight off a Chinese knitting machine.

The Types of Crochet Customer

Type 1: The Penny Pincher – the customer who will only buy handmade if its cheap. Will often by heard saying “Oh, but I can get this in Walmart for $XX” when you give them a quote.

Type 2: The Handmaid – the customer who will opt for handmade over mass-produced more often than not. They love supporting local and small businesses and understand the value of handmade (but their purses do have a cut-off point). These are the kinds of customers you should aim to reach with your products.

Type 3: The Occasional Splurger – the customer who will save up to buy the best of the best if they know its high quality and one-of-a-kind. They understand the true value of handmade and are okay in dropping £500 on a hand-knitted alpaca throw for their master suite.

These are my 3 main crochet customers playing in the market. So let’s address how to correctly sell to them for maximum impact.

Penetration Pricing

This pricing strategy is when you offer an initially lower price to encourage customers to your shop. You might say that the first 10 orders benefit from £10 off. This is great for products when you expect repeat sales.

Problem is, the customer who wants to place the 11th, 12th… etc. order will not benefit from this price discount and so may not purchase, and those who are, are inclined to only look at the price so they won’t be returning once the price increases. Here’s looking at you Penny Pinchers!

The benefits of Penetration Pricing work more around marketing. If you know that you’ll get more business through these people (who bought at the lower price) will spam their Instagram pages with photos of your products then it might be worth the price decrease for the increase in marketing.

The sad truth is though, that undervaluing your work even as an introductory pricing measure may lead to price-trust issues where customers are left wondering why your price was so low in the first place i.e. was it the quality, and feel that if you can offer it cheaper then, you can offer it at that price now. Think: you get what you paid for.

Price Skimming

Similar to penetration pricing: this is when you repeatedly lower the price of your item to keep interest going. It leaves customers wondering why your price can afford to go so low when it was so high before. As handmade products are not mass-produced, you only hurt yourself by continually lowering the price and have no economies of scale to account for why you can afford to lower the price.

Loss-Leading / Competitive

So you want to start selling crocheted headbands. You check Etsy and see that there are 100s of crocheted headbands for sale- so what do you do?

If you go in with a lower price you’ll get noticed, sometimes for the reasons listed above (low price = penny pinchers but risking price-trust) but this pricing strategy only sets to hurt you and other sellers.

If other sellers in market are offering a value-based price (which I will go into below) then if you undercut them, it’ll hurt them too (unless they have really loyal customers).

Okay, but I’m here to make money, who cares about the other makers? Show me the $$$$!!!

While your revenue might increase initially, what you are doing here is devaluing the handmade market. You’re saying that “Crochet is a cheaply made craft and if I can afford to give it to you at this price, so can everyone else!”

This can effectively start what is known as a ‘price war’. Can you afford to keep up with this pricing strategy if your competitors also decrease their prices? You won’t stand out anymore unless you can afford to keep undercutting.

Remember, crochet takes time and all you are doing is devaluing your own time to get a sale.

Another risk is, that once you start setting, and competing at, lower prices, your brand is perceived as ‘low cost’. You will mainly be attracting the Penny Pinching customers and this means that if you wanted to start selling at a higher price in the future, you will risk losing these customers and potentially, more sales.


This is the strategy most advocate for online: 3 times the cost of your materials. If you read the Rainbow article, you will have seen that there are a lot of other costs to consider than the surface costs such as yarn.

For me, this is the killer pricing strategy. Personally, it led me to resent crochet, and I don’t think this is an uncommon conclusion. By only charging for your materials, you devalue your own time. You are underpaying yourself to make a sale and this can lead to frustration and resentment.

I could make a HUGE amigurumi for less than £10 in yarn. Easy. Cost-plus pricing (the Facebook way) would dictate the price be £30. So I’ve effectively made £20 profit, right?

Well, if this amigurumi took me 8 hours to make, I am paying myself £2.50 an hour which is hideously under the national minimum wage (in the UK). This is excluding additional costs such as overall brand marketing. I’ve made a sale, but I could have found another way to make £2.50 every hour. This again, attracts the Penny Pinching clientele you should seek to avoid.


This is where the pot of gold is at the end of the rainbow. This is where the Handmaids and Splurgers will flock to you regardless of what you charge. They’re usually savvy on what they’re looking for and understand the types of materials and their associated costs. They know you’re a one-man-band and that they might have to wait for their custom-made items.

This pricing strategy means you understand the value (time, effort, quality) needed to undertake the work and charge accordingly. This is what every crocheter should be doing when selling their makes. Unfortunately, a lot don’t, but if you attract the right customer base, they will return time and time again for the good quality products you provide.

By correctly valuing your finished items, you can actually push up the market value of crocheted items. It makes them more of a ‘niche’ good rather than an ‘easy-come-easy-go’ throw-away item. More crocheters just need to band together to offer this.

The key thing to remember is this: you have a good product, you deserve to make a profit that does not undermine your experience and time. Not everyone has the talents that you do, which is why they are paying you for it. Charge them accordingly. The customers you want are the ones who don’t mind your fair pricing for a crocheted item.


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