Working Out What an Hour Is Worth

Most sellers price by looking at what other people charge. It is a reasonable place to start and a poor place to stay, because it tells you what a market will tolerate and nothing at all about whether the work is worth your time.

Count the hours nobody bills for

The making is the part people count. The photographing, the writing, the answering, the packing, the trip to the post office and the twenty minutes explaining postage to somebody who does not buy: that is the job too. An item that takes an hour to make can easily take three to sell and send.

Divide, then look at the number honestly

Take a month. Add up what came in. Subtract postage, packaging, fees and materials. Divide by every hour the business took, not only the pleasant ones. The result is usually lower than expected, and it is the only figure that tells you whether a price is working.

Some work pays less per hour and is still worth doing

A cheap item that brings in buyers who come back is not the same as a cheap item that brings in buyers who never return. The hourly rate on the first is misleading, because the work is doing a second job. Be honest about which yours is doing rather than assuming the flattering version.

Raise the floor before you raise everything

If one line of work pays badly and no price fixes it, the answer is usually to stop offering it rather than to charge more for it. Removing the worst hour from the week does more for the average than a small increase spread across everything.

Do the sum twice a year

Costs move quietly. Postage goes up, materials go up, and a price set against last year figures drifts into earning less than it did without anything visible having changed.