Advantages of a Handmade Card Business Part 5: Higher Retail Price

(card images: © Kate Harper Designs)

Most handmade Cards sell for over 2 or 3 times the price of a printed card. This has several advantages:

1. You don't have to keep your unit material costs as low as commercial cards.

In a commercial card company, with large production scales, every penny counts in printing and producing greeting cards. The profit margin may only be 15% of the wholesale price (about 11 cents per card). For a commercial company, there is not always enough breathing room to take risks or to use more expensive materials.

A commercial company may have to keep envelope prices down to one or two cents each. They do this by buying huge quantities. For a handmade card maker, this is not usually possible. Because you are buying smaller quantities, you may always have to spend 5 to 7 seven cents (if not more) per envelope.

Ultimately, this should not be an issue, since you are not trying to compete with a commercially produced card. Ideally, you have a better quality item at a higher price and you receive a higher profit margin per card. Two cents isn't going to break you, like it might the commercial company. Therefore you don't have to match their prices nor do you have to keep your unit costs as low. You have more pricing leeway to play with.

2. The store makes more profit per card.

The handmade card is an advantage for the retail store also. For each hand-crafted card that's sold, the store makes about twice the profit it would with a commercial card. If a store sells a handmade card it may get a profit of $1.50-$2.50, whereas a commercial card may only bring them .75 cents. Consider the premium of shelf space that would be taken up by a commercial card, for a mere .75 profit. Wouldn't it be better for the store owners to put a product in that same place that is not only going to be more beautiful, but bring in more profit?

You might be tempted to think that no one, including yourself, is going to buy a "high priced" greeting card, but research shows that price is the last consideration when customers purchase a greeting card. A customer is more interested in trying to convey an appropriate message to a friend or relative. If the words fit, they will buy it, regardless of the price. Haven't you purchased cards impulsively simply because it fit someone you knew?

3. The salesperson has to ring up less items for the same profit.

It takes a sales clerk longer to ring up ten items at $1.50 than five items at $3.00. Ideally, a store wants the least number of transactions for the same amount of profit.

See Other Advantages of a Handmade Card Business:

Handmade Card Business Part 1: Financial Investment

Handmade Card Business Part 2: You Change Designs Quickly

Handmade Card Business Part 3: Financial Investment

Handmade Card Business Part 4: More Designs & High Quality

Handmade Card Business Part 5: Higher Retail Price

Handmade Card Business Part 6: Homebased

Handmade Card Business Part 7: Easier for Beginners

Handmade Card Business Part 8: Card & Gift in one

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