Pricing Your Cards

Here is an excerpt from the book "Get Your Greeting Cards into Stores."

Pricing Your Cards

Selling to retail stores is very different from selling to individual customers at craft fairs. Stores usually buy cards in larger quantities, and for wholesale prices.

For example, if you normally sell your cards for $4 each at craft fairs, you cannot expect a retail store to buy them for the same price. Stores need to make a profit, which requires them to double the price at which they buy them.

It may be unrealistic to expect a store to just double your $4 price and sell your cards for $8. Unless your cards are very unusual or have detachable gifts, the average consumer may not purchase a card in that price range. Therefore, it is helpful to evaluate your costs, look at your profits and manufacturing processes so you can sell your cards at a good price. You and the store both need to make money!

Even though your profit per card is smaller if you cut your price half, in the end, you will actually make more money. One store might order two hundred cards at once and then reorder quarterly. Therefore, it is better to sell large volumes of cards to several stores for a lower price rather it is to sell a few cards at a higher price to people at a craft fair.

Sometimes artists get so excited about getting their cards into stores, that they neglect to look at their costs of making a card. It is important to know early on that you will make a profit. Six months down the road, you don't want to find yourself working for ten cents an hour. It’s not fair to you, the store, or the rep if you suddenly quit the business because you are not making any money. Therefore, I think it is important to make sure all your numbers add up before you look for a rep.

Determining Materials Costs

Like any manufacturing businesses, the greeting card business has different types of costs, but the most important one is the materials costs. Materials are the physica supplies used to make your cards. Examples might be: glue, paint, cellophane bags, envelopes, and paper. As a rule of thumb, if it cannot be “touched,” and is not a part of the greeting card, it is not a materials cost. For example, a shipping label is not a materials cost because it is not part of the actual greeting card.

When determining materials costs, disassemble your finished card, and make a list of all the parts, including things like a spot of glue, an envelope, paper and ink. Determine how much each item costs per card. If your cards are printed, you might only have two costs: The card and the envelope.

It’s easy to have your heart set on one specific type of paper for your cards, but if the cost is too high, try to be flexible. Sales reps have often told me that artists have a tendency to be overly picky about things that store and customers don’t really care about, such as how thick an envelope is, or what kind of paper the card is printed on.

Profitability Formula

As a rule of thumb, I have found that if you make 20 to 25 percent profit on each card, then you are doing great!

Use these guidelines below to evaluate your costs. If they do not match, look at where you can make adjustments by either using less expensive materials or changing the design.

These percentages are based on wholesale prices. For example, if I sell my cards to a store for $1.50 each, my goal is to make a profit of at least 20 percent (or 30 cents) on each card.

Aim for the following, as if it were a round pie with separate segments. If you want to sell your card at a different price, just substitute your number in place of the $1.50 and do the math.

• 15 to 35 percent of the 1.50 is for materials costs mentioned above (22-52 cents).
• 10 to 20 percent of the 1.50 is for labor of making the card. (15-30 cents).
• 10 to 20 percent of the 1.50 is set aside for overhead costs (15-30 cents).
• 20 percent or more of the 1.50 is your profit (30 cents).
• 20 percent of the 1.50 is for a sales representative (30 cents).

If you can only ask one question, ask this one: “If I sold as many cards as I wanted, will I make enough money to be happy?”

Alternatively, you can break this down into the following:
- After expenses are deducted, how much profit do I make per card?
- How much money am I making per hour?
- If sales doubled next month and I need to pay someone to help me, can I afford it?

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This Article is an excerpt from the book: Get Your Greeting Cards into Stores: How to find and work with Greeting Card Sales Reps

If you already make your own greeting cards, this book explains how to get your cards into stores and sell them sell nationwide. Included are guidelines on: how to price your cards for a profit, how to get professional feedback, where to find a sales representative and and what industry standards you should follow. All the information is also applicable to gift items, such as magnets, journals, calendars, collectibles, etc.

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