Sunday, July 26, 2015

The True Cost of a Knit (or Crochet) Hat

"You MADE that?  It is amazing!  You should totally sell that!  You'd make a lot of money!"

Every crafter hears it.  Non-crafters (sometimes referred to as "muggles" on knitting forums) say this as a complement, not realizing that it would be very hard to make a living wage by selling knit and crochet items. I thought it would be an interesting exercise to go back through some of my projects and consider what I could sell them for if I was paid at least minimum wage for my labor.

Simple Crochet Newborn Hat - Materials + Minimum Wage Labor = $10.75
Let's take a look at the hat I created in my "Let's crochet a baby hat" video.  I was able to complete this newborn sized simple crochet hat in an hour.  The yarn (Bernat Cottontots Ombre) is now discontinued, but let's say that it was $5 for a ball of yarn.  I used 35% of the yarn (by weight), which would be $1.75 worth of yarn.

Now let's think about the labor.  I think that many people who open Etsy shops selling completed knit or crochet items consider the cost of the yarn, but not the cost of their time.  If I were going to be paid a skilled labor wage of $15-20 an hour, this simple crochet hat suddenly would cost at least $16.75!  Minimum wage in Massachusetts is $9/hour, putting the cost of this hat to $10.75.  What would the market say to this?  I might be able to sell this hat for $10, but there are people on etsy selling newborn crochet hats for as low as $2!

3 month old Hat - Low cost estimate $30.
Fun animal crochet hats like this Panda run between $15-25 on etsy and are normally made out of acrylic yarn.  I used 1.06 skeins combined of KnitPicks Wool of the Andes ($2.69/ball) for a material cost of $2.85.  I can finish a hat like in an evening (I didn't keep track of how long it took), but I'll estimate it took between 3-5 hours to finish the 3 month size hat.  At $9/hour, the labor would be between $27 and $45!

Now if the cost of materials is under $3, and would be even cheaper if acrylic were used, you can see how someone might sell the hat for $15, a price that is competitive for what you can find in a retail store.  This works fine if you're considering everything above materials to be a profit and  you make your inventory in your spare time.  But what happens once you start getting custom orders and you start crocheting to fill them?  Suddenly you are working 3-5 hours per hat to only get $12.  There is NO WAY someone can make a living off of that.  (If you are running an etsy store on the side and are happy with your profits, I am honestly happy for you!  I just know that this situation would start to strip the joy away from me.) 

1 year old Foxy Hat - Materials = $6.93.  Minimum wage labor ~$45
Next let's consider a more complicated hat.  The Foxy Hat is knit out of a nice yarn (Cascade 220 Superwash) which I paid $11/skein.  I used .53 skeins (in combined weight), bringing the yarn cost to $5.83. The buttons cost $1.10 for all three for a total material cost of $6.93.  (Wow, I was actually expecting the material cost to be higher on this one.)  I didn't keep track of the hours it took me to make this hat, but I worked on it during naptime and evenings for just over a week.  Let's underestimate the labor time and say it took me 5 hours to complete this hat.  With $9/hour minimum wage, suddenly the labor for this hat is $45!  Would you pay over $50 for a toddler's hat?

I find it sad that some muggles expect that handmade items should cost less than similar items found in retail stores.  The reason you don't find crochet animal hats in stores is that they are too labor intensive to make that no one would pay enough for the retailer to make a profit.  (Currently there isn't an option for machine crocheting.)  When I'm talking about material costs in this article, I'm only considering EXACTLY the amount of yarn used for each project.  I'm also not considering the price of needles or hooks or that sometimes there is not enough remnant yarn to make another project.

10 hour Afghan - Minimum $240.
Finally, I'm going to look at a yarn intensive project with very little labor, my 10 hour afghan.  I know that this blanket took under 10 hours to make (I kept a time log after all), but for the sake of this article I'm going to calculate the labor ($9/hour) to be $90.  I used 32 balls of Lion Brand Wool Ease Yarn, a low-mid range costing yarn.  Yes that's right, 32 balls of yarn at $4.69/ball.  This is $150.02 for the materials alone.  In order to value my labor at minimum wage, I would have to charge at least $240 for this simple, garter stitch afghan.  This is an afghan that is particularly fast to complete, many of my other afghans take dozens of hours to complete with similar amounts of yarn. Can you believe that some people sell hand knit/crochet afghans on etsy for $50-65?

If I were to start calculating the time for some of my handknit lace shawls, the labor alone would be hundreds of dollars.

If you're considering buying hand knit or hand crocheted items, please consider the value of the craft behind it. I'm not saying that you shouldn't purchase a hat priced cheaply on Ravelry, but don't scoff at the items that are priced higher.  Handmade does not equal cheap, and you shouldn't expect to find something hand crafted at the same cost as a machine knit item in a store.

Personally, I'd much rather enjoy my hobby and give away the items to people that I love. If I've ever given you a finished knit or crochet object, please know I don't think I'm giving you a $500 gift.  I'm giving you something made with hours of love where I thought about how much you mean to me as I crafted it.  If I like you, it is worth my time to create something for you!  I just know that I would never be able to make a living knitting because the market does not put a reasonable price on the labor.

7 comments:

  1. Thank you so much for posting this. After years of hearing that I should sell my knitting, I finally looked into what it would cost to open and run a shop on Etsy. Not only is there the high probability that I wouldn't turn a profit, there's also the very real possibility that I'd *lose* money. No thank you!

    I completely agree with what you wrote in your last paragraph: "Personally, I'd much rather enjoy my hobby and give away the items to people that I love."

    - Audra from A Path to Create, Not Find

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    1. When Lucky is wearing hats I've made him I always get a ton of compliments and people wishing they could buy them. When I started calculating how much I'd have to make and sell to make even $1000/month (not even close to a living wage), it made my head spin.

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  2. Thank you so much for posting this. I recently had some say I was asking to much for a King size afghan. $300. The yarn alone in it? $250. hours??? OMG 250 hours. It was honestly made with so much love though. That in itself is priceless

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  3. Look into the Etsy sellers. Many are not made in the US and places where labor is cheap. We cannot compete with that. I wont knit to sell, but if some one wants to pay $500 for a uniqe baby blanket i would do it. Lol

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    1. Oh I understand completely. I do know some US crocheters who have their own etsy shops, really detailed crochet hats for $15-20 with no cost difference for an adult hat! I know they're thinking about anything beyond yarn as profit and that this is a hobby, so it is worth it to them.

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  4. Look into the Etsy sellers. Many are not made in the US and places where labor is cheap. We cannot compete with that. I wont knit to sell, but if some one wants to pay $500 for a uniqe baby blanket i would do it. Lol

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  5. I agree totally and have been explaining this to people for years. I make my items with love as gifts for family & friends.

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