What makes this cost that much?

One of the biggest challenges for most designers starting out it pricing their products properly. I have struggled with this since day one. While I work to get the Fall 2010 line ready, I decided to sit down and really, I mean REALLY look at the numbers, look at how much money it really costs to make a handbag and how much I have to charge to turn a profit. For me its a tough job. I like cutting, sewing and creating, staring at numbers it not something I get excited about. But I knew I had to do it and I feel much better and more confident in my product now that I have.

Here are a few things that I factored into the cost of each piece.
• Labour - you MUST pay yourself. This includes all the time you put into your business. Shopping for supplies, doing research, blogging, it all should be included.
• Studio expenses - even if you work from home, you are still paying for that space in one way or another. You must also include things like internet, phone and what ever else you use to run your business.
• Cost of materials - everything and anything that goes into your product costs something, it has to be included.
• Shipping cost- even if shipping is extra when someone buys your product. you have to include price of packaging and the the time it takes you to wrap and send the item.
• Website fees- how much does it cost to run your site? you have to include that.
• PR- how much time do you spend getting the word out there for your product, do you pay a PR firm?

These are just a few of the costs that you have to include. I'm sure it varies from business to business.
As for cha cha, I can now say I feel completely comfortable with my pricing. Gone are the days of feeling guilty that someone might think my handbags cost to much. If they think they cost to much, they won't buy them. I know what they are worth and I want to stay in business!!