Welcome to The Business of Crochet Blog! I am so excited to have you here!
Before I start getting into the nuts and bolts of the Crochet as a Business, I want to touch of a topic that is near and dear to my heart.
In a world that now includes the internet with all sorts of websites and blogs (not to mention torrent and pirate sites) with all sorts of links and posts to free patterns, many people out there don’t understand why designers, myself included, charge what I would call the equivalent of what a grande coffee and pastry for a morning meal at Starbucks for our patterns.
Well, to be honest, patterns, even free patterns aren’t FREE to create. So, I thought I would address this question, right off the bat while walking you through what one of my patterns costs me to create, so that you can understand this part of it. There is some math and finances involved, but I will try to keep it as easy as I can.
Even if you are designing for a magazine or a one-off pattern to be placed in a collaborative book, some of these costs will be included for those patterns as well.
I am going to use my pattern Queen of Hearts to walk you through this.
Out of Pocket Pattern Costs
First thing you must consider, is what I paid out-of-pocket to product this pattern. This cost is what I paid, out of my business operations checking account, to product the pattern.
In the case of Queen of Hearts, it was $416.32. Let’s break this out.
|Cost of yarn||$119.82|
|Tech Edit, Chart, and Schematics||$161.50|
|Layout of Pattern for both digital and print||$30.00|
Now, the yarn included a “designer discount” that the yarn dyer gave me so If I were to purchase the yarn without telling her I was a designer it would have been more.
The Tech Edit (et all) is a little higher than most of my patterns because this shawl is HUGE and needed a bit more in the way of the charts, but I have had larger bills for that piece.
I use YarnPond to find and hold testing of all my patterns. It costs $5.00 to run a test. (It’s a free platform for testers!)
I have a photographer who lives in Connecticut. I live in Washington state. So, of that total, $24 is shipping the sample to her and covering her cost to ship it back to me. The remaining $137.50 is actual costs to have the photos taken.
I have a gal who lays out all of my patterns. I paid her a few years ago to create the pattern layout so all she does usually is plug in the tech edited pattern, all the charts and schematics as well as the photos. She charges me a flat rate for each pattern. (she does have to rearrange things for each pattern so its more than just plug and play
The next thing you need to consider is the behind the scenes costs most people don’t think about when purchasing a pattern. These are the costs of things like:
- Accounting software
- Monthly fees for HP Ink
- And more
Some of these I pay monthly and some of these I pay for yearly. So what I do, is figure out my yearly costs and divide that by 12 months whichhich comes to about $160 a month I pay to run my business.
I don’t release a pattern every single month. Some times I release a book instead. Other months I don’t release at all. So I usually want my patterns to cover about 2 months of operating costs.
2 * 160.00 = $320.00
Ok so now our cost for this pattern is now up to $736.32. But remember, that those aren’t the only costs the pattern must pay for. I need to get paid too!
So I have to keep track of all the hours I put in to developing this pattern, not limited to but this does include:
- Crocheting the sample
- Writing the pattern
- Writing blog post about it
- Newsletter about the pattern to both retail and wholesale customers
- The time I work with the contractors for Tech Edit, photos, testing and layout.
- Developing social media
Sometimes there is more.
But in the case of Queen of Hearts, I put in 86 hours. If I want to pay myself $15 an hour:
$15.00 * 86 hours = $1290.00 to pay myself for the time I invested.
So now we have the following costs for the pattern.
|Out-of-Pocket + Overhead||$736.32|
|Paying myself for my time||$1290.00|
|GRAND TOTAL for PATTERN||$2026.32|
This pattern sells for $9.50. Most patterns I sell via my email list and those subscribers get 25% off. So, they actually purchase the pattern for $7.13
But also, let’s remember that do online sales so I don’t get all of that. The credit card processor gets $0.51 for the discounted pattern. ($0.77 if I sell full price)
Let’s do the math for both discounted and retail:
Selling at a discount:
$7.13- $0.51 = $6.62 is what I get for the sale.
$2026.32 / $6.62 = I need to sell 307 copies
Selling at Retail
$9.50- $0.77 = $8.73 is what I get for the sale.
$2026.32 / $8.73 = I need to sell 233 copies
In order just to break even, I need to sell somewhere between 233 and 307 copies of the pattern.
There are a lot more variables to the cost of independent patterns. For example, I also sell patterns on the Makerist and LoveCrafts Platforms. I get even less per pattern on there due to their fees and cuts. I also sell on a royalty basis on other platforms, which also cuts my final payment per pattern sold. Plus, I do also sell many patterns wholesale (40% discount off retail) But the math on that would make you crazy, so this is just a baseline.
And I didn’t even figure in the fact that I also sell the pattern in print! More costs are involved in that. This post is just about the digital pattern.
That being said, one thing to remember is that there are no guarantees that any pattern I produce will break even. In fact, I have MANY patterns that haven’t broken even to this day.
But then again, I have others that are hot sellers and more than make up for another pattern or two in my catalog.
Also remember that this happens to be one of my more time consuming and costly patterns. The pattern itself is 12 pages long for a single sized shawl. Each pattern has its own costs, and my range can be for $100 to create (not including my time/ hours) to more than what you see here.
I would LOVE to answer any questions you might have on all of this. It is a lot to grasp even though I am just giving you a baseline on it. Please comment below and let me know how I can help you wrap your head around all this.