How to Price Your Hoops

Video transcript

If you're an aspiring hoop-shop entrepreneur, you'll need to figure out how to properly price your hoops. A basic landed-cost approach is suggested. Count the cost of your materials — tubing, rivets, snap buttons, tools, shipping, sales tax, and so on — toward your landed cost. Also consider the cost of packaging, including the shipping box and any other shipping-related costs.

Understand the cost of the transaction, too — for example, the transaction fee charged by your merchant or online platform (Etsy now charges merchant fees). Lastly, add in the cost of your labor: the hourly wage you'd pay yourself to make the hoop. If you're very experienced, your time may be worth more because of your expertise.

Pricing your hoops appropriately for resale is very important to the success of your business and to the hoop community as a whole. The most successful shops over time are not the ones with the most sales at the cheapest prices, but the ones with a sustainable business model that supports long-term growth and a profit margin that covers expenses. Consider this: a shop with lots of sales at a low profit margin versus a shop with average sales at a normal margin — which is making more money, which will be in business longer, and which benefits the community more?

If you're a solopreneur, carefully consider your time and how many hours per week you want to work. Making tons of hoops at a low profit margin requires more time, which isn't sustainable long-term and can lead to burnout. It's important to our hoop community not to undervalue a specialty handmade item that requires real skill and passion to create. Selling hoops at a significantly lower price drives down profit for all shops and devalues the art of hoopmaking. Hoopologie is committed to setting a standard in the industry by pricing our hoops at the suggested retail price — we don't undercut our customers, we never have, and we never will.