I’ve spent the last six years selling handmade jewellery on Etsy. I even grew enough of a business from it to make a basic living and began selling wholesale to boutiques. So I think I know a thing or two about pricing your creative endeavours in order to turn a profit. As a writer, beholden to all the token payments (or no payments at all) just to get my foot in the door, I can’t help but wonder what it would be like if I set the price for my writing. Everything I learnt about pricing for profit came straight out of Megan Auman’s Designing an MBA which provided me with the below formula.
labor + materials + overhead + profit = wholesale price
wholesale price x 2 (at a minimum) = retail price
Now I’d like to conduct a little experiment, applying this formula to my writing, but first, let me explain.
Labour is your hourly rate times how long it took you (that includes research, writing, editing, proofreading, etc.).
Material costs will likely be nothing, I suggest putting printer ink and paper cost into your overhead. For self-publishers include the cost of printing/producing a single book, all the other things like design and marketing cost put into overhead or calculate as labour.
Overhead includes things like internet, rent, equipment costs and other bills and expenses that keep my writing and workplace (home) running. Overhead equals the monthly cost of these things divided by billable hours.
Profit. As Megan Auman says, profit is for growth. Whatever number you choose to whack in here is an investment in your future and your writings future. This figure isn’t about making ends meet it’s about being able to pay for that workshop or go on that retreat and, rather importantly, it’s about being able to take time off now and again.
The final step of the process is doubling what you’ve got so far (your wholesale price) to get your retail price. As writers we’re mostly going to be wholesalers, selling our work to magazines, journals and publishers. However I’m going to indulge this step in my calculations below just to see what I might want to charge should I be self-publishing on a site like Amazon.
Looking at flash fiction, short stories and research articles here are some examples of the formula in action (N.B. I made conservative estimates).
These take me one hour to write but two hours to edit and I’ll set my hourly rate to $23. I’ve worked my overhead out to $3 and I’m going to set my profit to $10, just because I can.
69 + 3 + 10 = $82
82 x 2 = $164
On average short stories roughly take me four hours to write and four hours again to edit at least twice and give a final proofread so that’s 8 hours at $27/hr.
216 + 3 + 10 = $229
229 x 2 = $458
Naturally these will vary in length and research demands but let’s say it’s around 1000 words with 2 hours of research. It will probably take as long as a short story to write and edit so that’s 10 hours at $23/hr.
230 + 3 + 10 = $243
243 x 2 = $486
$200 is the going rate for both articles and short stories at Eureka Street.
Overland pays $400 for non-fiction essays and short stories submitted to their print edition.
There are a lot of variables to creating a piece of writing; length, research, market, etc., that make it unrealistic to price writing in this way, not to mention the model of the industry. However it’s useful to have a ballpark figure to aspire to. If you’re in the situation where you can set the price for your work perhaps you’d like to check out this freelance hourly rate calculator.