Below are some tips and useful tools collected from all over the craft sphere. I know they helped me and I hope they will help you too.
Arriving at reasonable price
Now, this may seem like a taunting exercise, but it is in fact a simple mathematical equation.
Item cost = cost of supplies + (hours x your hourly wage) + selling fees
cost of supplies – this is self explanatory, but you have to remember to consider all materials you used to create this piece.
hours – this not only includes the time you spent working on a piece, but also procuring supplies, taking and editing photos and posting items on the Internet.
hourly wage – this vary depending on your country of origin and how much you would like to earn. I think it is not a bad idea to start with 1,5 x minimum hourly wage of your country and then adjust according to the price your competitors use.
selling fees – this are costs of etsy or artfire postings + postage supplies
Item value/price = item cost + profit margin
profit margin – how much you would like to earn on this piece. How valuable you think it is. Some people suggest you should triple the item cost or charge as much as the market will bear (i.e. as much as people are willing to pay) but I think it is a much better practice to add the value you think is appropriate. I find it better to charge the lowest price I can bear. But don't undersell yourself. Charge what you think your creativity and skill is worth.
To make sure that your price isn't completely unreasonable, compare it with your competitors' prices. To identify your competitors, check other crafters in your category. And remember, mainstream manufacturers are not your competition. You create one-of-a-kind pieces of art and they make uniform items. Their price will often be lower but it should not concern you, because you create in a different category.
Too high, too low
Now that you checked competition, consider revising your price. While doing so, remember that too high prices may discourage your shoppers (especially, if you cater to students and young people) but too low prices will almost certainly cause suspicion. Customers will often overlook low priced items assuming that the quality is also low.
It is a good idea to have a wide range of prices so that each of your prospective customers can choose something affordable. At the same time you will give them a chance to try your products out, before they are ready to spend the big bucks.
And btw., the great photo on top of the page was taken by DCvision2006