Let's just say, you can charge what you think you can get. I'm always amazed that people charge those high prices and get them. I guess because I live in a rural area and money is hard come by. Generally speaking, I charge 3 or 4 times the cost of materials. I've long since given up the notion that I should be paid for my time. It just doesn't happen in this area.

If your scarf costs you $6 to make, charging $18 to $24 is not unreasonable.

This has always been difficult to gauge (no pun intended) but look at it this way : you have a skill and are crafting an item. If you paid $10 for the yarn, spent 8 hours creating the item and sell it for $40 - you are making a wage of $3.75 per hour and that's just crazy. Your time and talent are worth far more than that.
If you intend to make a profit and not end up regretting the day you ever decided to sell what you make, calculate your costs, even the lighting to see by, per hour, give yourself a decent wage per hour, say $10 (and in my opinion that is low) add the costs to your wage and then multiply by the # of hours it has taken you to Create that item (you do pay for the washer, and hot water for felting - correct?).
"There is someone locally selling them for $165-$300 depending on the size."
I have never hesitated to pay for a quality hand made item.

A lot of people will look at an expensive handmade item and say to themselves "I can do that".
But you know what? Most won't. And those that do will realize and appreciate the time and effort spent in creating.
My advice is to charge your costs plus wage - then market your goods in a maanner that will attract the people who appreciate your art.

Charge what you really want to get and don't undersell yourself. It's easier to go down on a price than up.
I see very pricey things in my local yarn shop that sell because alot of people turn around and say that they made it! LOL! People will pay for it. Just make sure where you sell it is a good place for it to move...a more high priced area or a shop in one that will place your goods.
good luck! We have a local gal that no longer spins her own wool she sends it out and only than does she hand dye/paint it and sells the skeins for about 25-33 a piece (cost her about 2-5 $). So don't undersell yourself!

Oh yeah....dont forget the outdoor markets (not just for fruits and stuff lately!)

I also agree with the above. We were told at a knitting class to charge three times the amount of the yarn, for the finished item, which includes your time and effort.

As Bostonpat said you should cover your expenses. If you should sell through a store there may be taxes. Unless you are trying to find something to do to fill your day, don't give it away.

Don't forget the type of customer that is positive an item is better because it cost more. Who will buy a poorly made anything because it cost more.

"Charge 3 or 4 times the cost of materials" -

What about if you use inexpensive yarn vs. more costly yarn, but the same amount of time and skill is involved?

Carol

I agree with TeriNY; charge what you think you can get. You can go to crafts fairs and see how similar items are priced. The prices of items in stores will be higher because the stores will include a markup. Knitters and crocheters will be able to guess at the quality and price of the yarn but most people who buy such items won't. I've seen novelty scarves made from cheap yarn sell for $30+. A lace or cable scarf involving more skill and time may have limited appeal and not command what it's worth, given the extra time and labor.

there was quite a bit of discussion on this forum about this earlier in the month - check this conversation

Here is a link that might be useful: knitting for profit