Post by rockjunquie on Jul 3, 2014 15:26:23 GMT -5
The following are compiled from quotes in another thread. Some people thought it would be good to make a sticky for this information. Feel free to adds your thoughts.
My thoughts on pricing, price formulas and the handmade market:
Scott @shotgunner adds more about pricing:
And, 1dave adds:
Consider your material:
Consider your time:
Consider Your Venue (overhead):
@shotgunner adds:
Consider Perceived Value:
When discussing a wrap for 25.00--
And unclestu says:
dbrealityrocks has more to say about it, too.
So, yes, after a lot of discussion, it boiled down to the above points. You need to realistically figure all of your costs to be able to come up with a price that is both reasonable and profitable.
My thoughts on pricing, price formulas and the handmade market:
I think most (pricing) formulas would be great IF everyone used one. I have a problem with people who don't value their work and charge so little that it keeps everyone's prices down. I'm not talking about cheap manufactured competition, rather the housewife type who just needs a hobby and not a profit. We know they are out there.
Yes, it makes me angry. And not for the reasons you think. It makes me mad because it devalues handmade and turns it into a slave market. I have always thought that a job worth doing, is worth doing well. AND, I have always thought that I should be paid for a job well done. I may not always mark up my supplies a lot, but I sure as hell will not give my labor and experience away. I have found over the years that charging more has always been better for me. Perceived value and all that. If something doesn't sell, I raise the price and by golly nearly all the time it will sell soon after. I simply will not work for nothing. If I can't pay myself, then I don't want to do this, because I value my time. I find ways to keep my expenses down. I buy very, very well and I watch the market to buy my silver low. I am able to make a little on supplies (and more on my rocks) and I factor in my hourly rate which is not nothing. If everyone doing handmade valued their efforts enough to charge realistically for it, then we would all make more money. Sorry for the rant, but I see so many people doing wonderful work that I would pay well for, yet they charge next to nothing for it. I have, on more than one occasion, reached out to tell a person how wonderful their work is and how valuable it is.
It is very difficult, I know, to try to be objective enough to price our things. What we sometimes think of as nothing, someone else sees as something. I have made things that I didn't like and was ready to take apart when a friend or family member would say- just put it out there and see if someone else will like it. Against my better judgement I have and the piece will always sell to someone who fell in love with it. You just never know. What we might see as not very valuable, someone else might pay good money for. Be the artists you are and people will recognize that and pay for it.
Yes, it makes me angry. And not for the reasons you think. It makes me mad because it devalues handmade and turns it into a slave market. I have always thought that a job worth doing, is worth doing well. AND, I have always thought that I should be paid for a job well done. I may not always mark up my supplies a lot, but I sure as hell will not give my labor and experience away. I have found over the years that charging more has always been better for me. Perceived value and all that. If something doesn't sell, I raise the price and by golly nearly all the time it will sell soon after. I simply will not work for nothing. If I can't pay myself, then I don't want to do this, because I value my time. I find ways to keep my expenses down. I buy very, very well and I watch the market to buy my silver low. I am able to make a little on supplies (and more on my rocks) and I factor in my hourly rate which is not nothing. If everyone doing handmade valued their efforts enough to charge realistically for it, then we would all make more money. Sorry for the rant, but I see so many people doing wonderful work that I would pay well for, yet they charge next to nothing for it. I have, on more than one occasion, reached out to tell a person how wonderful their work is and how valuable it is.
It is very difficult, I know, to try to be objective enough to price our things. What we sometimes think of as nothing, someone else sees as something. I have made things that I didn't like and was ready to take apart when a friend or family member would say- just put it out there and see if someone else will like it. Against my better judgement I have and the piece will always sell to someone who fell in love with it. You just never know. What we might see as not very valuable, someone else might pay good money for. Be the artists you are and people will recognize that and pay for it.
Scott @shotgunner adds more about pricing:
Cost of silver (include scrap and discards) -
Cost of stone slab -
Time spent with stone, slabbing & cabbing (be careful here, set and cleanup is included) -
Time spent wrapping -
Now look at those numbers and decide what you want to make per hour.
Then add 25% for overhead. Show costs, expendables costs, machine wear and tear.....
Then add some profit.
Where are you now?
Cost of stone slab -
Time spent with stone, slabbing & cabbing (be careful here, set and cleanup is included) -
Time spent wrapping -
Now look at those numbers and decide what you want to make per hour.
Then add 25% for overhead. Show costs, expendables costs, machine wear and tear.....
Then add some profit.
Where are you now?
And, 1dave adds:
You have to at least "keystone" (double your costs) or starve!
Consider your material:
Drummond Island Rocks says ... I figure $10-12 in wire for my solid sterling wraps. I know a bunch of these are tumbled preforms so maybe value the stones at lets say $5 each. So if the wire costs $10 and the stone was worth $5 that leaves $10 for labor. If your using plated or filled wire then my numbers are off but same concept.
Consider your time:
from my blog post Your Labor Day
Labor Day. In America, we celebrate our own labor on the first Monday in September. But, like a lot of holidays in our society, it has turned into more an excuse for a big sale than for a time for reflection. This Labor Day, I'm putting some thought into my labor and sharing it with you.
In my business, the business of making and selling jewelry, people use many different formulas to come up with a price for their work. The key ingredient is always labor. How much time did you spend working on it? Rather than talk about the price of a piece or the wage we charge for ourselves, let's talk about how much labor really goes into what we do. Whether we are selling jewelry, or making for friends and family or just for the pleasure of it, it is still good to know what is actually going into our handcrafted treasures.
I have begun to get into the habit of taking ALL my working time into account. I used to under report my time, but not anymore. That would be like working off the clock.
I'll use me as an example and look at what goes into a piece. I mostly make pendants with cabochons. For ease, let's say I found a really great stone on eBay and got a great deal at 15.00. Really? Ooops! I mean 20.00 with shipping. Let's say it took me about a half hour (pretty conservative time, actually) to find it and watch the bidding to the close. So, my project just started off with a half hour labor.
My example stone came in the mail and I looked it over. I decided that I wanted to work on it right away because it really inspired me. I sit with it and sketch ideas and percolate for about 30 minutes. I haven't touched any wire, yet, but the project is at 1 hour already.
Before I do any actual work, I set up my area for the project at hand (a very simple wrap). I have calculated my approximate wire needs in the last step and now I prepare my wires. I usually straighten, clean and twist them all. I'll call this step 15 minutes. (1 hour 15 minutes total.)
Now on to the wrap. Like I said this is a pretty simple wrap and it goes off without a hitch. I'll say this took 45 minutes. Most people would think of this stage as the only stage to count for labor. But, I'm really not finished by a long shot. (2 hours total.)
I take the piece and file a few ends, test a few things and make a couple of simple adjustments before I toss it into the tumbler. I won't count the tumbling time. But, this small step does add about 10 minutes to the project.(2 hours 10 minutes total)
While the piece is tumbling, I clean up and get set up for the next piece. I usually put everything away before I start a fresh project. I'll call this 5 minutes. (2 hours 15 minutes total.)
When I am done tumbling, I pull the piece out and clean it with a brush and dish soap to get any residue off before I give it a patina, which I almost always do. So, I prepare the LOS and set the piece in fresh, hot tap water before adding the LOS. In a matter of seconds, I am rinsing the piece and drying it. This is a relatively quick process, say 10 minutes. (2 hours 25 minutes total.)
Next, I need to take steel wool and brass brush to the piece, wash it off again and then polish it. 15 more minutes. (2 hours 40 minutes total time.)
Finished? Nope! Now I need pictures because I sell online. This can be a long process, but for the example, let's say a series of 10 good editable pictures takes me about 20 minutes. Add to that the post work of 10 minutes for a total of 30 minutes. It could be a little more or less but this a pretty good number. (3 hours 10 minutes total.)
For selling, let's say I did a little research and spent some time writing a good description and uploading the pictures. I think a simple piece would be about 10 minutes. Now the total is up to 3 hours 20 minutes.
You could add anything you left out or deduct some time if you think it was unreasonable (say you were interrupted during the wrapping phase for 5 minutes).
You should also add a small amount of time to compensate for maintenance you routinely do. Say, you recondition your pliers every month or so, or change your tumbler water or whatever. Consider, the time that you spend sourcing and buying materials, too. You can't just add that to the piece you finished directly after ordering. You have to break that down over lots of pieces. I'll add 10 minutes to pieces to cover all the in between stuff, which when you think about all the miscellaneous little things that you do they actually add up to a lot time.
I left out the time it takes me getting things ready to mail because I call that the cost of doing business. But, you can certainly add that in.
The value of your labor in any given piece is the amount of actual time you worked multiplied by your hourly rate. My number for this simple project is 3 hours 30 minutes.
I used to say that I could finish a piece in under an hour. After really thinking about it, I realized that I was working off the clock for about two and a half hours! I sure wouldn't do that in a 9-5 job and I certainly shouldn't do it to myself.
Labor Day. In America, we celebrate our own labor on the first Monday in September. But, like a lot of holidays in our society, it has turned into more an excuse for a big sale than for a time for reflection. This Labor Day, I'm putting some thought into my labor and sharing it with you.
In my business, the business of making and selling jewelry, people use many different formulas to come up with a price for their work. The key ingredient is always labor. How much time did you spend working on it? Rather than talk about the price of a piece or the wage we charge for ourselves, let's talk about how much labor really goes into what we do. Whether we are selling jewelry, or making for friends and family or just for the pleasure of it, it is still good to know what is actually going into our handcrafted treasures.
I have begun to get into the habit of taking ALL my working time into account. I used to under report my time, but not anymore. That would be like working off the clock.
I'll use me as an example and look at what goes into a piece. I mostly make pendants with cabochons. For ease, let's say I found a really great stone on eBay and got a great deal at 15.00. Really? Ooops! I mean 20.00 with shipping. Let's say it took me about a half hour (pretty conservative time, actually) to find it and watch the bidding to the close. So, my project just started off with a half hour labor.
My example stone came in the mail and I looked it over. I decided that I wanted to work on it right away because it really inspired me. I sit with it and sketch ideas and percolate for about 30 minutes. I haven't touched any wire, yet, but the project is at 1 hour already.
Before I do any actual work, I set up my area for the project at hand (a very simple wrap). I have calculated my approximate wire needs in the last step and now I prepare my wires. I usually straighten, clean and twist them all. I'll call this step 15 minutes. (1 hour 15 minutes total.)
Now on to the wrap. Like I said this is a pretty simple wrap and it goes off without a hitch. I'll say this took 45 minutes. Most people would think of this stage as the only stage to count for labor. But, I'm really not finished by a long shot. (2 hours total.)
I take the piece and file a few ends, test a few things and make a couple of simple adjustments before I toss it into the tumbler. I won't count the tumbling time. But, this small step does add about 10 minutes to the project.(2 hours 10 minutes total)
While the piece is tumbling, I clean up and get set up for the next piece. I usually put everything away before I start a fresh project. I'll call this 5 minutes. (2 hours 15 minutes total.)
When I am done tumbling, I pull the piece out and clean it with a brush and dish soap to get any residue off before I give it a patina, which I almost always do. So, I prepare the LOS and set the piece in fresh, hot tap water before adding the LOS. In a matter of seconds, I am rinsing the piece and drying it. This is a relatively quick process, say 10 minutes. (2 hours 25 minutes total.)
Next, I need to take steel wool and brass brush to the piece, wash it off again and then polish it. 15 more minutes. (2 hours 40 minutes total time.)
Finished? Nope! Now I need pictures because I sell online. This can be a long process, but for the example, let's say a series of 10 good editable pictures takes me about 20 minutes. Add to that the post work of 10 minutes for a total of 30 minutes. It could be a little more or less but this a pretty good number. (3 hours 10 minutes total.)
For selling, let's say I did a little research and spent some time writing a good description and uploading the pictures. I think a simple piece would be about 10 minutes. Now the total is up to 3 hours 20 minutes.
You could add anything you left out or deduct some time if you think it was unreasonable (say you were interrupted during the wrapping phase for 5 minutes).
You should also add a small amount of time to compensate for maintenance you routinely do. Say, you recondition your pliers every month or so, or change your tumbler water or whatever. Consider, the time that you spend sourcing and buying materials, too. You can't just add that to the piece you finished directly after ordering. You have to break that down over lots of pieces. I'll add 10 minutes to pieces to cover all the in between stuff, which when you think about all the miscellaneous little things that you do they actually add up to a lot time.
I left out the time it takes me getting things ready to mail because I call that the cost of doing business. But, you can certainly add that in.
The value of your labor in any given piece is the amount of actual time you worked multiplied by your hourly rate. My number for this simple project is 3 hours 30 minutes.
I used to say that I could finish a piece in under an hour. After really thinking about it, I realized that I was working off the clock for about two and a half hours! I sure wouldn't do that in a 9-5 job and I certainly shouldn't do it to myself.
Consider Your Venue (overhead):
If you go to a show and sell ... cheap, you will make a lot of other wrappers really angry. Have you every been to a show and seen what those people are asking for their work? It ain't cheap. ... Don't under cut yourself and bring everyone else's prices down. There are places and ways to sell that cheap, if that's what you want to do, but (depending on the show) a show isn't the place for those prices.
Not trying to pile on. Just another thing to consider.
How much does it cost do go to this show? Travel expenses and booth space cost money.
How many of those have to be sold to just pay the booth rental? How many more have to be sold to cover the cost of making those that have sold?
This describes how many you must sell at this show, just to not lose money.
=========================================
As an illustration.
My wife once did a "yard sale". It was the weekend after July 4th. She put out a bunch of crap we had laying around. Dishes, toys, clothes, shoes... salvation army stuff she wanted the money for instead.
She marked them all for like $0.10 or $0.25 ea.
I woke up late that day, and went out to see what she was doing. I saw the price tags and about feinted. I counted her entire inventory value. She had $13.00 worth of junk. I asked her what she sold already and said $3.65. Speechless, I went inside.
She spent 6 hours in 110F heat to sell about $9 worth of junk. She was happy as hell!!
I never pointed out that she spent 6 hours in the heat to make two cups of starbucks. Plus, she still had to go to the goodwill store and donate the unsold cr@p.
Read more: forum.rocktumblinghobby.com/thread/66228/show#ixzz36RD9WFgv
How much does it cost do go to this show? Travel expenses and booth space cost money.
How many of those have to be sold to just pay the booth rental? How many more have to be sold to cover the cost of making those that have sold?
This describes how many you must sell at this show, just to not lose money.
=========================================
As an illustration.
My wife once did a "yard sale". It was the weekend after July 4th. She put out a bunch of crap we had laying around. Dishes, toys, clothes, shoes... salvation army stuff she wanted the money for instead.
She marked them all for like $0.10 or $0.25 ea.
I woke up late that day, and went out to see what she was doing. I saw the price tags and about feinted. I counted her entire inventory value. She had $13.00 worth of junk. I asked her what she sold already and said $3.65. Speechless, I went inside.
She spent 6 hours in 110F heat to sell about $9 worth of junk. She was happy as hell!!
I never pointed out that she spent 6 hours in the heat to make two cups of starbucks. Plus, she still had to go to the goodwill store and donate the unsold cr@p.
Read more: forum.rocktumblinghobby.com/thread/66228/show#ixzz36RD9WFgv
Consider Perceived Value:
When discussing a wrap for 25.00--
In all honesty, I think 25 is SO cheap that it would actually turn people off. They will wonder why it is so cheap. There is a thing called perceived value. That is the value that people place on things, not the actual value. I would say that your pieces have a higher perceived value than 25.00.
I know you are new to this. As a newbie, you can't, realistically, charge top dollar. But, you can definitely charge more than 25. I would pay more than that for some of the cabs alone. When I first started, I sold really cheap. What I found out was that some people were buying my pieces to take apart to use the stones themselves. You bet your a** that happens!!! Not only have I seen it, but I have been VERY tempted to do it myself.
I know you are new to this. As a newbie, you can't, realistically, charge top dollar. But, you can definitely charge more than 25. I would pay more than that for some of the cabs alone. When I first started, I sold really cheap. What I found out was that some people were buying my pieces to take apart to use the stones themselves. You bet your a** that happens!!! Not only have I seen it, but I have been VERY tempted to do it myself.
And unclestu says:
Don't sell yourself short. People expect to pay a premium for hand made pieces. No one would expect you to be only making $10 for a hand made piece selling for $25. When it comes to selling I have sold thousands of dollars worth of antiques and collectables on Ebay. However I have only just started selling some of my cabs. I have found that people are more than willing to pay up for good quality material and or workmanship. I purchased one slab of Pietersite for $150. It was the most expensive slab I ever purchased. It made 5 cabs. One which my wife claimed and the others all sold. The last one sold for $179 plus shipping to Holland. After the cost of shipping and customs fees the total price to the buyer was close to $300. That was just for a cab of Pietersite. The point being don't sell yourself short. Most people think jewelry has a 300% mark up anyway. Perseption is reality. If you make your presentation as if you are selling at a yard sale you will not get a good price. Perhaps display your wraps on black velvet, wear white cotton gloves when handling them. Give the impression that they are not jst any old wraps but fine pieces of art. People eat that stuff up. Give them a show for their money and you will get a better price.
dbrealityrocks has more to say about it, too.
Just wanted to say about perceived value. Time and time again when I have had pendants that don't sell I raise the price and then they do. Often times people w/out $ will think it's too much and those w/$ think it's not worth buying. I had a MT agate @ $85 for a couple of years and lots of people looked at it but didn't buy it. I raised the price to $185 and it sold. One has to show that their work is valued by themselves or else no one else will think it's worth buying. That said if you came to a show I also have copper and brass wrapped ammonites and other stones for people starting at $35 so those with less money can have something. Course I also have my walmart line @ $5-$20 on the tables.
So, yes, after a lot of discussion, it boiled down to the above points. You need to realistically figure all of your costs to be able to come up with a price that is both reasonable and profitable.
... to the New Guys from The ChatBox V.2 Crew