The Sticky Topic of Pricing

Started by ♥♥Tan♥♥, May 25, 2010, 06:17:41 PM

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♥♥Tan♥♥

Pricing can be a difficult issue, both in terms of working out what to charge and charging what your work is really worth. Everybodies perceptions are different on these topics, there is no right or wrong, but this is the place to talk about it.

Please remember your words can be read by many so post accordingly.

Who would like to kick us off with a good pricing formula?

julieHB

I would like to remind old and tell new members of Emma Ralph's article on pricing - it's on her webbie, and contains a lot of useful info: http://www.ejrbeads.co.uk/pricingjewellery.htm
Julie xx

                           My Webbie - My Flickr

Sulis (Hazel)

Hazel x

Billie

Quote from: Sulis on May 25, 2010, 07:23:27 PM
That's an excellent article  :)

And one I've referred to many a time  ;D

nemeton

I was going to post that too but Julie beat me to it  ;D
I have relied on Emma's price advice through thick and thin - it's not easy, but it works!

I don't really have a rigid formula but it is along the lines of: add up cost of materials, charge for time (designing + making) at an appropriate hourly rate (mine's based on the rate I get in my other freelance job), add on a proportion of overheads (heating, lighting, insurance, etc.). That gives the barest minimum that I am prepared to get out of bed for, i.e. a wholesale price. I roughly double it for retail and add on a percentage to cover Etsy and Paypay fees. Then I get out there and promote the heck out of whatever-it-is, so that six months down the line when nobody has bought it, at least I can be fairly certain it isn't because they didn't know I had it for sale  :P
Lynn


Keep up with me on Facebook or my blog

julieHB

You seem to have sussed it, Lynn! I am so impressed!!  :)
Julie xx

                           My Webbie - My Flickr

noora

My pricing formula for hobby artists goes like this: "If this was my full time job, the one that's supposed to pay my bills and put food on my table, how much would I have to charge for making another one of these?" Remember to take into account that a huge portion of the price goes away in taxes etc. If you're a hobby artist and don't have to pay taxes, then good for you - you made a bit extra.  (I don't know how it works for you people, but here in Sweden you don't have to pay taxes for your hobby income if the hobby doesn't give revenue, so as long as you buy more glass than you sell beads you're fine.)

Those who actually do this as their full time job that pays the bills and puts the food on the table hopefully already have it figured out, or they'll soon find they're not eating or paying bills ;D

nemeton

Quote from: julieHB on May 25, 2010, 09:56:17 PM
You seem to have sussed it, Lynn! I am so impressed!!  :)
I wouldn't exactly call it 'sussed', but I do a good line in convincing BS, don't I?  ;D :P

Seriously though, it's taken me four years to get anywhere close to (a) getting my head round how retail vs. wholesale pricing is supposed to work and (b) having the brass neck to value my time at something like a commercial rate and then hold my head up when people tell me I'm too expensive. (And while I am being polite to these people - darned British reserve, it really is a handicap - I am really longing to say: OF COURSE I'm expensive, dammit, there's only one of me, I make one-off originals and I make 'em as well as I possibly can, and I've got thirty(ahem)something years' experience and a shed load of publications to my name... if you want mass produced cheap tat you can f*** off back to the high street >:()
If what I make isn't selling at what I reckon is a fair price, I'd rather go away and make something different than slash my prices. That has the additional benefit that it stops me from getting bored as well as keeping me a step ahead of anybody who might be thinking of copying me  8)
Lynn


Keep up with me on Facebook or my blog

ScarletLeonard

Lynn I have very much the same way of working as you. It's worked for years and if it isn't broke I'm not going to try and fix it.

I was once told to work out your hourly rate you should figure out what you want/need as a yearly income. Then work out how many hours you can work in a week and multiply that by 52. Take your yearly wage and divide it by the number of hours you work in the year to get an hourly figure.

Works out that to earn £25,000 per annum working 40 hour weeks you should be charging yourself out at £12 per hour.

25000/(40*52) = 12.01923076923077

When I did my hourly rate I looked at the rate of pay for other skilled jobs since you don't really want to go over the general going rate. Though it seems anywhere between £8 and £12/hour is normal.

I've also heard people say they add in an average of that hourly rate to all pieces to cover promotion, driving to and from the post office/supplier, sourcing materials etc. Technically we probably should but it all seems a little over the top especially when if you know how most promotion can be done automatically through social media and RSS feeds. Another one is craft fairs, I can spend anywhere from 5 to 16 hours a week standing shows but do you factor in a second hourly rate as a retailer as well as your time making the items.

I suppose the other side of the coin is do you charge a whole figure or go for the 99p theory. Some think it cheapens your craftsmanship others will stand by the fact that it is a sure way to make people think they are spending less and are more inclined to buy.

Quote"OF COURSE I'm expensive, dammit, there's only one of me, I make one-off originals and I make 'em as well as I possibly can, and I've got thirty(ahem)something years' experience and a shed load of publications to my name... if you want mass produced cheap tat you can f*** off back to the high street."
I like that quote. Maybe we need a sign of it, similar to those you don't have to be crazy to work here ones.

Scarlet xx

jammie

My brother in law had been here and been really helpful with my  setting up my website and I was showing him what I would be selling, (he's great and very honest but said I wasn't charging enough. Anyway, I have priced according to what I thinks ok and on a similar level to other jewellery sellers using same kind of materials quality etc....so last night my bils ex  (still friendlyish) said they would love to see what I was making so I pointed her to my sites etsy website flickr . She wrote back, stunning but way out of my price rnge. Made me just doubt myself a bit on the one hand but on the other I am going to answer her and say well talk to your ex he said my prices are still too low.
But at my local craft fair I was next to a regular (by mistake by her doing a swop) with regular customers and much lower prices very different jewellery little swarovski earrings all prettily boxed etc, and I thought I wouldnt sell anything but in fact did really well, many people bought from her but many people bought from me too and didnt think the prices were too high.
Frankly just now I am at a loss as to what to do, craft fairs and exhibitions and the stuff I have in a boutique do really well, online is nada. I am revamping the website ( well other half is) and changing the stuff around and adding new bits but all my fairs are at the end of the year as they seem to be my best place and time to sell and that means very littl coming in each month. My lampworking is doing well though and I will be adding my own beads to my stuff which feels great. I am well confused over this at the moment and having a bit of a crisis of confidence.
Sorry for going on, and if I have gone of topic and rambled, just that I woke up this morning feeling a bit despondent.  

Kaz

There is a world of difference between what an item is worth and what an individual can afford to pay. When someone comments that something is expensive, I take it to mean that they can't afford it (which is a shame, but a fact of life), rather than that I am overcharging for the item. We can all look at what others are charging and what the "going rate" for things is and assess our work against others' offers. It's human nature to say something is expensive when what we mean is either we couldn't or wouldn't pay the price asked for it.
Kazx
She's made of real glass. She got real real emotion. But my heart laughs I have that same sweet devotion!

Kaz

Oh, and for what it's worth Jean, my own view of your website is that it looks lovely, well presented, nice jewellery - but I think some of the pieces have been in there for a while so if you have other stock you have been selling at fairs, it's probably worth a bit of a swap round to refresh it?
Kazx
She's made of real glass. She got real real emotion. But my heart laughs I have that same sweet devotion!

jammie

Thanks for that Kaz, you are right about the website, and the etsy shop to come to that,  I am in the process of changing everything round  and taking new photos and putting them up and taking the website stuff to fairs. Think I have got a bit 'stuck' if you know what I mean.   :)
Yes expensive doesnt always mean overcharging thats true.

hexefroschbein

It also is useful if you work out how much your studio costs to run per minute, so if you've fiddled about for 10 minutes with a snowflake it's quick to figure how much it should cost.(remember, there is also a cost to time spent accounting ;-) )

Don't forget to add the cost for your kit too, because eventually your torch will wear out, your oxycon will keel over, the kiln will strike, tools will break etc.  Figure out how long something should last (say a kiln should be ok for 10 years), then divide that appropriately to add to the cost per minute of studio time. (or a cost per day). 

Also, count objects you break, if you spent 20 minutes on a bead and it goes *boom* on the mandrel or later in the kiln or the package, that is all part of the cost of running your business.

Keep a spreadsheet/log and update it every day, put in what you sold/made/broke, and how long you worked that day on what tasks.  I know that sounds a bit OCD, but it'll help you see patterns in your work flow.

Lastly, a lot of councils run small business courses for free, check it out, they can be a lot of fun to attend.

8():

Hexe

noora

And if you had to make 20 beads to accomplish a set of 15 (because they weren't all evenly sized or whatever), you should remember that the set of 15 should cover the time and glass spent on the other 5 that you discarded.