How do you know if you are underselling yourself?

[qwirkyglass]

Hi,

this is a problem that i have stuggled with for ages, and i was wondering if anyone else has this problem.
I feel at the moment like i might be under valueing / under selling my work if that makes any sense.
I always work out my prices the way i have been taught,
e.g. materials + time + studio fees = x + 30% = price + stand back and think will some one actually pay that much for my work
but the prices i come out with are so much cheaper than other peoples, for example, one of the people i graduated with this year had a sale this weekend and priced most of her work between £200 and £300 where as when i do a sale with similar work i dont price anything above £100 unless it is extra special.
I try and keep my work as cheap as i can to try and encourage people to buy, but im not really selling anyway so should i just put a higher price tag on it anyway?
Im in such a dilemma because i am trying to get my first esty shop up and running for my new products and i want to have honest prices to put with my work
How does everone else come up with the prices that they are happy with?
Does anyone have any advice?

Thanks in advance (and i really hope this has made sense)

[Blue Box Studio]

I have a spreadsheet I was given by an Etsy (or Folksy  ) seller that lets me work out my costs, including studio set up, tool replacement etc.  I run new lines through that to get a starting price.  Experience of my outlets then gives me a selling price.  I check what other people are selling for to reassure me that I'm not too wide of the mark.  I gave up on 'sale or return' to galleries as they were taking at least 50% which either wasn't viable or put the cost of my work too high.  I'd like more for my work but I'm not a known/famous name making my work command a higher price. I do make a profit so must be doing something right, I couldn't afford to continue if my busioness didn't pay its way.

[Kalorlo]

Are you maybe selling at wholesale prices while she's selling at retail? Your calculation sounds about right for the wholesale price (depending what you pay yourself per hour, of course).

[qwirkyglass]

but how do you work out what to add for retail?? i never got told that one, and i dont want to add to much that i have scary prices

[Kalorlo]

I'm going to link to Emma Ralph's very handy article (this is for jewellery but is probably relevant anyway): http://www.ejrbeads.co.uk/pricingjewellery.htm

[Blue Box Studio]

but how do you work out what to add for retail?? i never got told that one, and i dont want to add to much that i have scary prices

Generally double as most galleries will take 50%.  The simple basis I think is cost of everything x 2 = wholesale, wholesale x 2 = retail.  But you have to add in something for your overheads, tax, NI, cost of replacing/repairing tools when they conk out, your workspace etc etc to really be meeting your needs.

The spreadsheet I had was written by Chris Parry - chris-parry.blogspot.com, a bit of digging around on his old blog and I think you can get a copy here http://www.chris-parry.blogspot.co.uk/search/label/Spreadsheet

[mizgeorge]

I'll just add a plea to include a PROPER hourly rate for youself. I'm not talking about minimum wage here - bear in mind the time it's taken you to acquire the skills you need to do what you do, as well as the time taken for the creative process outside the actual physical making. Look at some other professional and skilled hourly rates - some of which can be far far higher than you might at first think.

[Glyn Burton]

I fully agree with Mizgeorge too many people are paying themselves ridiculously low rates, have confidence in your own skills and the quality of your work. Never apologise for your prices but if questioned explain politely (that's the hard bit) how much time and skill is involved and how they are getting a unique handcrafted item.

Check out the hourly rate for getting your car serviced, are you less skilled than them? are they better qualified than you? I bet they are charging more than you.

Sorry to go off on one but I feel passionately that we should not under sell ourselves and that we owe it to ourselves to get a fair rate for our skills. I can get very agitated with people who say 'oh I do it for love/interest/hobby and don't want to make a profit' in that case give it away or better yet sell it at a proper price and give the money to charity.
Rant over

[Redhotsal]

I fully agree with Mizgeorge too many people are paying themselves ridiculously low rates, have confidence in your own skills and the quality of your work. Never apologise for your prices but if questioned explain politely (that's the hard bit) how much time and skill is involved and how they are getting a unique handcrafted item.

Check out the hourly rate for getting your car serviced, are you less skilled than them? are they better qualified than you? I bet they are charging more than you.

Sorry to go off on one but I feel passionately that we should not under sell ourselves and that we owe it to ourselves to get a fair rate for our skills. I can get very agitated with people who say 'oh I do it for love/interest/hobby and don't want to make a profit' in that case give it away or better yet sell it at a proper price and give the money to charity.
Rant over

Quite Right - couldn't agree more. Trouble is, last time I said this, someone on here who sells "for therapy" not for profit gave me a right old flaming and loads of other people who make beads for the cats home and so on joined in. Thanks to those people we see sets of beads which have taken their owners HOURS sold on Etsy for about £8. Well done those people - you've killed the market, stone dead.

[♥♥Tan♥♥]

[/quote]

Quite Right - couldn't agree more. Trouble is, last time I said this, someone on here who sells "for therapy" not for profit gave me a right old flaming and loads of other people who make beads for the cats home and so on joined in. Thanks to those people we see sets of beads which have taken their owners HOURS sold on Etsy for about £8. Well done those people - you've killed the market, stone dead.
[/quote]

Classic!

[ARBeads]

We we're having a rotten show last year, really down in the dumps, we got chatting to another glass artist who advised doubling our prices - he hadn't even looked at what we charge. We thought what the hell and went for it there and then. It turned into our best show, our mid range pieces sold really well our top price pieces were admired and one or two sold, our lower price pendants still ticked out.

We're all guilty of underselling ourselves, we all make works of art in limited supply but it's hard to do the bulling up bit when it's your own work.

I'll never forget the double it advice, every piece just needs to find the perfect customer to cherish it, and I need to pay the bills so intend to charge a sensible hourly rate and grin whilst I do it. A smile costs nought but can really help get the sales. Though if anyone suggests they can buy the same in Argos or it's not Pandora I will still occasionally let rip - after all they're not my kind of people, no sale lost 

[Les]

I tried putting my prices up .. everyone kept telling me that I was underselling myself ... *tumbleweed*

Sorry I can't offer any advice ... am yet to find the magic solution myself

[silkworm]

I'm like Les - I don't know the solution. I have more confidence with my abilities and therefore my pricing on my jewellery so am happy to defend the prices I charge. My lampwork is more problematic both because there are a lot more variables in the pricing equation and because I am still far from expert.

I like formula's - and Emma Ralph's advice is excellent - but sometimes I make something up, work out the price and realise that it is probably not going to sell at that price so don't repeat the style.

Maybe I should try doubling my prices and see what happens!

[Zeldazog]

In terms of working out an hourly rate, George is totally right, it has to be a decent rate.

In Uni, we were told to look at it like this.  If you wanted to pay yourself a lower than average annual salary of say about £16,000 and you committed say 40 hours a week to your business that would be around £8 per hour.  Better than minimum wage, but not outrageously high.

But....how many of those hours do you actually spend making? - probably something like less than 24 out of the 40 hours you work a week at your business.  The rest, you spend photographing, listing, ordering, packing, buying parts, marketing yourself, updating your website/blog, contacting galleries/networking, stock-taking, cleaning, accounts, not to mention learning and developing your skills.

You only actually earn money from what you make, so you only actually earn whilst you are making.  So, £8/hour at 40 hours = £320 per week.  But you only actually make for 24 hours per week so you divide 320 hours by 24 and that equates to around £13.3 per hour.  And you haven't yet included overheads....

[Magpie]

I'll just add a plea to include a PROPER hourly rate for yourself. I'm not talking about minimum wage here - bear in mind the time it's taken you to acquire the skills you need to do what you do, as well as the time taken for the creative process outside the actual physical making. Look at some other professional and skilled hourly rates - some of which can be far far higher than you might at first think.

Check out the hourly rate for getting your car serviced, are you less skilled than them? are they better qualified than you? I bet they are charging more than you.

Just for interest Renault now charge £150 per hour for their mechanics.