How to compete with Cabella's

[Johanna]

Cabela's is one of the world's leading suppliers for outdoor enthusiasts.

Womens Belts

Mens Belts

Holsters

We can't touch these prices...we can offer a customer a custom item, or better quality, but not at these prices.

Johanna

[bruce johnson]

Johanna,

Great topic, near and dear to my heart. Number one, we have such a range of talent and expectations of return, we will never get a consensus. I think I saw in one of those G Hurst videos made during the first Tandy era, where he said leathercraft is one of the few hobbies that will pay for itself. That's true folks. Problem is that some people are happy to get the cost of the kit or materials back. Others charge the materials, and figure their time at less than $5/hour, ("Hey it is more than I would have made watching TV tonight"). Others double the materials and charge $50 or more per hour. And in each of these groups there are some real talented work, and some dead cows that need an apology. (Had some of my work described like that once). I am totally convinced that in the leather business especially, price does not equal quality. Everybody is comparing to a different yardstick - Walmart, Cabela's, Leddy's, Capriola's, the Cowboys and Indians magazine advertisers, or Ebay. There some $20 belts that need to be $150, and some $150 belts that should be $20, and some $500 belts that are priced right. Bottom line, they ALL get sold if they find the right customer. That is the key - selling, not pricing. Find the customers that will pay your price - consistantly. Now someone tell me how to do that, and we all get rich!!

Because some makers don't plan to upgrade tools or buy equipment, they can maintain a lower price, make enough to pay for what they have and they are done. Some of us have plans to expand, and want the money there to pay for it when the opportunity presents itself. Expectations and needs are the biggest factor for pricing. Some people want coffee money and others pay a mortgage.

I price my work like my living depended on it, but have a day job. I need them both, enough said. I markup materials, have figured my overhead, have an hourly rate based on overhead and what I think is a fair labor rate. That is what I charge. If I have to cut the labor to compete, then that is a project I don't do anymore. A business advisor told me that I need to do leather work because it is fun, not do it for fun. Somethings I do charge more than my going rate, because the market will bear it. I will give quantity discounts on some things that are all the same, and I can batch them. Still making the same amount per hour due to efficiency. One of my competitors summed it up - we need to make as much as the UPS driver who delivers our leather.

Bottom line for me - don't compete with anyone below you in quality, service, or price. Find your market, and keep those folks happy. Easier to keep a customer, than find a new one. Dang, I think I have used about every cliche my business advisor had. OK, one more. There is a rock for every frog. Some frogs like a Mercedes rock, and others sit on a Yugo.

Bruce Johnson

[Regis]

Bruce,

Your business advisor made sense. For 10 (or so) years I made and showed/sold custom gold and silver jewelry in a very large art gallery. I use 14K and up gold and sterling or fine silver as well as diamonds and other precious stones. There were six jewelers in the gallery. 4 of them strung beads and put plated fitting on the ends. My prices ran from $75 to around $800 and were priced based on material and respectable hourly wage. In the time it took me to design & fabricate a nice pendant, the bead people could make 10-20 items with only pennies in material. I did not quit my day job and, I also did not compromise my pricing just to move product (or keep up with the beads).

One of the 2D artist asked me if I knew the difference between a professional and amature artist. An amature artist has a job to support their art work. A professional artist has a spouse that has a job to support their art work. At the time, it was kind of funny. But, if it (leatherwork or goldsmithing) is a hobby, then, one should also get the joy of giving away the items as gifts. If it is a business, small or large whether starting or established, it should be run as a business. If you make fine quality then as part of sales, you need to be able to show the details and why it is worth the stated price to own it. Take pride in the quality or take steps to raise the quality until you are proud enough to show-off the work.

Enough pontificating from me.

Regis

[abn]

Find the customers that will pay your price - consistantly.... If I have to cut the labor to compete, then that is a project I don't do anymore.

Bruce, there's a great deal of wisdom in your post, but playing the devil's advocate (as I often do ), are you saying you wouldn't do leatherwork anymore if customers suddenly couldn't afford your prices?

[Art]

Hi Abn,

I think what Bruce is saying is that he would find new customers who would pay his price.

Art

Bruce, there's a great deal of wisdom in your post, but playing the devil's advocate (as I often do ), are you saying you wouldn't do leatherwork anymore if customers suddenly couldn't afford your prices?

[Art]

Hi Johanna,

I always price work at the PROFIT the market will bear; but always a profit and always ENOUGH profit to satisfy me. Since I make men's belts and gunleather (Cowboy and Duty), you would think that Cabela et al would be a worry. Not so, I am glad to see they charge what they do. At least they are not selling belts for $12. The Cabela's customer is looking for at least decent quality, and are willing to pay for it so some of them will gravitate to me if they see my product. I tell my customers the steps in making one of my belts and what is used to make them, I sell my quality. With holsters and gunbelts it is quite a different story. With the CAS crowd (that includes me) they are looking for HIGH Quality and that is what I provide with authenticity the next criteria. Cabela's just isn't into that. I don't know what it is with the pressure molding of gunleather, but on other than Duty wear it just looks cheap. Molding does make duty holsters a little thinner which for concealed carry is a plus. I do them either way.

You can make good money just selling belts and at very profitable prices too.

Art

Cabela's is one of the world's leading suppliers for outdoor enthusiasts.

Womens Belts

Mens Belts

Holsters

We can't touch these prices...we can offer a customer a custom item, or better quality, but not at these prices.

Johanna

[abn]

Yep, I know what Bruce is saying. But let's say, for the sake of argument, that no such customer existed. Would Bruce still engage in leatherwork or would he switch to another craft that provided better income?

I'm just wondering...

[Art]

Hi abn,

I don't know how Bruce would act, but I am from a school that taught you to make lemonade from a store full of lemons. I have a day job that keeps me more than happy and the leatherwork I do is more for artisanship or the artsy side of my head than anything. Nonetheless, there are more than 300MM people in this country and if you get your product out there, someone will buy it. Now not everyone is a marketing genius, but if you have something that isn't selling, you become one or you fail. If you fail, you start over doing something else.

Art

Yep, I know what Bruce is saying. But let's say, for the sake of argument, that no such customer existed. Would Bruce still engage in leatherwork or would he switch to another craft that provided better income?

I'm just wondering...

[abn]

if you have something that isn't selling, you become one or you fail.

The only reason for my post is that I'm wondering how much of a motivator money is for leatherworkers. I think it's great that we can sell our products, and the business and marketing side of it is probably fascinating.

However, I also think there are folks that just enjoy working with their hands, and worrying about markups, profit and advertising just pollutes the whole creative process. For that reason, I think there will always be craftspeople that undercharge or give away work, and there's probably nothing wrong with that.

-Alex

[ClayB]

[quote However, I also think there are folks that just enjoy working with their hands, and worrying about markups, profit and advertising just pollutes the whole creative process.

-Alex

Can anyone see me jumping up and down with my hand in the air???? That sentence sums up my feelings about selling my work. If I had to make my living as a salesman, I would wake up every morning and just puke! I have been carving leather for around 30 years now and I don't sell much of anything I do. When I first started, I sold a few belts, checkbook covers, etc. just to recover some of my costs. More of what I did has been given away as gifts. But the majority of what I do stays on my shop walls or in a pile somewhere. I learned how to build saddles a couple years ago, but I don't think I will ever be a saddle maker either. I made 5 and two of those are in my barn, and two others are hanging in my leather shop. I made them because I wanted to make them. I also have about 20 pictures that I have done hanging in my house somewhere, have given a few away, never sold one of them (yet). Funny timing here for this post because just yesterday I did take sevearal of my pictures down to a store in a tourist town where we were pouring some cement. I had been in the store last summer and really liked the store. It is a bookstore, but also sells music and art. I decided I would stop and see if they might be interested in taking some of my pictures on consignment. I have told myself that if I did do this, I was going to set my price to where I will make a pretty good hourly wage (almost twice my day job wage) The thought of going in the store really made me nervous and I almost backed out, but I made myself do it. When the owner saw my work he was really impressed and did want a couple pictures. He asked me what I wanted, and I told him, waiting for the "are you nuts" response. I was really happy when he said "that sounds really reasonable". So now I will just have to wait and see what happens. If they sell, that would be great. If they don't, I will still keep carving leather because it is something I really enjoy doing. Making money from something I love doing would just be a bonus.

Clay

[K-Man]

Don't sell yourself short at pricing your work. There will always be a group of people that think any asking price above $10-$15 is outrageous for an item that is truly worth 3 or 4 times that amount. I see it all the time in the holster business. A couple of things that help sell the product is the quality of the work, the customer service supporting that, and your genuine enthusiasm about what you've made. If you lack any of that, it's going to be a hard sell no matter what it is or what the price is.

[bruce johnson]

WOW,

Did some other stuff for a few days, and just came back. ABN, let me give a little background. I started doing my own repairs about 20 plus years ago. Went like that a few years, and then got bucked off, and broke my pelvis. Not sure if I would ride again, I started taking some classes and making some western things and horse tack to keep that connection to the people and lifestyle I hold dear. Did heal up, and selling handstitched basket stamped headstalls, belts, etc. became a little sideline - sold them off my saddlehorn at cuttings and ropings. Started doing more, selling some wholesale and custom orders for bigger things. Paid its way, and let me have some fun money. Got an early Boss stiticher to speed things along. Five years ago my wife unexpectedly died from cancer. I woke up to a 16 year old son, was living in an in-law's house, and a pile of medical debt. When insurance companies and hospitals disagree, the hospital looks to you if you have any kind of stability and a job. Hint - Don't sign a "DO Not Resuscitate" form, and then go into neurologic ICU over a holiday weekend. My other job is salaried, the only opportunity I had was to give up or get tough. I got serious with the leather business, and had to treat it more like a business. There are only so many hours in the day, and I had to make it pay. It worked, and that is behind me. I find I really enjoy the leather work still, and have further expanded as time goes on. Since I have kind of run the gamut, I have no issues with the guy's prices who does leatherwork for fun, for coffee money, or to pay the bills. One guy can't make everything anyway. But there are some things the guy in serious business has to do, and pricing to prosper is one.

Now to answer your question, would I still do leatherwork if I had no customers (and didn't need the money from it)? Yes, on the same level I fish or rope. They are enjoyable hobbies, ropes and fishing poles can sit, I don't have to do it. The leatherwork is for making money and enjoying it at the same time. I have expanded in talent, tools, and equipment. I have the same number and quality of tools and machinery that most any saddlemaker and serious leatherworker has. They have been paid for from the business itself, and profits and perks taken out too. I have plans to further expand what I do, and improve what I am doing now. I still make up stuff to give away as gifts or donate to a cause, or make something affordable for someone who needs a break. Real life though - I still live in one of the most unaffordable housing areas of the US, and am starting over at zero - 20 years later. Leather is cool.

Bruce Johnson

[Art]

Hi Alex,

Would I still do leatherwork if I didn't sell anything? Yes, but on a much smaller scale. I am by no means a huge producer anyway. I have pretty much paid for all my tools and supplies and trips to different shows with the wife through my work. I just wouldn't have the toys (needed and unneeded) that I do without selling my work. However, I would have some of them if there was no income from leather.

I will retire in the next 3 or 4 years, and I can't wait to spend 8 or more hours a day in the shop because I want to, not because I have to. And if I don't want to go into the shop one day, who cares but me? Doing anything as a business requires study and diligence. On the other hand, a hobby is just that, a means to keep mind and hands occupied without the necessity of making a profit. You just take it wherever you want to go with it. If you want to put a roof over your head or to feed the kids, then you have to be a bit more serious about it.

Art

The only reason for my post is that I'm wondering how much of a motivator money is for leatherworkers. I think it's great that we can sell our products, and the business and marketing side of it is probably fascinating.

However, I also think there are folks that just enjoy working with their hands, and worrying about markups, profit and advertising just pollutes the whole creative process. For that reason, I think there will always be craftspeople that undercharge or give away work, and there's probably nothing wrong with that.

-Alex

[abn]

Now to answer your question, would I still do leatherwork if I had no customers (and didn't need the money from it)? Yes, on the same level I fish or rope. They are enjoyable hobbies, ropes and fishing poles can sit, I don't have to do it.

Would I still do leatherwork if I didn't sell anything? Yes, but on a much smaller scale.

Bruce and Art,

Thanks for your replies. That makes perfect sense. Since I don't consider my leatherwork a business, it's interesting to hear the points of view of those who do.

Best, -Alex

p.s. - Sorry to hear that you lost your wife, Bruce.

[Patrice]

For what i have read for now, it seem that people who are not in craft businnes (leather, clothing, stained glass, jewlery, etc..) dont know anything about crafstman. Craftsman who live from their art need too make a profit for living. They must pay taxes, bills, electricity, mortgage, food, clothes, shelter, workshops, tools, etc...

Crafters deserved the rigth to live well and make a profit. With all the junk comming from China, consummers use to think that leather and the process of creation come cheap.

Even if i have a day job (school teacher), i wish that one day i can work half-time in leather and education.

I would also like to know if larpers in US are more willing to spend cash on leather gear than the larpers we have here in Québec?

[Art]

Patrice,

I don't know about Québec, buy around here CAS is the primary LARP for good leather sales. If quality and authentic, name your price within reason. SCA and CW Reenactors don't generally have the deep pockets of the SASS folks and a lot of the reenactors reenact the leathersmith.

Like I have said, if you want to do leatherwork as a business, you will have to treat it as a business. You will have to make what the customer wants and for which they will pay a reasonable price. You may have to specialize in one or two disciplines. In CAS, you will make a lot of sales at a match, and if you give out a lot of cards you will get business from them. Have a lot of product made-up so they can feel and touch and buy. Horse shows and rodeo are the same. Print thousands of business cards and make sure everyone at the shows gets them.

You must know the folks you are going to deal with. Don't do the rodeo circuits if you don't know what is going on or more importantly, what the participants need so you can talk to them intelligently. Know where your potential customers are going to shop so you can have product there in front of them. Many times you will have to invest hard money to produce enough product and pay for travel and table fees to do a major show. Be careful and spend that money wisely, always attend the show the year before to see what the sales are like, spend every minute there watching and take notes.

There are many strategies that can help with sales, if your customer won't buy, then look at your customer or your product. I don't know how many times I have seen businesses who are just selling the wrong thing to the right market or the right thing to the wrong market. Except for the oldest business, every business has to adapt to survive.

Art

For what i have read for now, it seem that people who are not in craft businnes (leather, clothing, stained glass, jewlery, etc..) dont know anything about crafstman. Craftsman who live from their art need too make a profit for living. They must pay taxes, bills, electricity, mortgage, food, clothes, shelter, workshops, tools, etc...

Crafters deserved the rigth to live well and make a profit. With all the junk comming from China, consummers use to think that leather and the process of creation come cheap.

Even if i have a day job (school teacher), i wish that one day i can work half-time in leather and education.

I would also like to know if larpers in US are more willing to spend cash on leather gear than the larpers we have here in Québec?

[abn]

So, I was talking to an acquaintance of mine the other day who sells paintings done on scrap metal for around $1,400 a pop. I asked him about pricing his work, and what he does when he can't sell an item.

To my surprise, he stated that he never lowers a price, and if an item doesn't sell, he actually increases the price. In his experience, this almost always results in a quick sale.

I guess the moral of this story is that many customers correlate price and value, and if you underprice your work, you're also diminishing its perceived value.

[BruceGibson]

Good stuff! And a topic that hits home with most anybody who works with their hands to create. Have y'all got room around here for another "Bruce?"

[abn]

I think we can squeeze one more "Bruce" in, and we'll wave the standard $500 additional-Bruce forum fee.

Welcome aboard! -Alex

[BruceGibson]

Thanks a bunch for the kind welcome! And to save $500 bucks right off the bat...yep, it's been a good day! Now I have to warn you--I can't speak for the other Bruce, but I've heard tell that too many Bruce's all in one place can get a little troublesome.

If you've ever been to a Springsteen concert, you'll know what I mean. :beer:

[BruceGibson]

As to the topic at hand, pricing is ALWAYS a tricky subject. When I started as a "craftperson," it was making bullropes for bull riders around the USA, Canada, and Australia. Nobody would show, or teach, anything, because it was (and still is) considered a "top secret cowboy art."

I spent a couple of years picking up what I could here and there...mainly a tidbit of information dropped by a braider that by its lonesome was of very little use. Over time, and many conversations, I pieced these bits of information together, and combined with what I was able to figure out through trial and error, I got to where I could actually make a rope. The first half-dozen were terrible. As a former bull rider, there was no way I'd use one, so I'd throw them away and start over.

When I got to the point that I could create something I'd actually USE, then I started riding with my own ropes. When it got to where other guys would actually ask--admiringly--where I got my ropes, then I figured I'd reached the point that I could let someone else use them. At that point, I GAVE A BUNCH TO A SELECT GROUP. The contingency for a freebie? If you have ANY problem with it, or don't like it for ANY reason, PLEEEEEZE come to me FIRST. That gave me the opportunity to fix the problem, and send a customer out with something that had been tweaked to their satisfaction. Ultimate goal? To have a bunch of guys on the road saying good things about my ropes...and about me.

What's it got to do with pricing? Well, not long after I had a dozen or so competitors actually using my stuff out in the big world, I did a little research on rope prices. At that time, you could get one that had been imported from Mexico for around $60 to $80. From a custom-maker for $140 to $180. What I did was take the "to" part of the price list and make that my starting price. In other words, if Maker A's ropes were $140 to $180, and he was the most expensive, then my starting price became $180.

My ropes were the most expensive in America at that time. Were they the "best?" I would never say that. Were they "as good" as the "best?" Absolutely.

I took over two years (actually closer to three years) to make darn sure that my rope would stand up to anyone else's. Long story short, I stayed booked an average of 6-months out for several years. Price was never an issue. I always stood firmly behind my work, fixed any problems IMMEDIATELY, and refunded, in full, if it was ever requested. Never, ever, get into an argument with one of your customers--the most you'll ever lose is the amount you refund when they return the product. If you argue, or refuse the refund, they'll badmouth you until they stop breathing.

The same applies to my leatherwork--whether it's a pair of chinks or chaps, or a roping saddle. With these items, I'm not the highest, but I never price anywhere near the lowest. I make saddles that start at $2500.00 and go up. My materials costs, before an ounce of labor, run close to $900.00 per saddle. Labor, goofs (and you'll make 'em) overhead...lights/phone/internet/website/glue/thread/stitcher maintenance/stamping tools/mallets/head knives/shipping/etc., etc., etc., figure into the $1600 gross profit. I might make a thousand dollars on a saddle I build if I get it done in a week, and there's no major disaster. But that never happens. Ever.

Real world example...a few weeks ago, I was cutting a saddle seat to fit a tree. I shouldn't admit this, but I did it, so I'll confess to it. I wasn't paying attention and I cut an ear (saddle part) off the piece I'd chosen for the seat. That's roughly a 9-square foot piece of premium Hermann Oak 13/15 ounce skirting. Around $65 worth of cowhide. I can make gun holsters from it, so there's a salvage factor there. Herein lies the problem...

You generally get ONE seat from a side of Hermann Oak. Or any other brand of veggie-tanned leather. Just ONE. No "do overs." My $65 boo-boo turned into a $175 boo-boo (plus shipping) because I had to buy another whole side to cut another seat.

The point of all this? Be good...be very good, at what you do. No matter what it is, just focus on being among the best at it. When you feel you've reached that point, then CHARGE ACCORDINGLY. Think about the multi-thousand dollar Hermes handbags...what's so dang special about them? Seriously. But they get their price, and create value in the minds of their owners. That's a win-win situation.

Compare the depth, and richness, of hand-carving or hand-tooling to what you'll find at a major catalog retailer...the difference between their embossing, and your hand-tooling. The difference between Hermann Oak and Tandy leather. Hold a piece of each...you'll immediately see and feel the difference.

The key is exposure. The folks that desire what you produce are out there--in abundance. They just haven't found you yet.

Figure your costs, and then accurately calculate the TIME it takes and the time you need to bill...and most importantly the amount you MUST charge for your time. And charge that.

If YOU don't believe that you're worth that amount, then keep working on it until you do. Then CHARGE THAT AMOUNT. Seriously...CHARGE WHAT YOU'RE WORTH. Visualize yourself as a product on a shelf. What is the dollar amount on the tag dangling from your arm, or neck? Figure that out, and charge it. Don't be shy--it's scary as heck at first, I promise. But once you've had a little practice, it becomes second nature.

There is NOTHING to be ashamed about when you're charging what you're worth. Just make damned sure ahead of time that you're worth that amount.

[Regis]

A whole lot of great advice that you provided there Bruce. Most of what you say applies in almost any chose career or venture....even when you are employed by someone or some company. It all begins with learning, then doing the absolute best work possible that YOU can produce.

Regis

[CitizenKate]

Great post, BG! A lot of great insight there. Some of the things you mention, like how you tested your product (and the water, so to speak) before getting medieval with the pricing is right on. One thing I have always believed about marketing handcrafted leather items is to focus not on explaining to potential customers what you do to produce the item but on the difference between what they are getting from you or Cabela's. They don't care how much work it takes; all they care about is what they are getting.

I've been trying to find the best way to word this, and you hit the nail right on the (proverbial) head.

Compare the depth, and richness, of hand-carving or hand-tooling to what you'll find at a major catalog retailer...

Kate

Edited February 2, 2007 by CitizenKate

[Johanna]

Great conversation, folks. No one wants to go broke. Some things I have heard and learned...

1. A satisfied customer tells 4 people. An unhappy one tells 11. (Southland Corp. 7-Eleven)

2. It's easier to sell things you believe in.

3. You know the price is right when they gasp, but reach for their wallet anyway.

4. You don't argue prices with the plumber, the doctor or the car mechanic, do you? Especially on a Sunday or holiday.

5. There are people you should send to Wal-Mart. You're doing both of you a favor in the long run.

6. Know when to send certain specialty jobs to a trusted colleague. They will appreciate it, and toss work back to you. It all evens out in the long run.

7. If you do custom work, insist on a deposit. That proves the deal is sincere, and if you never hear from the person again, you're not out your price of materials. Somewhere I have a beautiful Countess clutch purse that elegantly says "Edna".

8. If you can get the customer to hold, feel and smell the leather, you are more likely to get a sale. This is, of course, not scientific evidence, just personal observation.

9. I have charged $20 to set a rivet or two on an expensive broken designer purse with a straight face. It takes practice, but you can do it, too. Sure, it feels good to be "nice", and do it for free, but anything that calls you away from the bench costs money, and you have to charge for your time, and tool investment. You do not sell what you "do", you sell what you "know", same as the doctor and the plumber.

10. We can't compete with factories because of the volume they can produce, so our selling point has to be service, quality and custom work. In other words, to make a living at this, you have to be good. You know you are good when other leatherworkers buy your pieces as collector items.

I think one of the biggest obstacles leatherworkers have is not being good at sales, generally speaking. Very few of them enjoy the business side of doing leatherworking for a living, and fewer are any good at it. But no business can survive without sales, which is why many leatherworkers have day jobs. The Internet has become a great tool for promoting your work. If you have a website, make sure you add your link to your profile section in the User Control Panel. You might want to put your link in your signature, too. PM me if you need help.

Johanna

[Patrice]

The only thing i say is, wow, thank you!

But, forgive me if iasking 1000 of questions, but it is so intersting when i'm reading your reponses.

So, i'll risk my self at another question

How can i caluclate my price including, dye, finishes, stamps, thread, laces, sheep wool, leather and so on?

I've been never good at this exercice and just make an estimated of my time, leather and a bit of dye and finishes. :