How much to charge...,

[Jordan]

I appeciate this post as I am one who is learning the how much to charge lessons, It is a difficult topic to ponder in a day and age that most everyone has been brainwashed into the walleyworld definition of price and quality. I have to constantly remind myself to steele my resolve and ask a realistic price for my items, reactions be damned. I admit I am guilty of it myself when I need to purchase something or other. And as stated in prior posts, let-um go to walmart, works for me. The way I try to see it is if a customer wants real quality and has some understanding of the time and effort I put into my stuff, they WILL be back and pay the price I ask. If they don't then chances are pretty good I don't need them as a customer, some are just not worth the trouble. I have not sold alot of stuff but I have found that there are not alot of people doing leatherwork around here, so the market is ok... Just my 2cents worth on the subject, anyway glad to see there are a few other rambling old farts hangin around. LOL Jordan

[Michael Sheldon]

Another interesting bit I've learned, and it's true on both crafts and in retail.

The less a customer pays, the more they demand.

I first learned this in the printing industry. The guy who comes in and haggles you for every penny down to your rock-bottom price for a few hundred prints, will go over each and every one with a magnifying glass and make you re-do ever one that has even the slightest imagined flaw until you find you've lost significant money on the job. On the other hand, the guy that comes in for a few thousand prints and doesn't even *ask* for a discount will take the job without more than a couple random checks. He trusts you to do your job properly and knows you need to pay your expenses.

If a customer tries to haggle you down, stand firm. If they say they will walk away, let them. The customer is *not* always right, and customers who do not value your work as much as you do will cost you in the long run.

[YRsaddles]

Amen Michael,

I found that people will consantly try to get something for nothing...I've had plenty of people I've had to politely show the door...they seem to think a one man operation can crank out 20 saddles a week and that I should be able to compete with all the other manufactured saddle company's price...I say I don't manufacture saddles here I do custom work and it comes with a custom price.

Dave

[AKRob]

Don't be embarrased to get paid!

Don' sell on consignment, heck I hate to sell wholesale:-) If you get too buy, raiseyour prices a bit. This does not always work, you'll reach a point when potential cliants can see the value and are attracted by the higher price.

One thing most ofmy customers realize is that they are not buying a something that will only last a few years.

Rob (who needs to charge more for his belts)

[Kimmee]

My shop calculations:

Materials cost x 2

plus

Standard labor charge $35/hour

plus

Artistic Labor charge $50/hour

Standard labor charge=assembly, stitching, stamping, dying, etc

Artistic labor charge= fancy carving, painting, etc

Logic:

First, I always double materials costs. There's waste/loss, cost of shipping/gas to get them, then just the cost of having the stuff hanging around until you need it. Trust me, this will *just* cover your actual costs.

As far as the labor charge, some might think it high, better craftsman might think it low. The trick is to honestly asses what your time is worth. Keeping in mind that this must cover taxes etc. Also keeping in mind that it's rare to be able to bill 8 hours of labor in an 8 hour day averaged over time. Don't think of it as like you were being paid by an employer, your employer charges/accounts for a lot more than what they actually give you. The labor charges are also where you make back the cost of equipment and facilities.

The hard part is often estimating the time needed for a job ahead of time. This comes with experience.

Thanks Michael! I have been looking for a way to price my items and this will be a great guide for me!

Cheers!

~ Kim

[BIGGUNDOCTOR]

I am a member of the Vegas Artists Guild, and they don't care what medium you work in , or if you have any artistic talent at all. They are more interested in that you have an appreciation for art.

This subject is common with any medium used in art. I am also on the blacksmithing forum iforgeiron.com where this subject was covered at length. You may want to check that thread out in the business side of blacksmithing section, as a lot of the principals are the same no matter what is being worked.

Labor, supplies, and overhead are fairly easy to calculate, but it is the perceived value of your item to the customer that is the tough one to get right. Some items are sold on the brand name alone, not so much the quality of the item. Gucci, Calvin Klein, and a host of other brands to numerous to mention come to mind. Some customers will question your quality, or skill, if you don't charge enough-perceived quality.

We also have to deal with the Wal-Mart, made in China effect on handmade goods. Why is that hand thrown coffee mug $25? I can get a ceramic mug at the 99 cent store. Wal-Mart has "forged" candle stands for $9.99, and you want how much for yours? We need to really impress to the potential customer that if they want a one of a kind truly hand made quality item that they come to us. If they want an item that millions of other people can buy all over the world, then they need to go to Wal-Mart.

Just because what we do may be considered a craft it still takes skill to pull it off right. That skill comes after a big investment in tooling, materials, and years of practice. The biggest investment we make is in ourselves. If they want to make the same investment then they can do what we do too. They are coming to you because they cannot do it themselves, or they do not have the equipment to do the work. You need to make a decent wage to keep a roof over your head, and food on the table. Do not be ashamed to charge what you need to in order to accomplish that. There will always be someone that is willing to do the work for less, let them. If you compete with them you will not make a profit either.

One way that I read about setting prices when it came to gunsmithing was to watch the customers face, and do not give a blanket price. Say I am doing some work on a rifle, it would go something like this. OK, that will be $50 for the recoil pad-no reaction, $10 to R&R the stock-no reaction, $20 to trim and dress the stock-a reaction is noticed-stop there as you have reached the pain level of that customer. Each one will be different. A guy who owns a $200 Mossberg shotgun will have a lower pain level than the guy who owns a $100,000 Holland and Holland side by side. Give a basic price then start adding details till you get a reaction.

One of the blacksmiths was at a show where another smith was selling similar items for far less money. He went to his booth, and bought all of his inventory to get it off of the table. Folks who do this as a hobby, and have little to no overhead can sell for far less than someone with a business. In the end though the lower prices will cheapen everyones perceived value. Just because your overhead is low doesn't mean that you shouldn't charge what it can bring. If you get every job you bid, your prices are too low.

So what happens if you give a low price than a few months down the road your costs go much higher due to something like fuel prices going through the roof which jacks the shipping of your materials up? Your leather supplier has a fire which wipes out their stock, and they won't be up and running again soon, so you have to go to someone that charges a higher price. Do you want to spend all of your free time working for that customer just to make ends meet? I would look at what skilled tradesmen in your area are making; plumbers, electricians, welders, machinists, HVAC techs, and auto mechanics at the local dealerships. You pay for their skills when you need something done, why shouldn't someone pay for yours if they want something done by you?

BTW, I never charged enough when I had my machine and fab shop back when I was in my late 20's. This was driven home many years later when I was working at the Jelly Belly Candy Co. Our purchasing agent asked me if I could have made a part that they had just bought. I looked it, and it was a simple enough part. "How many?" "20" "I'd have a hard time telling you $100, probably more like $60." "Really?" Yea, they would take less than 1hr each to make, and material cost is a couple of bucks." "We paid $300 each, and that is less than what the OEM wanted." So some company got $6,000 for a job that I would have had a hard time charging $1,200 for. My problem is that I know what it takes to make something, and for me it is easy to do. I never thought about the fact that if it was that easy they would be doing it themselves.

[WanderingStar]

I have the same problem, or almost the same problem. People ask me what I charge for something and I'm never quite sure what to tell them. I've only just started selling things for profit, most of my other work has been for family and they they basically just pay for the material and I do the work. I've only been leather crafting for three years now. Like for a belt... what should be base price for a custom belt be, where do you draw the price range lines, people balk at how much a custom piece of work costs. what about other things. I'm never quite sure what to say. because I hate saying one thing and then discovering that it was more and then they don't want to pay more.

Help please.

[TwinOaks]

I broached this subject with Johanna sometime after I posted this thread. She related some info from John Henry that goes something like this: You know you're at the right price when the customer gets a pained look on his/her face, but still reaches for their wallet.

There's also a thread on pricing that gives some info on gauging the customers and looking for visual queues from them as to what they think is a fair price and what they expect to pay. You add small increments as you talk, and look for that reaction. Ex: " Base belt is $35"...(no reaction from customer)....."Color, seal, and finish is the standard $10."...(no reaction)......"Custom tooling is $40 for this size belt.".....(reaction!!! be prepared to stop at this price)......"And this buckle is $25"....(strong reaction, be ready to back down)......"but, if you prefer, I can locate a less expensive buckle or you can supply one of your own and I'll be happy to install it for you".....(look of relief, you have reached the maximum price for this belt at $85).

Or....alternately.....You reach the limit you're prepared to charge and haven't seen the customer react, you add in "I also thought you'd like some of the heirloom quality Sterling Silver buckles, but I wanted to check with you before ordering a $350 buckle". If this happens more than once - where you've set your price and the customer was expecting to pay more.....raise your prices.

[woodandsteel]

I've been trying to figure out pricing for my holsters. I decided to set prices slightly high, and had several interested customers not respond once I gave then a price quote, so I figured my prices were too high, and decided to lower them by $5.

Yesterday I was showing a holster to the guys at a local gun store, and quoted a price to an interested customer. The shop employee said, "That's a steal!". Hmm... maybe my prices weren't too high after all.

[Leela Valley Leather]

I had the same issues when I first started selling tobacco pouches locally and market days etc.

In the beginning I was charging $AU20 and everything sold, that was great, except I wasnt making any money.

The first thing I did was have a look at the local market for similar products, guess what? I was the only one making them, sure you can buy some for $AU15-18 at the local tobacconist but they were either cheap compound leather from India or linen things from Nepal.

Having looked at what was available online (mostly cheap looking or overly complex and bulky) I decided to charge $AU5 more than the cost of a 50g pouch of tobacco.

The plain pouches (standard tan/black/brown) now go well at $AU40 each (very simple, 3 bits of leather with a roo skin thong to wrap around to hold closed).

Anything else is between $AU5-15 extra PER embellishment (fancy colour $5, initials at $5/letter, braded thong closure $15, different stitching $10 etc)

The local market seems to be quite happy to pay for it and at 30-45 mins per pouch I'm covering my costs, fuel and a nice dinner once a week.

I suppose what I'm trying to convey is "know your market and competition".

Initials were added as an after thought by the buyer (not impressed...)