How To Put A Price On It?

[Cyberthrasher]

Like when you tool a belt upside down? You only do that once, at least now I have a tooled belt example piece for the shop.

I came close to doing that once, but the customer and I both caught it in the design phase. This is the main one I'm talking about. It was Friday night and I had told the customer that I'd be sending it out on Monday, with the only thing left to do being the last coat of finish. It got screwed up and I couldn't fix it, so I spent all weekend re-working a 15 hour strap and getting it done in 11. I ended up getting it out on Wednesday - after I did some sanding and scuffing on the original to make a "road worn" strap out of it to send him for free. I figured it was a highly personalized design and he was a good customer (NO BUDGET!! ). He actually gave me an extra $60 for the rush re-work that wasn't really required in his mind.

[billymac814]

Good call, at least you got a little extra out of it. I don't know how I ended up doing mine upside down, I just started it without thinking. It was for a woman too so for all I know it was probably actually the right way. I didn't even realize it until I was all finished and putting the buckle on and I thought "Something's wrong.........oh sh@&!). So now I have a Patti belt with some floral designs on it. Its good to have though as I'm able to show people the difference between a tooled letter and a stamped letter.

[Cyberthrasher]

That picture was of both of the "finished" products that I sent him - after I had sanded down the original. About a month later he emailed me and said that his friends all liked that one the best. First thing I thought was "Figures". It was my first time using ClearLac. It went on fine on my test pieces but ended up getting too thick in spots on the final piece and started looking like it was cracking and just bad. All the little stuff that goes into our pricing vs. the other stuff that we give away

[prc77ro]

I try to figure materials plus time spent. If its an item I need to design first that design time needs to be figured in as well. If its one of my standard items I "subsidize" the design time.

I have more overhead than someone working out of their home so my hourly charge may be higher but the minimum I shoot for is 60/hr but 80 is where I like to be. Any less and its not worth doing, I do occasionally goof up and work for less but other jobs balance it out. I end up turning away a lot of jobs that would take too long and cost the customer a fortune. I'm really starting to head towards the more standard items or semi-custom items rather than full out custom jobs as I find its easier to turn a profit that way. A lot of custom jobs get way underpriced it seems.

We can't work for free though and a lot of people think we should. I get quite a few people in my shop thinking if they can buy it factory made for 100.00 that I should somehow be able to make it cheaper?!?!? I do not understand this logic, they obviously don't understand how mass production works.

Your absolutly right! Alot of people but not all, see leather products in the stores and expect you to bang it out in minimal time for the same price. They don't care if your drawing the design from scratch, cutting it from a hide, carving, stamping, or even hand stitching(sometimes they say"why don't you get a sewing machine"). But Cyberthrasher is right you have to know or at least be in the ball park with how long the project will take+ materials. But lets say your going to make a holster that anyone could get from the many online websites, but your going to hand stitch vs machine sew do you charge more? or just base it on hrs worked.

[humperdingle]

Thanks for resurrecting the thread

Well, i've sold a few items, but haven't really made a profit when time is taken into consideration. I sold a rifle bolt holder, and the same guy came back to me wanting a shorter version, so that was my first repeat sale (must have been happy enough with the first one!)

Mind you, he got a hand-made, custom size piece, in thick leather for less than the price of a factory-made, machine stitched item.

Materials were negligible, as I made them largely from offcuts and snaps/dye were pennies, so i suppose I might have managed minimum wage from them!

But at this point, it's still all about the learning process.

[Cyberthrasher]

Well, i've sold a few items, but haven't really made a profit when time is taken into consideration.

After about a year and a half, I still haven't made a profit

But, I know my problem. I make sure I have enough stock on hand to get the orders done as they come in, as well as making sure I have the tools to do what I need. I chalk it up to the fact that I'm still in the "startup" phase of building supplies and stuff. I think now I'm getting to the point where I may be able to start saying it's profitable.

[billymac814]

The hand vs machine stitching as far as pricing goes is sort of hard to figure. When I was hand stitching I really just charged my price, I don't think it was higher because I hand stitched, it was just what it was. When I got a sewing machine I certainly didn't lower my prices but I took down the "hand sewn" from my website. To be honest no one ever missed it. If someone requested it to be handsewn specifically I would definitely charge more for that now.

Hourly really only works on custom stuff and even then its tough because people will hold you to a quote and they like to know what its going to cost ahead of time, it can be used as a guideline though to determine the price. You can't charge someone more because you were working slow that day or have inefficient ways of doing things AND you don't want to take a pay cut when you upgrade machinery and tools or streamline your workflow. I have an hourly rate I'd like to achieve on average, some jobs I end up losing a little and others I make out better but I never except in some special cases charge by the hour. My main reason for that is because I get paid ahead of time with very few exceptions. That I've learned the hard way.

[JustKate]

Bob touched on this a little, but I think it bears some additional consideration: the market. Or more a question of which market. At the very least, you have to cover your time and materials, but somewhere, there is a market that is willing to compensate you much more than that. It's called profit, and there's nothing wrong with it, because it involves finding and selling your work to someone who genuinely values it.

What the item is worth to you (in terms of materials and labor) is different from what it is worth to a potential buyer (in terms of their needs and wants). If you need $90 out of an item to cover your materials and labor, but you stumble onto a buyer in whose eyes your heirloom-quality handmade work is worth $240, which will you charge them? Before you find that market, you'll probably find a lot more people who value your work much less than that $90. Don't even give them the time of day, they can't tell you what your work is worth to everyone, and they are clearly not your buyer.

Of course, the problem with that question is, how would you know? A buyer isn't going to say, "Gee that $90 is too low, I think I'll give you $240 for it." One way to at least partially answer that question is, you have to learn to understand the value of your work from the perspective of a buyer, focus on what they will put value in. There are the more obvious things, such as durability, artistry, the look, smell, and feel of real leather. Aside from that, what about emotional benefits? How would they feel showing up at a meeting carrying a finely crafted leather briefcase? Or at a party wearing a genuine leather wrist cuff instead of the vinyl ones that everyone else is wearing? Or taking people out to a restaurant and taking their credit card out from a beautifully-made leather wallet? Compare your own work to a similar mass-produced item. What are the differences that are really going to matter to someone who owns it?

And by the way, It's not inherently better just because it's hand made and it took you a lot of time to make it. Sometimes being hand made makes it inferior, depending on the skill of the person who made it! So be brutally honest with yourself. Is it really better, and if it isn't, what do you need to do to make it so? A buyer isn't going to give a rip how much time you put into it, they want to know whether it's worth it to them to pay that much for something. Really look at it and ask yourself how it is really better than something mass-produced, from the perspective of someone who would own it.

Another part of the puzzle is psychologically going beyond the question of, "Will it sell?" You can sell anything if the price is right. If your $90 belt is getting snatched up by everyone who lays eyes on them, you're probably pricing them too low. The real question is, "Where is the best market where it will not just sell, but sell at a profit?" Where is that buyer to whom my work will be of great value? And to find that buyer, you will talk to quite a few wannabes who will discredit your work and tell you how ridiculous the price is in an attempt to negotiate a lower price they would rather pay for it. The irony of that is, they actually want it, but they just can't afford it. Don't let them make that your problem. Keep looking for that worthy buyer. It's not a question of whether it will sell, it's a question of where it will sell at a profit.

[Cyberthrasher]

I can't add anymore to that.

[billymac814]

That was very well put but here's my question in regards to that. Do you price an item higher because you feel the customer is more likely to pay a higher price? I think I've probably done that unconsciously a little but usually my price is my price. I will say that sometimes I think a customer may not be someone who would spend a lot on something or that they couldnt afford it and they are always the ones who seem to bust out their wallet.