Questions on Pricing

[celticleather]

Whenever I get to thinking about pricing my work, I always keep in the back of my mind, the words of John Ruskin, the 19th century social critic:

'There is hardly anything in the world that some men cannot make a little worse and sell a little cheaper, and the people who consider price only are this man's lawful prey.'

It helps me to keep a grip on reality, and prevents me from under-pricing!

[Johanna]

Bree's story also illustrates the point that David made with me this morning..."They don't pay you for what you do, they pay you for what you know." Think about the doctor, the electrician, the plumber, car mechanic, the tax preparer- do we blink when they hand us a bill? Are we glad they did the job, not us?

Johanna

[Bree]

Bree's story also illustrates the point that David made with me this morning..."They don't pay you for what you do, they pay you for what you know." Think about the doctor, the electrician, the plumber, car mechanic, the tax preparer- do we blink when they hand us a bill? Are we glad they did the job, not us?

Johanna

Now all I have to do is figure out how to make this guy a nice back support belt that seems to be worth the $300 or so of goods he is going to barter! And of course it figures that NIOSH research appears to show that these belts are basically useless for helping support the back!! They can make you feel better but they are not a panacea for back ills or a substitute for proper lifting technique and common sense when lifting.

I think that sharing the NIOSH research in an easy to digest form with some tips and a belt will be worth the $300. Helps to be computer literate!!

[Raven]

I am always being asked 'How much for that...' when I show people one of the things I make (not just leather, I like making things ). I think I have consistentlyunderpriced myself. I don't have the highest self-esteem and believing that someone will pay large amounts of money for something I've crafted is difficult. Here's the latest example...

Made this pouch for a woman I know through a local group. It's from a suede hide I picked up some time ago that's pink on the flesh side and a sort've sparkly purple on the front. It was in the seconds pile at a local leather merchants and I nabbed the last 3 hides at £5 each, good weight to it too So I made this reversable bag, pink and purple. Very simple construction, purple suede thonging throughout. Showed her the pics and she loves it.But what would you pay for it?

.

I have said £25 for it and even she said I should charge more! What's a guy to do?

[JohnBarton]

So, even though the quality of work might be similar, can the guy working on his kitchen table ask for the same money that a guy like Paul Cox, who has international recognition, get? I don't think so. Someplace there is the world's greatest guitar player who no one will ever hear, because he never got out of mom's basement, and he'll never fill a staudium at $200 a seat.

There is a company out of LA that makes wrist bands, watch straps, etc, and by their own admission - the work is rough. Yet they are the go-to guys for many rock musicians and movie companies because of their name, and they get the big bucks for stuff I could whip out with my eyes closed on a bad day. Yet I wouldn't dare price my stuff as high if I ever wanted to sell anything.

Have you tried? Does anyone here think that it makes sense to sell $1000 pool cue cases that are "made in China"?

My shop is in China. I now have five people working for me making the cases I have always wanted to make. The very first case I put up for sale was $1200.

Granted I started out with a little bit of a reputation from my previous business but that rep was for delivering mass production cases. Solid cases but still production models.

When I though about getting back into case making after a four year break I thought about what I want and what I think my time and knowledge should be worth.

My cases are not priced based on what they cost. They are priced based on what I feel they are worth. And that is based on what I feel I am worth. If no one wants to buy my work then that's fine, I will do something else as that shows that the buying public doesn't agree with my own idea of what my work is worth. That's called market reality.

But you will never know unless you try. Are you as good or better than Paul Cox or the rock star wrist band people? Maybe but unless you give yourself the opportunity to get out there and prove it by charging what you need to do that then you will never know. Customers go for what they know, they don't check out Rock Star Wristbands and then go searching on the web for comparable stuff from other people and then take a shot on those people being "better", especially if what they find is "cheaper".

It's a funny world and the price of things rarely reflects the true value, or lack of it.

Two things that are missing from this discussion are perceived value and customer satisfaction.

Perceived value is when a customer looks at your stuff and assigns a price to it in their head. When they think it's worth more than what you put on it you are ahead of the game. Customer satisfaction as relates to price is when the customer feels that they have received far more than they paid for.

The thing is that you can't really base your prices on what others charge. Because you see that it's all over the board. You can only make sure that what you charge really works for you and your business. If you can get away with making cell phone cases and getting $500 each for them then more power to you and hopefully you are doing something positive with the money. It's a sure bet that the people paying you $500 for the cell phone cases are getting whatever measure of satisfaction they hoped for.

It took me a year and a half of making cases and getting them out there and putting myself back in the spotlight to get to the point where my cases stand up as worth the money to most people who view them now. I guarantee you that if had let stereotype and stigma of "China" stop me then I'd just be a low paid designer making doing only low end mass production trinkets instead of following my dream of having the kind of shop that can make just about anything out of leather and do it with quality.

But in all things you need to be true to yourself first and if you believe that your stuff is worth it then charge accordingly. You can always adjust.

As Bree said, the world is your stage now. The audience is worldwide. The basement guitar hero can now become a real star and the kitchen table leather worker can gain a worldwide customer base at prices that make people stutter. It all starts with the belief in yourself that you are worth it and then the stuff to back it up.

[tonyc1]

John, what would your cases sell for if they were manufactured in the USA by USA craftsmen?

Tony.

[JohnBarton]

John, what would your cases sell for if they were manufactured in the USA by USA craftsmen?

Tony.

Well you all can probably answer that better I suppose since you can look at one of my cases and see the work that went into it.

The best answer I can give you I guess is to tell you what my colleagues making similar products get for their work,

A basic case from Jack Justis that compares to a similar model I make is priced at about $550 and my version of it is $350. A case I charge $1200 for that is nearly all tooled and carved is comparable to ones Jack gets around $1700 for with less tooling, but the tooling is done by Ron Ross. I am not sure but I think that the case that Rusty Melton just showed off here sold for $600 on the billiard forum. If I had done that case I would have charged at least $800 for it.

I mean there is no getting around the fact that the cost of living and thus the wages are lower here. That allows me some leeway. But still a case that I sell for $400 costs me just over $200 to build, even in China. Jack's most basic case goes for around $450 if I remember correctly and he is retired from Chris Craft and building cases out of his laundry room workshop. I'd be surprised if his cost per case is much more than mine for similarly built cases.

If I did the cases in the USA and paid American tooler's prices for them then they may or may not be more expensive depending on what my circumstances were and how much I wanted and needed to make.

As an example I once collaborated with Chas Clements where I sent him the cut leather and he tooled it and sent it back and we made a case.

My cost to make the case was $200. Chas charged $400 for his work. I sold the case for $800. Up until that point my most expensive tooled leather case was $490. If I had used my normal "business" calculation then the case would have been over $1000 and if I had added in some more for Chas' name and reputation then it would have cost even more. But my main concern on that case was to get Chas' work out to more people at a more affordable price, not really to cash in on the name and take what the market would bear.

If I asked any of you all to do something for me and you charged me $500 or a $1000 then I most likely would put that right into the case with no markup and just be happy with the profit I would get if the case had no tooling. So a case that now costs $500 from me would then be $1500 with your tooling.

As it is right now I deal with several toolers here in China and when I first talk to them I ask them what they will charge me for x-amount of tooling, using Sheridan style as a benchmark. Unless they are way over my budget I give them what they are asking for the first time with the understanding that the price is negotiable given several factors, one being giving them more work. If their work is exceptional then I often offer to pay more or just send more money when I pay.

Bobocat is going to do some work for me. Him I have told that I will send him the leather and he is to do whatever he wants to do and send me a bill. I might choke on the bill or I might not but there is no pre-arranged price. I will just see where it goes and when the case with his art is done it will be priced according to our costs and what I feel it's worth.

I guess this is a long answer to your question but it goes back to the roots of this discussion. Pricing is something that is fluid and dependent on many factors. While it's cheaper to get leather tooled here on average I can also take you to shops in China where a tiny wooden sculpture carved out of a piece of burl will set you back more than $1000, and the same story is repeated with jade, pottery, laquer paintings, calligraphic art, hand embroidery, ivory carvings and so on. And let me tell you that some of the carved leather goods here sell for good money as well. If any of you read Chinese you can look on www.taobao.com and find some really neat and well done stuff priced pretty high.

Anyway, I guess the answer is that if the cases were wholly made in the USA then they would surely be more expensive because they would cost more and I still would want to make the amount of profit on each one that I feel I am worth.

Edited February 1, 2009 by JohnBarton

[tonyc1]

Thank you very much for you honest answer, John.

Tony.

[JohnBarton]

One last thing. Don't ever pause when telling someone what you want for something. Have the prices you want clearly in your head and don't ever pause when delivering it.

When I was young I made a serious mistake more than once of judging people based on how they looked when they would ask about price. For some stupid reason I would hesitate when I felt someone looked as if they couldn't afford the case they were asking about. Conversely if the person looked "wealthy" then I would state the price timidly and fawn over them.

It didn't take long for me to find out that "you can't judge a book by it's cover" is sooooo true.

Having the price ready and being able to deliver it in the same way to anyone who asks shows competence and confidence.

[JohnBarton]

Jack Justis is THE MAN -

Right now he has no equal when it comes to getting top dollar for his work. You asked about what the case would cost if it were built all in the USA with USA labor.

Here you go, $3200 and it's yours. I was only off in my estimate by around $1500 :-)

http://forums.azbilliards.com/showthread.php?t=129747