Questions on Pricing

[Ian]

John, great explanation. It's interesting, when you think about it, if the value of an item is X, then why should that change regardless where it is made? You are somewhat between a rock and a hard place, working out of China. If you charged the same as you would for a piece made in the US, you might be accussed of gouging, but if you charged less, you might be accused of bring the price of US/European made goods down or unfair competition. Hmmmm

I can't wait to see what Bobcat comes up with - you KNOW it's going to be great.

Sometime I'd love to hear how you came to be living in China.

[JohnBarton]

John, great explanation. It's interesting, when you think about it, if the value of an item is X, then why should that change regardless where it is made? You are somewhat between a rock and a hard place, working out of China. If you charged the same as you would for a piece made in the US, you might be accussed of gouging, but if you charged less, you might be accused of bring the price of US/European made goods down or unfair competition. Hmmmm

I can't wait to see what Bobcat comes up with - you KNOW it's going to be great.

Sometime I'd love to hear how you came to be living in China.

When I got out of the military I stayed in Germany and ended up living there for ten years. That is where I started my first cue case business. Then I moved back to the USA to get married in 1999 and ended up selling the trademark (and business) in 2003. From 2003 to 2006 I worked for a former customer as sort of a consultant/guy who knows how to run a business sort of person. In 2005 my boss asked me if I would like to go to China for a while and be the person who does quality control, product design, and sourcing. I jumped at it and have been here since late 2006. While here I really got the bug again to do cases and decided that I would build a shop and see what I make of it.

So I still have a day job working for my former customer and I have my shop. One good thing about the shop is that it allows me to experiment and develop new production lines and as a result I have introduced around 30 new and improved models to the mass production lineup of cue cases. So instead of the usual crap from China I can at least be proud that my mass production cases are of pretty good quality for the money. I figure that one way or the other there are going to be cue cases on the market for $5 to $300 that come from China so I might as well offer a version that is well made.

As far as the rock and a hard place goes I see your point but I don't really see it that way for what I do. I just price the cases according to what I want to make on them. One of my partner factories also builds cue cases and their top of the line tooled/painted cue cases are on offer for $1900 and $1700 respectively. My cost to buy those cases is pretty high. And still they sell. Each one is unique in both the theme and the construction and since May last year we have sold around 11 of them.

You can see them here: http://www.jbcases.com/gallery/main.php?g2_itemId=2602

I think that most people who judge things based on the merit of the work don't much care where it comes from. They base their buying decision on what level of satisfaction they are going to get out of owning that item. Anyone with half a brain can find out or figure up the cost of materials and time needed to make just about anything, especially items like ours. It's not really about that as much as it about who can provide what the customer wants and what makes the customer feel good. In cue case making I have developed a reputation for taking on pretty much whatever anyone wants to make. That brings me a lot of business from customers who can't get that from other cue case makers. I can afford to do this because I treat my shop as a research and development center for cue cases. Other case makers don't have the luxury to offset the development of new patterns and methods with revenue from mass production projects. So this gives me a relatively unique service to offer to cue case customers that transcends the China stigma.

I can tell you this though, my goal is always to deliver more value and a case that people wouldn't have minded paying more for. Not to lowball anyone but instead just to provide more case for the money. So with that in mind my price will always reflect what I want to earn based on what I think I am worth but it will never be artificially higher just because I can get it. I just can't do it. If I buy a piece of ostrich for example and it costs me $200 then I don't put a markup on top of that just because it's an "exotic" skin. If I did the same case in Ostrich print for $475 then the one in real Ostrich would cost $675. I hope that kind of puts it into perspective how I approach pricing on my own goods. The end result of this is that often my cases end up being less expensive than comparable items from my competitors. This is not done deliberately to undercut them but is instead purely based on the fact that I am totally content with the profit I have on the cases as it's just what I need to grow and it's win/win for me and my customers.

But, having said that I am not above playing hardball in the production/semi-production arena as well. One of my competitors literally has ripped me off for millions through design theft over the past 12 years or so. So this year I brought out a new line of cases that competes with their "new" line and it offers far more value for about a 20% lower price. I am taking less profit on these cases simply to vanquish their line as that brings me a small measure of satisfaction. They could crush me if the want to though and offer their version below cost since they sell mainly low end cases for the bulk of their revenue. So far it hasn't come to that and I only build the cases to order anyway so each one is paid for before I build it.

Well I sure write a lot for someone who has a lot on his plate. Sorry for the long winded responses.

[Big Papa Leather]

Fantastic discussion! I have thoroughly enjoyed it and it gave me much insight to pricing.

I still feel that I may wrestle with the concept of what an item is worth and what people will pay.

For instance, I have a hard time justifying the price of items I purchase. I would love to have a really bad ass

messenger type bag. I have plans to build one, but man I would love to have a Maverick case... or a wallet from Kevin King.

I am not saying that these items are not worth the price tag, they are probably worth even more than they charge, it is that I

have a hard time justifying the expenditure of the $$$. In the example of the Maverick case, I can get by with using the free back pack my wife got on "Nurses Day" from the hospital she used to work at, or I have made me a wallet and it does it's job quite well, but some of Kevins designs or Justwakinup's stuff those are the bomb, they truely blow my wallet away. But again it is not a factor of is it worth it, it is more of a "I wouldn't pay that..." and that is not a response reflected in the item's value.

For me it is more of a concept like this, yes the free backpack is not the same as a nice handmade leather bag, but it works. Can I use the money that I did not spend on something beneficial to the family. I guess I look at it as spoiling myself. That is probably the wrong approach business wise, but it is the concept I wrestle with.

For as long as I can remember, I have wanted a BIG PLUSH leather recliner. One of my lasting memories is my dad's chair. That was Dad's chair. You didn't dare jump in it, horse play was not accepted unless, he instigated it. It was like you almost had to have an invitation to sit in it. I had many discussions with him as he sat in that chair, he blistered my butt over the arm of that chair when I'd screwed up. In a way it was kind of like his throne. I have always wanted a chair. However, even though I could/can afford it, I have always talked myself out of buying a chair like it. I just can't do it. Why? I don't know. It drives my wife INSANE. I just can't see spending the $$$.

So there is a peek into my psyche.

Allen

[Windy]

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

John,

I could not agree more with your statements on Jack being the man. I was at the Derby City Classic a couple of weeks back. I met Jack at his booth and his cases are something else. Very

nice work. I personally think all floral carving is ugly as home made sin. However the workmanship was very very nice. Of course this is just my most humble opinion.

WINDY............In awe of Jack's cases.

P.S. Jack is also a very nice person and a member of this forum.

Edited February 6, 2009 by Windy

[JohnBarton]

John,

I could not agree more with your statements on Jack being the man. I was at the Derby City Classic a couple of weeks back. I met Jack at his booth and his cases are something else. Very

nice work. I personally think all floral carving is ugly as home made sin. However the workmanship was very very nice. Of course this is just my most humble opinion.

WINDY............In awe of Jack's cases.

P.S. Jack is also a very nice person and a member of this forum.

I wish Jack would put up the latest Justis/Ron Ross collaboration that was shown on AZ Billiards. It's just sick with Ron Ross'es work on it and of course Jack never ever makes a mistake in the construction.

You probably saw it there. I can't imagine what that case went for.

John

[Daggrim]

Okay, I'm going to try something nutty. I'm going to post a link to my website, and I'd like some opinions on my pricing for the helmets. There are many resources available for figuring out pricing, and I'd like to consider this as one of them. The shortest distance between two points is a straight line, so this is the straightest way I can think of to cut thru some of the fog of my hemming, and puzzling, and counting on my fingers, trying to guess a fair price. Anybody open to giving it a try?

Daggrim

http://leatherhelms.com

[Windy]

Okay, I'm going to try something nutty. I'm going to post a link to my website, and I'd like some opinions on my pricing for the helmets. There are many resources available for figuring out pricing, and I'd like to consider this as one of them. The shortest distance between two points is a straight line, so this is the straightest way I can think of to cut thru some of the fog of my hemming, and puzzling, and counting on my fingers, trying to guess a fair price. Anybody open to giving it a try?

Daggrim

http://leatherhelms.com

Well how do you say this in a nice way. Since you have not adorned them

with any creative carving or heavily tooled them ,they seemed to be priced

right. I think you would have a hard time selling them at a higher price with

them not being any fancier than they are. From a simpletons stand point they

look rather easy to make. Frankly I am surprised more people do not make

their own.If you want to charge more I make the inside a little nicer. You only

had one inside view that I saw and it was unfinished and the seams were not

symmetrical. Of course you know your customers better than I know them. If

I was curious as to how much one would pay for an item like this, I would make

a couple just a wee bit fancier with a higher price tag. There always seems to

be one person who wants the most expensive of everything so that they can

brag about how much they paid for said item. I figure that the vikings did not

ordain their helmets very much. I will bet that at least one somewhere in time

has done some fancy work to one. There is always one creative guy in the

field who will go the extra step either out of boredom or just cause he has

the talent to do so. Once again this is just my most humble opinion.

WINDY.............Wondering why he has never made a helmet.

[Daggrim]

Windy, thanks for taking the time. The hardest thing for me to obtain is a perspective on my own things, so I appreciate an evaluation from someone who knows about leather. Also, good point about the interior picture. I've improved much since then, and I'll update my picture this weekend.

Daggrim

[Bree]

If you want to test your prices, double them and see if sales fall or increase. You can always say that a mistake was made and return the prices to the original level. The message is charge whatever the market will bear. Don't be afraid to charge what may seem to be ridiculously high prices. It's not like someone can go down to the corner and pick up a Samurai helmet crafted in leather!

[Go2Tex]

Nice website, by the way. Your prices seem a bit low for the amount of work you must be putting into your work. But, this may not be the time to increase prices, when the only retailer in the country making money is Walmart. But, I don't know anything about your market.