Leather Cost/pricing...

[Chris B]

I was browsing youtube and found this video on Weavers page. I don't know if this video has been posted before or anything, but I figure it can help someone. You never know.

Hope this Helps Someone,

Chris

[dotleathergoods]

this video was very useful... I've new to know in sheet of a leather industry has waste 15% of total square feet in a sheet. Thx

[Dwight]

Years ago, . . . with some help from my friends in the electrical construction business, . . . I developed a little "standard" that has worked for me for almost 50 years.

Find out the gross parts price: parts, plus tax, plus any out of pocket extra expenses to get them, such as postage or shipping & handling by the supplier.

Once I know what it is going to cost me to do the job: multiply it by 3, . . . that is the finished price, . . .

Add 10% for THIMS (things.... I.....missed)

Add delivery

There is the price.

I have always been pretty much amazed at how well it works in about 90% of my different work projects, . . . to be about the same as the "professionals" who have a full accounting and marketing staff to arrive at their price point.

May God bless,

Dwight

[stomper4x4]

Dwight, I'm curious as to how you factor in labor, or if that cost varies for you at all with your formula.

Let me give an example. You do holsters so lets make two hosters for a 1911. Both will use the same stitching, parts, and quantity of veg tan. Both wet formed. However one is plain, just dyed and finished. The other has intricate tooliing, adding hours to the production time. Unless I missed something your formula would have the same cost for each.

Then what about taxes on your business and other such expenses like electric and health insurance?

I'm not saying you're wrong, rather I'm still figuring this stuff out and don't want to miss anything.

Thanks!

[Dwight]

Hey, Stomper, . . .

Well, . . . my labor cost as well as my profit, . . . comes out of that 2/3 of the overall price. It becomes an incentive to learn how to do things as well but quicker. I'm not bragging, . . . but every where I have ever worked, . . . people have always been impressed with my ability to delete extra steps, . . . buy or make a tool to do things better / quicker, etc.

Your tooling question is a good one, . . . easily answered, . . . I don't do very much tooling at all. If it is a simple stamping, . . . say 3 initials, . . . it's free gratis, and builds customer relationship, . . . doesn't cost anything, . . . but can be a deal maker down the road, . . . especially when they ask someone else who charges $7.50 per initial.

One of the biggest mistakes young business people make is not looking at their product through the eyes of the customer. An involved, researched, practiced, special tooling addition is one thing, . . . a few simple stamps is something else altogether. And the customer can see that 99% of the time.

Anything "decorative" or above and beyond the simple form, . . . is an additional cost, . . . as it then becomes a really custom job. It will generally command about $40 an hour for the last, final, finished carving / stamping work.

My health insurance, utilities, etc. are virtually no change for me whether the business thrives or starves, . . . they are built into my "living" budget from other income sources. The only tax is sales tax, . . . charged to the customer as applicable.

I have a chart I made up which tells me how much I'm spending for leather, dye, finish, conchos, etc. Thread, needles, machine repair all comes under THIMS.

It's not a perfect system, . . . but it is a good skeleton from which I've been fairly successful since 1968, . . . lost my kiester on a few jobs, . . . but then so did Edison, . . . I just count myself to be in good company.

The real key, though, is finding a system that works for you. Mine has worked in plumbing, electrical, carpentry, leather, and all kinds of other work I've done down through the years.

May God bless,

Dwight

[stomper4x4]

Thanks for the thorough answer Dwight!

I'm always concerned about pricing too high, and one of the biggest objections I get it pricing. Some of that, I think, is battling the walmart mindset. Others may be settling into a niche where people appreciate and are willing to pay for good handwork by a craftsman.

But then I see a lot of people pricing at, what to me, is obviously too low.

Anyway, thanks for your thoughts. It's helpful as I continue to learn.

Mike

[Dwight]

Mike, . . .

You will never be able to "beat" the Walmarts of this world. Don't bother with trying.

Your product is in the fact that it IS a quality product, . . . you stand behind it, . . . it is "custom made", . . . and your buyer knows you, . . . all made from quality raw materials, etc. etc. etc.

Like everyone else, . . . starting out, your price will be your "drawing card" to a certain extent. If you flub the dub on a holster or belt, . . . you can easily say excuse me, . . . fix the situation, . . . and go on with life. If you are John Bianchi, . . . you cannot flub and no one expects you to, . . . and he gets top dollar.

I am considered by many to be a tightwad, . . . so I use it to my advantage. Would I pay that $$$ for that item? If I would not, . . . then I get it down to where I would, . . . and there is the price.

But again, . . . I use my little formula first to set the price point.

On thing I will guarantee you, . . . if you are too cheap, . . . they'll break down the door to get there, . . . and you will be busier than Santa on Christmas Eve. It is OK to use price to ease your work load. Making one holster for $75 is a whole lot easier than 3 for $25 apiece, . . . and you'll probably have to make 4 at the $25 mark, . . . to see the profit of the one at $75.

And while no one but me is willing to say this, . . . I don't want to work for people who do not think my work is worth my price. They have already devalued me in their opinion, . . . I'm not going to devalue myself just to keep up with them, . . . and that is what you do when you allow yourself to be beaten up by the price game.

At a gun show, . . . I sat across an aisle way one time, . . . a guy had a toaster oven, some scrap leather, and was making CCW holsters "for your gun" on the spot for $20 each.

They looked it too. No edging, . . . junk leather, . . . kydex riveted to a piece of leather, . . . couple of belt loops to hold it in place.

I didn't sell as many as he did, . . . but I am pretty sure I took home more cash that day than he did, . . .

May God bless,

Dwight

[stomper4x4]

I've run across my version of "Kydex rivet man" at a festival and on forums recently. But I have to say that it's nice to get complements on how nice my work is, even if fewer people open their wallets then and there at the show. I am not going to try and compete on price with anyone because that's a losing game, as you point out. I know my work falls between the well known, best of the best makers and the skilled novice and I charge accordingly. But I do 2nd guess myself. I think it'll work itself out more as I settle into my niche more and find the places to focus my marketing, where the right customer who appreciates fine, hand made work has the cash to afford it.

On the forum, there was a guy selling belt pouches for $20 and free shipping, hand made by him here in the states. the work as not bad, but not top notch by any means. Once he pays the shipping and materials alone, he's not making much for his time. But I suspect that some of these folks are hobbiests, doing this on their off time so they skirt around paying uncle sam his share, nor has other usual business expenses to worry about. There is no way I'll go though running a business and all and only pay myself minimum wage

[RavenAus]

Dwight, that method may be the best one yet I think the one's I've seen all miss the THIMS and I know I've priced too low in the past. I'll try yours out and see what prices I get - once I'm back off holiday!

[Mudruck]

Mike, . . .

You will never be able to "beat" the Walmarts of this world. Don't bother with trying.

Your product is in the fact that it IS a quality product, . . . you stand behind it, . . . it is "custom made", . . . and your buyer knows you, . . . all made from quality raw materials, etc. etc. etc.

...

I think that is a hard part to overcome when you first start up. I know I had issues telling people that custom by-the-hour work was going to cost $40 per hour at first. Mainly because there were people that balked at that price and thought they would be able to find it cheaper somewhere else. Sure they may be able to, but I do this as more then a hobby and it is a side business that I run in the hours that I'm not working the 9-5 job. Some who balked at the price actually turned around once you you asked them, 'So what is YOUR free time worth to you?' or 'If you were going to spend time working on something for someone, what hourly rate would you be comfortable with?'

[lilsiscojoe]

I have a pricing question, maybe it is addressed elsewhere, but I haven't found it. I do a lot of tack repairs, and other leather repairs. How much do you charge per hour to pick out old stitching? I feel bad charging my normal hourly rate, but it takes so long, and is not a fun task. What is your experience or any other advice you have.

 

Thank you for your help.

[bikermutt07]

46 minutes ago, lilsiscojoe said:

I have a pricing question, maybe it is addressed elsewhere, but I haven't found it. I do a lot of tack repairs, and other leather repairs. How much do you charge per hour to pick out old stitching? I feel bad charging my normal hourly rate, but it takes so long, and is not a fun task. What is your experience or any other advice you have.

 

Thank you for your help.

I'm just a hobbyist with leather, but have done my share of contracting. If you're at the bench you have to charge for it. Pulling stitches or carving, it should still be paying your wages. Maybe there's more profit in pulling stitches but that makes up for less profit in carving. It's got to balance out for you.

[JLSleather]

I bill items like I pay for items... by the JOB DONE.

I don't pay anyone "by the hour".  By that standard, the slow guy would be paid MORE for the same work as the efficient guy, which makes no sense.  And since I don't PAY by time, I also don't CHARGE by time.

Say a fella got a new pistol and wants a holster.  Me and a nuther fella make that rig.  We both use same leather, same glue, same thread, same finish, even the same pattern -- and both apply it equally well.  When done, the two holsters are virtually identical.  Now,

... materials cost is the same.  Cost us each (for example) $20.  Now, say we charge $20/hr labor.  He does it in 2 hours...  total labor $40, total price tag $60.  But I'm a bit dim.. and the same rig takes me 4 hours.  Total labor $80... total price tag $100.  SO then SOMEBODY tell me how my identical holster made with the same quality materials is "worth" $40 more than the one just like it. ?!@#!$!

REPAIR work is the ONLY situation where a "time" factor could actually make sense.  I never do it, though... since I only repair it if I made it.  

We used to own some construction contracting as well.  And I can tell you that banks and insurance companies pay for repairs BY THE JOB.  Going through this again right now due to high wind damage on some of our properties.  They (insurance) pay "this much" for roof material replacement, "this much" for the crushed staircase, "this much" for the clean-up of tree limbs.  You can drag it out clean til Tuesday if you like, but you won't be paid any more than the set price (which I happen to agree with).

Incidentally, this post started a couple of years ago.  I have ordered leather from Weaver THIS year, and I can tell you that 15% waste wouldn't even be close!

 

[bikermutt07]

2 hours ago, JLSleather said:

I bill items like I pay for items... by the JOB DONE.

I don't pay anyone "by the hour".  By that standard, the slow guy would be paid MORE for the same work as the efficient guy, which makes no sense.  And since I don't PAY by time, I also don't CHARGE by time.

Say a fella got a new pistol and wants a holster.  Me and a nuther fella make that rig.  We both use same leather, same glue, same thread, same finish, even the same pattern -- and both apply it equally well.  When done, the two holsters are virtually identical.  Now,

... materials cost is the same.  Cost us each (for example) $20.  Now, say we charge $20/hr labor.  He does it in 2 hours...  total labor $40, total price tag $60.  But I'm a bit dim.. and the same rig takes me 4 hours.  Total labor $80... total price tag $100.  SO then SOMEBODY tell me how my identical holster made with the same quality materials is "worth" $40 more than the one just like it. ?!@#!$!

REPAIR work is the ONLY situation where a "time" factor could actually make sense.  I never do it, though... since I only repair it if I made it.  

We used to own some construction contracting as well.  And I can tell you that banks and insurance companies pay for repairs BY THE JOB.  Going through this again right now due to high wind damage on some of our properties.  They (insurance) pay "this much" for roof material replacement, "this much" for the crushed staircase, "this much" for the clean-up of tree limbs.  You can drag it out clean til Tuesday if you like, but you won't be paid any more than the set price (which I happen to agree with).

Incidentally, this post started a couple of years ago.  I have ordered leather from Weaver THIS year, and I can tell you that 15% waste wouldn't even be close!

 

Next time you have a big claim look into a personal adjuster. They can get you miles above and beyond what the carriers offer. Plus, they only charge a percentage of what they get over the original estimate.

[JLSleather]

Meh.. no big deal.  They paid out $6k for repairs I can get done for about $4800, so no worries

.

 

[lilsiscojoe]

Thank you for your input. I tend to charge by the job, according to what seems fair, but typically cut myself short. Something I need to come to terms with and figure out how to be fair to both the client and myself. Have a great day!

[MADMAX22]

Not to mention if you honestly charged by the hour as you got progressively more efficient at your process you would actually make less then when you started. Now if you charge the same amount as when you started then I guess you would make more money but you wouldn't really be charging by the hour anymore. 

[bikermutt07]

In the mechanic world they have flag time for labor. It's a nationally accepted amount of time per procedure. They even have a book for it.

[JLSleather]

3 hours ago, MADMAX22 said:

Not to mention if you honestly charged by the hour as you got progressively more efficient at your process you would actually make less then when you started.. 

EXACTLY my point.  The guy who knows what he's doing gets paid LESS for his skill, while the slow guy gets paid MORE for ... he don't really know why.

Personally, I don't pay extra for SLOW.

And that "hand crafted" scam is a bit much, too.  Some things need to be done by hand with some attention to detail.  Others, not so much.  

Big winds through here recently.. LOTS of trees down, half the town without power for about a day.  So we need trees cut and branches removed.  And roofs repaired.  I don't need a story about how it costs triple (or more) because you're cutting the trees with your vintage ax which belonged to dear old granddad   

Edited July 25, 2016 by JLSleather

[Beret]

My work is more focused in the tooling than the actually construction, so my pricing model is a bit different to reflect that, and based roughly on collar width, with a nod toward neck neck, My materials cost different is pretty negligible between size, so I opt for more of a flat rate pricing based on average time spent on other pieces at those widths. 

 

So I go 2.5 x materials + $X labor coefficient per width... Roughly. And then I tweak based on the comparables in my little niche.