Marketing High Production- Low Price Vs Low Production- High Price

[DavidL]

Shortly I'm going to work this out by my self through some evaluation of the marketplace, but would like some feedback as to where a handmade, hand stitched product will make the biggest impact.

This is hypothetical - If I was able to make a perfect wallet every time on both high production or low production

If I was able to make 300 percent return on high production. 1500 percent return on low production.

Barret Alley - sells at 15-20 times the cost of material. ex. Kangaroo wallet for 195 dollars and cost 15 dollars to make plus there time.

- I don't have barret alleys sales figures, but they have sold over 2000 wallets, based on the number count on the wallets, maybe into 3000 area.

In your opinion low production or high production for best case scenario? Barret Alley has no direct competitor for handmade - naturalist type wallet that I know of.

[Dwight]

The question is do you want to be Neimus Marcum or Walmart?

It's your decision, . . . you have to make it. But I will tell you this, . . . if you are turning out higher numbers, . . . you are turning out more flaws.

The more time you spend on an item, . . . the less chance the customer will be dissatisfied, . . . and generally he'll be more "proud" of the product.

I am personally a craft guy, . . . making one at a time, . . . for one person at a time.

YMMV

May God bless,

Dwight

[DavidL]

Good points. High quality is what I am going for. I personally hate walmart they ruin all the small business in the area just because its 20 cents cheaper to buy bread at walmart then a family own store.

[badLoveLeather]

Hi David. Are you looking to feed a family with your leather income? It can be difficult. I make high end wallets and its been my experience that:

There a many that make better and charge WAY more

There are many that make not so good and charge acordingly

There also are a few I've seen that make wallets that are just as good as mine or better and they don;t charge nearly enough for some reason.

Its been my experience that you need to be comfortable with a price point and what your market will bear.

I looked up Barret Alley and they make great stuff. You can't really be sure how much volume they sell. Besides if your interested in selling wallets in that kind of volume you may want to consider putting in a few grand and several hundred hours of marketing leg work to let people know how great your product is.

I myself think I make great leather goods but not as many people knwo about me as I'd like. If they did I wouldn't be writing this, I'd be shackled to my bench making stuff.

make great leather goods. sell them. use the money to have a good time and make yer life and those around you better

[jk215]

Here is my theory on this issue.

Trying to compete on price is a losing game. If you check out Etsy and the like you will see hand-stitched wallets offered for like $20. Both from beginner leathercrafters and from overseas "companies". Trying to attract the customers who just want the cheapest option just isnt worth your time. Going the high-end route requires equal parts quality product and marketing. Barret Alley can charge $400 for a veg-tan wallet because they have social proof. They are associated with names like John Mayer, Red Wing, and Levis. Are their wallets nice? Sure. Would they be getting that asking price if they didnt have those types of endorsements? I highly doubt it. Marketing and social proof is the same reason Hermes can charge $200k for a Birkin bag. They are masterful craftsmen and have the endorsement of almost every major female celebrity that has ever existed. They have years long wait lists for people willing to drop that kind of cash on a leather bag!

I would say you should find a happy medium. Dont be the most expensive but dont be cheap. Create something unique using different leathers, designs, etc.. and make sure your brand image is conistent and speaks to the demographic you want to attract. There are plenty of people out there that understand the value of handmade items you just have to make sure they notice you.

[Horseshoe]

I'll through my opinion is as well. First I'm not trying to feed the family or make the house payment doing leatherwork. So I'm going to focus on low production high quality work with a somewhat high price. I've waited to seriously pursue selling my work until I reached a level of quality that I'm happy with. I view my work as one off original pieces that are 100% handmade. Just that in it's self would make it difficult for me do be a high volume producer. So I say figure out what you need and go at that way.

[NVLeatherWorx]

@badLoveLeather

You forgot the one that makes a very poor quality product and charges the Saks 5th Avenue price, and there are several of those out there as well.

To the original topic: It is one of those things that you have to figure out based on the level of quality that you are striving to achieve, the level of business success you are working towards, and you can't forget the market to which you are providing the product to. If the base market is the blue collar class then you may have to sell to the lower side of the price range whereas, if your market is the white collar class you can get more money out of the product. With regards to Barrett Alley, they do charge a very profitable price but I can almost guarantee that their philosophy is that they are worth it.

I have made my pricing structure based on my years of experience in this trade (about 40 years), the fact that I still do EVERYTHING by hand (even the stitching), and the fact that I only use the finest leather available (Hermann Oak). What I found to be the most interesting attention grabber at the events I go to is that I put an information card on every item that lists the item number, the style, the design/pattern, the finishing, the assembly technique, the total number of hours put into the piece, the suggested price (based on traditional business pricing models), and the price that I am listing it for. Rarely is there any attempt to haggle when that much information is put out for the buyer to see. I also make it clear to anyone who asks about ordering an item in a different color (considered to be custom) that the price is the same. I only charge them extra for the addition of things or for a non-standard design/pattern and any special design work that may be required. I typically only have one design/pattern of each of the more common items out on display but unless they really want it bad, these are perfect sales samples to generate the custom/special order business model that I have put in place.

[rawcustom]

This looks like the right thread to add my recent internet find that offers a paradox to your scenario. How about high volume with high pricing?

http://www.mrlentz.com/shopping/product/the-minimal-mark-wallet/

http://www.mrlentz.com/shopping/product/the-minimal-slip-wallet-06/

Not sure what his business is like but I applaud him, especially if it is working out. I knew a guy who was trying to sell a cabin he built. It sat on the market for months with no activity and this was during the housing boom. He finally changed realtors and the first thing the new guy did was up the price 50k. He said that most people weren't even going to consider it since it was low priced, so in their minds, low quality. After raising the price he got several offers and sold within a month or two.

[DavidL]

He's a member of this forum actually. I saw one of his post while searching through the forum.

Pricing is around market price. Pretty smart to only use rivets,nothing special, but nothing that will prevent people from buying it. Everything else is on par - his website is done well and his photography is also nice.

If you want to make products that are low priced and only focus on a price war then you will be for the life of that company underselling your products, but you won't stand out as much from the mass of people selling identical items. The ironic part of leather working is that like this product you posted it takes nearly no time to make and cost nearly nothing to manufacture. Bottom line is even at low prices you can still make a little money - no overhead.

The thing is sometime people who don't know anything about the product will buy based on what they are told: "You get what you pay for".

Same thing goes for wine and liquors which are overcharged and endorsed high end headphones. If the consumer thinks your item is worth 200 or if you can convince them that its worth 200 then they will pay for it. If your item is worth 60 dollars real market value and you can convince not only why you should buy product A for 60 but also why your product is better than the competition than you have a start to a good marketing plan. Whether you go for 60 dollars or 200 dollars the marketing plan should always be clear and solid. The 200 dollars item should have more perks, whether rarity (100 units), limited editions, collectors items, rare materials, collaborations, ect.

Unless you intend to sell mass amounts and employ a workforce to manufacture your goods, then exclusivity should be key.

Im starting to lean towards pricing things more high end, and selling something thats unique AND very easy to manufacture. There are people selling t shirts for over 100 dollars and sell out within weeks (very accomplished companies with a history). Falling into this niche of exclusivity allowed them to grow the company in a way that someone who's marketing strategy is only on lowering prices can not get to.

Their core marketing and value proposition are geared in a way to cater to a select portion rather than the mass market and in segmenting themselves from the mass market they fill in a niche, which is where leatherworkers should try to fall into in terms of consumer goods.

[rawcustom]

I agree that you are better off charging more and working at a specialty than gunning for the lowest priced product. Maybe winning the price war appeals to some, but it seems many people fail to account for their time when they set their price. I'm not making a killing at my part-time knife and leather making, but I charge enough to cover my material, supplies, and enough of my time to make it worth doing. I would probably stay with it even if everything went to charity, but I would find myself hunting, fishing, and spending most the time I spend now on knives on plenty of the other fun things in life.

Like I said I applaud him, and not sarcastically. I think its great and gives others like me the crazy idea that someday maybe I can get the same.