Pricing leatherwork

[HavenHillJay]

I have a question about pricing.  I have someone wanting to buy a Celtic Knotwork checkbook cover I made.  I was wondering how you would price that out.  I have calculated my cost per square inch for the various materials After some mark up it comes to about $20 to charge her in material costs which is about what Tandy would retail the unfinished kit for.  I will actually be using a piece of Craftsman Oak I purchased and would make a little money on that.  If I figure 2 hrs labor I would be asking about $60-$80 for a customer checkbook cover.  Is that in line with what you are seeing or have charged?

[TonyRV2]

I think it depends upon how established you are as a leather work as well as your overhead, machinery, etc.  If you don't have any machine costs and are hand sewing then imho I've always figured labor is cheap.   Someone just starting out, unestablished with low overhead (and by that I mean without a solid customer base) might charge twice the cost of materials.  For someone that has an established customer base with a lot of overhead (machine costs, building rent, etc.,) might get upwards of 40 or 50 dollars per hour on top of materials cost.  So I guess the question you have to ask yourself is where you are given those two extremes and decide accordingly.  Heck, starting out I would give stuff away at cost just to get word of mouth going.

 

[HavenHillJay]

Thank's for the feedback Tony. I have no machine costs, my skills are still developing, and I see the value of word of mouth advertising.  Much appreciated. 

[Halitech]

I'm about 3 years in and I'm like you, no overhead, no machine costs and certain skills are still in the rough stage and I usually go with 2x the material costs plus 15% wiggle room. Some things with little room for screwing up (like belts with nothing on them) I've looked around etsy and local customers to come up with a price that most will pay with little to no issue and then work up from there depending on what is being added. If it's a stamped name, do it for next to nothing or for free to get a favorable customer word of mouth advertising.

31 minutes ago, TonyRV2 said:

Heck, starting out I would give stuff away at cost just to get word of mouth going.

 

I really don't like seeing anyone give anything away. 1. You start giving stuff away and people will always expect it. 2. It makes people not value your work at all and even starting out, you are better then those that can't make anything.

[TonyRV2]

1 hour ago, Halitech said:

I'm about 3 years in and I'm like you, no overhead, no machine costs and certain skills are still in the rough stage and I usually go with 2x the material costs plus 15% wiggle room. Some things with little room for screwing up (like belts with nothing on them) I've looked around etsy and local customers to come up with a price that most will pay with little to no issue and then work up from there depending on what is being added. If it's a stamped name, do it for next to nothing or for free to get a favorable customer word of mouth advertising.

I really don't like seeing anyone give anything away. 1. You start giving stuff away and people will always expect it. 2. It makes people not value your work at all and even starting out, you are better then those that can't make anything.

Perhaps I should have pointed out that when I gave stuff away at cost it was to family members and close buddies....guys I thought I could count on to not give any more of my stuff away. 

[HavenHillJay]

Halitech, thanks for the input.  I've seen checkbook covers on Etsy for much lower than I would want to go.  Thinking the same thing on setting an expectation.  I'm still working on coming up with a maker's mark so I don't really have a recognizable brand yet though I would want positive word of mouth.  

Tony, thanks for the clarification, lol to hoping friends won't give stuff away for you.  The lady who wants the checkbook cover came into my son's workplace and had a crafted leather pouch with some kind of design on it and my son mentioned I do leather work.  She gave him her number to give to me.  He is my most active salesperson so far!  Ha!

Again thanks for the helpful advise!

 

[NVLeatherWorx]

The main thing here is what is your intention or direction?  Do you plan on making a few items here and there and selling them at local fairs/shows and even dabble in the Etsy market or are you planning on getting serious about it and putting your stuff out there for more of a global exposure and maybe even see if some local shops/stores would carry your products?  If you plan on local and not going too deep into it then go to the lower side of things; if you are looking more on a global scale and maybe some brick & mortar then you need to price just like any other professional business.  And for those who think that labor is cheap and that doing it all by hand should be on the lower scale of things, try it out sometime and see how cheap it is.  Hand-sewn is the best result if you are looking at creating a serious and long lasting product, regardless of what all the "Cowboy" and "Adler" and "Tippman" people think and I have many repairs of machine sewn merchandise to prove that.  And I can also tell you that it wasn't cheap for the customer to get the repair because I do this for a living and have done it by hand for over 40 years due to the fact that a machine can't create the best, most durable stitch on leather products.  If you value your labor, or that of anyone else, as cheap then you shouldn't be investing your time in making things for other people, regardless of which direction you take to market and retail.  Be careful how you look at things and how you relate them to our overall industry and the skills and experience of those of us who can do this in our sleep.

[JLSleather]

15 hours ago, HavenHillJay said:

If I figure 2 hrs labor I would be asking about $60-$80 for a customer checkbook cover.  Is that in line with what you are seeing or have charged?

#1 rule - remember that in the end it is nobody else's business what you charge or why.  Having said that, I'm only commenting because you asked.  If you charge a "mint", not my business.  If you GIVE it away, STILL not my business.

#2 (which is related to #1) - what someone else charges shouldn't have much of anything to do with what you charge.  If you're simply thinking "fair market value is what you can get" - then I guess you get what you can. But I've seen some leather work which showed obvious talent, and some which showed an obvious lack of talent -- I wouldn't be interested in one that was priced the same as the other, and saying that all leather checkbooks are equal is not true.

#3 there are pricing "formulas" all over the place. Double the material cost -- plus the price of diesel fuel in Japan - plus stand on your left foot facing west on tuesday mornings ... blahblahblah....  All of it means virtually nothing, since if it's not well done, I dont' buy it. Even if the price is low.

 

For myself, I don't buy anything based on "per hour" charges.  I want to know what it is I'm getting, and then I know how much I'm willing to pay.  It's the only RATIONAL way to do it.  Consider teh other way around.... PersonA makes a wallet, takes him 5 hours and it looks good. PersonB makes a  wallet, takes 10 hours and it's hideous and poorly done.  Doesnt make sense to pay the second guy more than the guy who knew what he's doing.

Another example.. when I had the roof done, I agreed to pay about $8,000.  If they do it in 2 days, they get $8k.  If it takes them half the third day, they STILL get $8k.  If they are the type to "hurry" because they don't get paid "by the hour", then they don't get paid at all at my house (not even hired).

 

SO THEN:  all that said I do think there are some factors which influence price:

• Are you making something different nobody else is offering?
• Are you doing something widely used, but doing it differently?
• Are you making something common, but yours is notably better than others?

But I don't consider machines or the lack of them a factor in pricing.  

• For a project which is stitched, is it stitched well?
• If I buy a new truck to go pick up the leather, should I factor that in? (that's intended to sound ridiculous)
• If I have a clicker to click out the parts, the machine costs money, but the labor goes way down.

 

 

 

[CaptQuirk]

@TonyRV2-I would argue the machine sewn price vs hand sewn price. If done well. hand sewn is as clean and strong as machine sewn, but more labor intensive.

[TonyRV2]

3 hours ago, CaptQuirk said:

@TonyRV2-I would argue the machine sewn price vs hand sewn price. If done well. hand sewn is as clean and strong as machine sewn, but more labor intensive.

Don't get me wrong.  I agree that hand sewing is superior to machine sewn leather goods.  The only point that I was making is that overhead costs (like purchasing and owning a sewing machine) may influence the price you charge for leather goods.  Of course in some respect machine purchases are offset by savings in labor, but I would still advocate that labor is cheap.  There is nothing in your shop that you pay less for than your own labor.  I think this is where most of the leeway is in terms of setting a price for something.