Pricing leather goods

[Horsewhishper]

Hello, I am having a hard time figuring out how to price my stuff, I normally take material cost and times it by three but on some recent projects where there is alot of time and detail put in on my part it feels like I am charging to little. Kinda in a pickle on what to do I don't want to gouge poeple with high prices and them not want to buy from me, in the turn about don't want to to sell my work and not make a proper profit. I make everything from start to finish by hand and think that is worth something.

Any help would be appreciated

[Sonydaze]

My suggestion is to price your materials (including shop supplies) at a reasonable markup, add on your labour at a real wage and view that as your cost.  Then add a reasonable amount for a profit.  If you do less, you are likely working for a not great wage.

My .02. 

[billybopp]

At any college biz school, you could take at least a semester long class on costing and another on pricing if you wanted to go to that kind of depth, but Mike pretty much hit it on the head in a nutshell version which should work just fine for small production ( including hobbyists).  The only real rule there is that you want to sell for more than it cost you to make (if you want to make a profit).  

Pricing is generally done by "What the market will bear" .. What are people willing and able to pay for your product.   That can vary quite a bit depending on where and to whom you are selling.  About the only way to find that is to look at similar items in the market, actually try selling your product, or some sort of pricing survey ( we call that market research ).

Mike has a relatively simple costing model, it sounds like - and that can be just fine.  If you wanted to go into more detail, you'd start with actual cost of ALL materials which could include materials cost, shipping, storage, even insurance.  Be sure to include ALL materials such as hardware, thread, glue, dye, even water if you use it, etc.   You'd also include labor (even if it's just your labor) and such.  Those are all Variable Expenses:  the more products you make, the more things you pay for.  Once made you need to think about cost of packaging, storage of completed items and such.  There are also fixed expenses which includes the space, heating and cooling, insurance, tools and such that are used for production: these cost you pretty much the same whether you make one item or one hundred.    How deep you want to go, tho, depends on you and to some extent how much product you make!   

Just some food for thought!

- Bill

[JLSleather]

I always "temper" that "hand made" speech a bit.  I've had people say my work "cant be hand made" because it was 'too perfect".. and you can find thousands of people on cutesy (etsy) claiming that their included defects somehow make their trinkets "worth more".  Example - I love the look of hand stitching, but I'd rather see good machine stitching instead of poorly done hand stitching.  Hand made is only valuable if it's WELL made.

I don't charge by the hour, nor do I pay by the hour.  I look at the item for sale, and decide if it's worth the asking price.  Long stories about how much time was spent on it, or how much they spent on training, or how their Grandma makes her cookies, do not change the VALUE of that item.  Long speeches about how long a guy has been doing it, or how much "experience" they have  - also do not add to the goods.  If a guy really is good at it, that will show in the work.  If he's just been bopping out something for a long time, that will show too.  And I've seen some "new guys" with real skills.

In leather, what makes it "worth more"?  I look for CLEAN hides, even dye applications and clear finishes with no streaks or spots, tight and consistent stitching, neat edges and corners, lace - if used - should be beveled and smooth.  

What DOESN"T add to the value?  Stories about scars and brands making a project "unique".  Flaws do not "add charm" or "character" to the finished goods.  Calling defects (material or workmanship) "hand made".

And the BIGGEST LOSER - TIME.  There are extremes on both ends, of course.  One guy wants a fortune for a simple little project because he took so long to make it.  Sorry, I do not reward people for being slow, or inefficient.  On the other hand, some other guy knows he isn't getting a huge amount for the sale, so his plan is to make it as inexpensively as is possible - lower grade materials and quick as possible.  I personally don't hang out with either of those guys

Now, I certainly "get" that something that takes longer will generally cost more, as things using more materials.  But there is an "acceptable" time period for a given article.  You can tell me you spent all week making that belt, every waking hour.  But if I'm looking at a nice clean, solid leather belt done well with good materials, I'm auto putting that in the $60-80 range ... and no story about 100 hours matters. 

When I shop, I go by that old question:  "If you cant TELL the difference, then why PAY the difference?"

Convention says that "fair market value is what you can get".  BUT in the end, it's YOURS, so YOU decide what to sell, and what price to sell at.  So if "it feels like I am charging to little" then you are.  

[NVLeatherWorx]

On 8/16/2018 at 4:12 AM, nstarleather said:

So a lot of things go into pricing and "materials cost x3" is not a very accurate way to price things.  Simple items with expensive material will end up overpriced and complex materials with more reasonably priced materials will be underpriced. 

 

  Our basic method with us is to figure out the cost of the material first then individual steps: Cut, Sew, Snaps, edge-dye etc, lastly we add a percentage to cover profit and overhead.   This gives you the price you want to get.

 Then you've got the price, you can keep going some, from there you can also look at the "going rate": if you come up with an ideal price of $25 for an item but you look around the net and see everybody is charging $50, then you can sell at for more than your ideal price.   Conversely if you see you need to get $50 for something and the going rate is $25 then you'll have to figure out how to make yours cost less or explain to the customer why yours is worth more. 

 

Contrary to popular belief you do not need to bring your price down just because the "going rate" may below where you have your price calculated at in order to compete.  The main thing about figuring out YOUR pricing is to compare your end product to that of what you see around you and if it is of a better quality in craftsmanship and your materials are better then you deserve to make the higher price your line to go with; conversely, if your product is of lesser materials and you are still quite new to the craft and  it shows in your work then you won't be able to garner that nicer price point.

You are not competing with everyone who makes a leather wallet (or whatever it is that you are pricing) just because they make them; we can all find thousands of examples of leather wallets that are relatively similar in look yet when you really take a good look at them you start seeing all of the flaws or finer points that either make them lower quality or higher quality in the overall scheme of things.  You have to figure out where you fit into the price ladder and don't think that you can't get more for your product than the other guy.

[howlback]

This is a leather working forum and it's members are creating various different products. It's hard to pin down any sort of universal "formula." My advice is to price them at what they will actutally sell at. Most likely, this will be just below market value.

[rodneywt1180b]

Pricing is something I struggle with. I sell on Etsy.  I spent a lot of time looking at what other sellers on Etsy were making, how much they were selling, and what their price points were when I set up my shop. I then took an objective look at what I was making and the quality I was capable of and set my prices to reflect that level of work. 

What venue are you selling in?  It makes a difference.  The same item in a high end gallery will bring more money than at a flea market.  I wanted to do online sales.  It's what works best for me.  I chose Etsy because it's big, it's known and it doesn't have the same degree of cheap overseas goods and bargain hunters as Ebay (I do see some). 

Be realistic about what you're making.  I'm not doing high end work.  I don't get to charge high end prices.  My work is more in the good daily user range so I price my work in that range.  I think I'm close.  I sell a cane every few weeks.  Is it a living? No.  I would have to make and sell a cane a day to even come close. 

The rate of sales?  Looking at other sellers on Etsy it's about normal for my price point and quality of work.  I'm hitting my goals for sales. 

All sales are a competition.  To get that sale over the other guy you have to offer something the other guy doesn't.  Some get involved in a race to the bottom on prices.  Don't bother competing there.  Look instead at unique products, niche markets, etc.  What I did instead of lowering my prices is I offer what I think is a better designed product than others in the same price range.

 

[Horsewhishper]

You all bring up very good points, my buyers tend to be poeple in public service, cops, firefighters, EMS personnel and poeple looking for custom stuff to fit there desires and needs, I try to price fair and not overprice , I am not a master yet so I still make the occasional mistake and nock the price down accordingly, it takes me 6 hours to completely stitch a 50 inch belt on both sides, don't know if that is normal speed or I am a slow worker. Something I will have to work on over time. Thanks for all the responses