Award and Appreciation Items

[bruce johnson]

A member PMd me earlier today about a procedural question on some award items they were finishing up, and it got me the thinking that we haven't visited this topic before. In the past I have made a fair amount of awards and some wholesale work.

For at least a few years, my wholesale and awards items made up over half of my income. I made all the rookie mistakes. I charged based on comparisons, not based on materials and time. I made items that everybody else was doing. I stayed busy, and sometimes the custom orders that paid better were put off to get an order out. On the upside, I learned batching and production techniques, I learned a lot about making different things, and I justified better tools and equipment. I learned it is possible to work your butt off, and when you total it up, you have earned $1.17 an hour on an order.

A few of my big lessons. When I got Bob Brenner's book and applied it, everything changed. Pricing went to materials and time. At that time shop rate was $30 and I charged $20 for the wholesale and award items. Material prices were marked up, miscellaneous costs accounted for, and it was non-negotiable to the bidder (me). Rates have since increased, BTW. I could justify the lower shop rate by the increased production - time savings due to batching, using the same tooling or lettering pattern, etc.

I learned after a few times that non-typical awards do better. As a recipent of a lot of award items, you can only win so many spur straps, breast collars, and haybags. By the time you get to that level, you have a breast collar you like, you have a saddle that carried you there, and you don't need anymore spur straps or director chairs. I started doing some different items - magazine racks, shaving kits, photo albums, splint boot bags, cosmetic bags (the Arizona assoociations thought they were camcorder bags), leather covered picture frames, brief cases, etc. Two things in my favor. I wasn't competing pricewise with import breast collars stamped by whoever. These items were unique - not everyone was giving them out. That gave me a little more wiggleroom on pricing as time went on. I still did some of the regular stuff too - rope cans, rope bags, headstalls, and spur straps. Some associations just stay in the same vein.

The advantages I see with the awards deal are a few. You get to make a lot of the same things. After you have done about a hundred leather covered picture frames, you know how to do it in your sleep. I have a flower I have carved blindfolded as a demo. You get some exposure too. I have never got a lot of referrals from awards items, but enough to make it worthwhile. The barrel racers and cattleman's associations are decent about generating some orders. Ropers never call for something else other than they drove over the ropecan and wonder if it has any warranty. You can get one big check all at once. That is cool. True story - I bought a Ferco 440 (borrowed the money for it) and found it was not the machine for me. Ron had an Adler 205 head for something like $600 more and trade heads. I wasn't sure where the money was coming from. Went to my first cowboy church that night. The preacher told me that "something good is going to happen to you because you came here tonight". I am home 5 minutes and woman from the Arizona is on the phone. She wants to order all their finals awards from me. I paid for the machine and had twice that in the bank in a month. With big orders you can pay off equipment in a hurry, then it starts paying you back quicker. Another advantage is that you get to meet some pretty cool people, and few jerks along the way.

The disadvantages. You have to be disciplined. These things have time frames, and you have to deliver on time. Silver suppliers and material backorders can kill you sometimes - keep on it, and know alternate sources. Get your work done. The advantage of doing a lot of the same thing is also a disadvantage. You are like the second mule in the string - the scenery never changes. I do things in batches. Small things like checkbooks or planners I might do 10-20 at a time. Stamp them all, line them all, etc. Take time every so often and do something else to break it up. Bigger things like briefcases or rope bags I do 3 or 4. If you spend two weeks and you don't have anything totally finished, it wears on you. I did 30 of the tooled leather toilet lids in one month for a wholesale order, I didn't want to see those for a while. Another disadvantage is that you have a timeframe on these, and sometimes I have had to put off or refuse a custom order to keep on track with something that was paying less per hour. That will eat on you too.

I don't do as much of the awards stuff as I used to. Part of it is me, I am not actively soliciting it as much. This past year it was about 10%, and custom wholesale orders were right at 15%. Not a significant part until I figure the steady cash flow from those deals. Those deals all came when I could afford the time. The wholesale orders are treated like custom. He takes an order for a custom item, I give him a price and he adds 20% or so, and I put it on the board. He is not inventoryng anything, but he is out there on the road, and setting up on the weekends. Unlike some other customers in the past, he wants my stamp on it. Some of the others sent me their makers stamp, and I respect that too. A kind of rambling experience, but I am interested in other makers' experiences with this line of work. Hopefully we can all learn something, make ourselves more profitable, and prevent some one else from some of the mistakes we made.

[Tina]

Thanks Bruce for sharing your experience, I'm sure it helps here:-)

Some of what you write about I do recognize, some I don't. I have never excepted a wholesale order, I'm to easily bored. I guess I'm lucky cuz I love cutom work, it keeps me as busy as I like. But still, from time to time you do come across someone that thinks it's "only a piece of leather" and wants to make "a deal"...Thanks but no thanks. Like you I'm all for not undermining the time we spend on this, and (hopefully for me by time) knollage plus all the tools and material we have to have in stock, it all costs money. I'm all for keeping the prices to an accurate level where we don't sell our self short and where we do get recogized for the craft.

Wishing everyone a great week end//Tina

[esantoro]

Thanks,Bruce, for the heads up. I'm beginning to see these issues cropping up. The one thing I'm trying not to forget is to price items for what they are really worth in time and materials, even if they take a bit longer to sell.

Ed

[Dink]

How well you hit the nail on the head here. Could you give me more information on the Bob Brenner book you refered to.

Dink

A member PMd me earlier today about a procedural question on some award items they were finishing up, and it got me the thinking that we haven't visited this topic before. In the past I have made a fair amount of awards and some wholesale work.

For at least a few years, my wholesale and awards items made up over half of my income. I made all the rookie mistakes. I charged based on comparisons, not based on materials and time. I made items that everybody else was doing. I stayed busy, and sometimes the custom orders that paid better were put off to get an order out. On the upside, I learned batching and production techniques, I learned a lot about making different things, and I justified better tools and equipment. I learned it is possible to work your butt off, and when you total it up, you have earned $1.17 an hour on an order.

A few of my big lessons. When I got Bob Brenner's book and applied it, everything changed. Pricing went to materials and time. At that time shop rate was $30 and I charged $20 for the wholesale and award items. Material prices were marked up, miscellaneous costs accounted for, and it was non-negotiable to the bidder (me). Rates have since increased, BTW. I could justify the lower shop rate by the increased production - time savings due to batching, using the same tooling or lettering pattern, etc.

I learned after a few times that non-typical awards do better. As a recipent of a lot of award items, you can only win so many spur straps, breast collars, and haybags. By the time you get to that level, you have a breast collar you like, you have a saddle that carried you there, and you don't need anymore spur straps or director chairs. I started doing some different items - magazine racks, shaving kits, photo albums, splint boot bags, cosmetic bags (the Arizona assoociations thought they were camcorder bags), leather covered picture frames, brief cases, etc. Two things in my favor. I wasn't competing pricewise with import breast collars stamped by whoever. These items were unique - not everyone was giving them out. That gave me a little more wiggleroom on pricing as time went on. I still did some of the regular stuff too - rope cans, rope bags, headstalls, and spur straps. Some associations just stay in the same vein.

The advantages I see with the awards deal are a few. You get to make a lot of the same things. After you have done about a hundred leather covered picture frames, you know how to do it in your sleep. I have a flower I have carved blindfolded as a demo. You get some exposure too. I have never got a lot of referrals from awards items, but enough to make it worthwhile. The barrel racers and cattleman's associations are decent about generating some orders. Ropers never call for something else other than they drove over the ropecan and wonder if it has any warranty. You can get one big check all at once. That is cool. True story - I bought a Ferco 440 (borrowed the money for it) and found it was not the machine for me. Ron had an Adler 205 head for something like $600 more and trade heads. I wasn't sure where the money was coming from. Went to my first cowboy church that night. The preacher told me that "something good is going to happen to you because you came here tonight". I am home 5 minutes and woman from the Arizona is on the phone. She wants to order all their finals awards from me. I paid for the machine and had twice that in the bank in a month. With big orders you can pay off equipment in a hurry, then it starts paying you back quicker. Another advantage is that you get to meet some pretty cool people, and few jerks along the way.

The disadvantages. You have to be disciplined. These things have time frames, and you have to deliver on time. Silver suppliers and material backorders can kill you sometimes - keep on it, and know alternate sources. Get your work done. The advantage of doing a lot of the same thing is also a disadvantage. You are like the second mule in the string - the scenery never changes. I do things in batches. Small things like checkbooks or planners I might do 10-20 at a time. Stamp them all, line them all, etc. Take time every so often and do something else to break it up. Bigger things like briefcases or rope bags I do 3 or 4. If you spend two weeks and you don't have anything totally finished, it wears on you. I did 30 of the tooled leather toilet lids in one month for a wholesale order, I didn't want to see those for a while. Another disadvantage is that you have a timeframe on these, and sometimes I have had to put off or refuse a custom order to keep on track with something that was paying less per hour. That will eat on you too.

I don't do as much of the awards stuff as I used to. Part of it is me, I am not actively soliciting it as much. This past year it was about 10%, and custom wholesale orders were right at 15%. Not a significant part until I figure the steady cash flow from those deals. Those deals all came when I could afford the time. The wholesale orders are treated like custom. He takes an order for a custom item, I give him a price and he adds 20% or so, and I put it on the board. He is not inventoryng anything, but he is out there on the road, and setting up on the weekends. Unlike some other customers in the past, he wants my stamp on it. Some of the others sent me their makers stamp, and I respect that too. A kind of rambling experience, but I am interested in other makers' experiences with this line of work. Hopefully we can all learn something, make ourselves more profitable, and prevent some one else from some of the mistakes we made.

[bruce johnson]

Dink,

Bob Brenner's book is called something like "How to Determine Prices for the Saddlemaker and Leather Worker". He advertises it in the classifieds of LCSJ and Shoptalk still I think. Most profitable $40 I ever spent. Pretty sure that Shoptalk has it in their book section too. Basically it tells you how to figure overhead, and what goes into that. Then figuring an hourly wage, and combining them to determine a shop rate. Then he discusses markup and profits on materials. The principles are pretty solid and applicable. Some people get hung up on his actual prices and miss the point of how he gets to them. When I got my business license, I got a years worth of advice from a retired business owner/advisor through a local businessman's organization. He read my copy of Bob's book, bought one for himself, and recommended it to some other "handwork" customers to use a model. I don't figure everything exactly like he does, but it was a good guideline to get started.

[Don101]

Bruce some things i can relate to here, i hate it when friends or work collegs come up to me and ask about making somthing for someone as a present or for them selves as they dont realise how expencive it is to buy leather in bulk or the cost of tools or how much you have in mind for a price its always great to watch there eyes light up when the price goes over 100 and most of the time its better to talk them out of it and stick to customers that realise the price of things rether than working for charity, Don

[TracyMoss]

Bruce,

A little off subject maybe, but don't you just love it when they wait till last minute to put in a large order. Especially the christmas time company orders. It makes me want to charge and after hours surcharge for the sleepless nights to get it done on time.