Pricing?

[LeatherNewbie76]

Now Im sure this is a popular topic that has already been talked about, however, I am interested in learning how to price my leather. Now that i have gotten skill under my belt people are wanting to pay for my items.

My only issue is pricing it. I understand the principle of (Material cost x labor x 2) to get your wholesale price and so on. 

How do i go about figuring out my material cost? I.E cost of the amount of thread used, Leather size, studs and rivets per each. I buy in bulk so I cant justify making a name tag with one rivet that cost $40 in a bag of 100 or more. Im sure I can price the leather by square footage as well. My thread spools are large so how do i price the amount of thread? 

 

Looking for any advice on this from professionals and trying to turn a profit on my work. Not to make a killing just to continuously fund my work and help it grow.

[JLSleather]

I don't "count" some things:

thread ... $20 per MILE basically.  So, I can't be bothered (really) to figure out "per inch" - which is what you'd have to do to be accurate.  How much thread is in a belt?  Well, that depends on how many rows of stitching, and what SIZE belt, and how thick, and how many stitches per inch (8 per inch takes more thread than 6 per inch, for example). 

dye... how much dye on a belt?  Again, WHAT SIZE belt?  How wide?  How dark is the color desired? All that changes the amount.  You can count it, but its easier to count AFTER you do it. Like if you have a 4 oz bottle of dye, and when you're done you have 2.5 oz left, that's simple math based on what the dye cost.

Traveling to get materials, or "do a show"?  That's simple enough... either record the mileage, or fill the tank before the trip and again after the trip and you'll know exactly what the fuel cost was.

Shipping figures in.  I can order ONE side (which I HAVE done) and pay $30 shipping.  Or I can order 10 and pay $60.  Split that over the 10 and that's 80% less shipping than buying individual, though the material is the SAME.

I APPRECIATE you "gotten skill under my belt " before looking to market stuff.  SADLY, these days that's the exception rather than the rule. Every day I see leather belts listed at $60-100 apiece, clearly made by people who looked up what OTHERS were charging and stuck that same price on theirs, though the quality is clearly not the same.  Not my place to price somebody ELSE'S work, but good to see somebody AT LEAST CONSIDER quality first!

 

[Northmount]

If you look at automotive repair shops, they have added a couple lines at the bottom of the bill:

• Misc shop cleaning supplies
• Misc shop materials
• Environmental fees

Everyone pays the same fees regardless of the size of the job.

You can do the same to account for the small bits and pieces.  When we were running a computer sales, service and networking business, there were a lot of low cost items like power cable splitters that were bought in bulk, and used 2 or 3 at a time.  Instead of trying to put a fixed markup on these items, we said anything under $4 gets charged out at $5 each.  That helps avoid having to have a price list for all the individual items, freight, replacements due to damaged or defective items, etc.

You can look at other sellers and commercial establishments and see what similar items are retailing for.  Need to consider quality when you do this.  Then price your product accordingly.  Then you don't need to count all the bits and pieces that go into the end product. 

There are lots of ways to determine pricing.  But if you spend too much time figuring out the bits and pieces, you will have to add that cost into your product too. 

You can do a search on our forums and find many ideas and comments on pricing, including spreadsheets or similar.  Or just get to work and make some money.

Tom

 

[nrk]

26 minutes ago, JLSleather said:

I APPRECIATE you "gotten skill under my belt " before looking to market stuff.  SADLY, these days that's the exception rather than the rule. Every day I see leather belts listed at $60-100 apiece, clearly made by people who looked up what OTHERS were charging and stuck that same price on theirs, though the quality is clearly not the same.  Not my place to price somebody ELSE'S work, but good to see somebody AT LEAST CONSIDER quality first!

true

@LeatherNewbie76
you can easily find out the cost of the rivets, threads, glue etc. - come on, it's simple math man

[JLSleather]

25 minutes ago, Northmount said:

But if you spend too much time figuring out the bits and pieces, you will have to add that cost into your product too. 

Agreed.  Sometimes I ship a box of "scrap" to somebody who can use it, or have a 10¢ on teh dollar sale, because I know I "could" probably use some of that, but the TIME I save on teh next project NOT going through scrap is worth more than the scrap!

[JazzBass]

Good info, to be sure.

My difficulty is more related to time spent vs. ultimate price.
In order to do really quality work at my experience level, I have to go SLOWLY. So...

I have to look at what is being charged for items of similar quality, and set a reasonable price based upon that alone.
This means that I'm most often working for around minimum wage (about $10/hr). I simply can't charge more than a hundred bucks for a belt that generally retails for around $80.

Not being a full time professional, I accept this, knowing that as skills improve, I will make more. Right off the bat, I can also see that a powered edge burnisher could easily save me an hour or so as well, which more than justifies the expense, and will be my next purchase. 

It's a long road to profitability, but I see no other workable way than to price items based on what the market will support for similar quality.
I'll bet that I'm far from the only one who has to accept working "on the cheap" (based on hours), knowing that to make money, my efficiency must improve while maintaining/increasing quality.
 

[Northmount]

For detailed tooling and such, I don't think there are many of us that really make much out of it.  If you have a big name and wealthy customers, then you can sell items for $10,000.  You have to find that niche market and work your way into it.  Need a good salesman to do the promoting while you do the physical work.

There are a number of contractors that do a really great job of their work, but have lots of ups and downs because when they are busy on a contract, they spend all their time working it.  Then when it is finished, they have to go on the hunt to find the next job.  So either you need 2 people, or you have to take time during your busy contracts to do your promoting and be bidding on the next contract.  I think this applies to us as leatherworkers as well.  And yes, having the right equipment can make a big difference to your production and product.  Depends on how serious you are and what you can afford or are willing to borrow.

Tom

[JazzBass]

4 minutes ago, Northmount said:

For detailed tooling and such, I don't think there are many of us that really make much out of it. ...

Indeed. I'd have to charge over $300 for a guitar strap that I made for myself...fully carved, lined, and hand stitched. It would be a rather small market for those who would pay that.

"Production" is about efficiency while maintaining quality. "Artistry" will always be a "labor of love".
Funny thing - like in the music business, "production" pays, "artistry" does not. Often, the better the music and the harder I work, the less it pays. <groan>.

[bikermutt07]

Check out some of the blogs at DG Saddlery. He has some free PDFs on there to help with costing out shop time. His blogs are also chocked full of tips.

[nrk]

23 hours ago, JazzBass said:

I simply can't charge more than a hundred bucks for a belt that generally retails for around $80.

wrong - you can charge whatever you want. it all depends on a craftsmanship, material quality, work execution etc.