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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.

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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!

 

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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

 

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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

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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!

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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.
 

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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

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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>.

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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.

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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.

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With all due respect to @nrk and @LatigoAmigo , re-read the WHOLE paragraph from my first post.

Translation - I can't reasonably charge more than the market will bear for similar quality, just because it currently takes me more time than others to achieve that level of quality. It is market price, not hourly rate, that is generally the controlling factor in pricing. 

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21 minutes ago, JazzBass said:

It is market price, not hourly rate, that is generally the controlling factor in pricing.

I'm feelin' ya. Most of us are not following a "business model," and do this more for fun than for money. There are people on this site who seem to be profitable, but they have extraordinary passion and drive. I'm retired and just "making art," and pricing in the art world is a whole different animal, that is why I said "whatever the market will bear." When I factor in my overheads, materials, time and depreciation, I am making minus dollars per hour, but boy, am I having fun and leaving a leather legacy.

Edited by LatigoAmigo

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8 hours ago, JazzBass said:

It is market price, not hourly rate, that is generally the controlling factor

I'm full on with ya on this.  Where the water gets muddy is that batch who think that if they preach enough, make enough mindless videos, drone on long enough in enough places -- SOME will begin to say that the market should "bear" more DUE TO the per hour wage.

Take a couple of examples:

Like your $300 guitar strap.  That is not at all unreasonable and many would happily pay that.  But as a rule at $300 it will need to be a nice looking, solid, quality strap (barring some idiots who succumbed to the dumbing down of the planet and a poo-tube addiction).  And though many don't like to admit it, or even talk about it, people DO COMPARE items.  So the hype and pep of poo-tube only extends to the place where somebody else shows another option.  The problem (relating to the original question here) is that SO many see some nice looking, solid $300 guitar straps - decide they want to make guitar straps and get paid $300 - and then offer something CLEARLY sub-acceptable and price it at $300 because "that's the going market rate" (that's ignorant enough I'll leave it at that).

From a buyer perspective... yesterday I was going through the place doing all those things a guy should get done before Jan 1 ;)  Oooo... bit low on the business cards and receipt stuff.  In a new town since I last ordered.. so do I want to continue with the last girl who did printing for me, or should I be looking to "shop local"? Jennifer- my previous graphic girl -  is not only very talented graphic designer, but CUTE, CUTE, CUTE... so.. what to do?@!  

Called a couple of places here, and was told each time I would need to come in to discuss it.  Really?  VistaPrint does very nice business cards - quickly and accurately and for not much money - all without ever seeing me.  Without ever talking to me.  Just send 'em a graphic file, they send me neat stuff.  But I went in.

Very polite gal had examples waiting for me showing different styles.  So I started out with the bottom line.. VistaPrint will do nice cards, delivered to my door, for under $20 for 500 cards.  I'd like to shop local - if that costs a bit more, that's okay, as long as it isn't TRIPLE.  I relayed the short version of how I just got new "maker" stamps made,  and did NOT 'buy American' since the American quotes I got were late, or DOUBLE the price for less quality, or both. Other words, somebody who is INCLINED to 'buy American' was actually talked out of it by cost and service problems.  After about 5 minutes of BS and "smoozing" clearly aimed at 'being sociable', she tells me that 250 cards would run about $50.  The card she shows me, which is her "low end" card, was notably thinner than the ones I got from VP, and the print quality was about the same on both. WAIT.. WHAT???@!  That's half the cards for 5x the price - you math ppl will recognize that as 10x more expensive per card, without any benefit increase.  And THERE is the issue.. if I'm asked to PAY more, will I be GETTING more? In this case, I'd be getting less, paying more.  Less versus more requires that you COMPARE.

  • { Just a side step for a moment - time DOES matter.  And the hour and a  bit I killed going through all of that was more important than the $50 in question, but we weren't even to the other things I wanted yet.  And the point to be made here is that while the time DOES matter, it's NOT LEGITIMATE to charge that hour to the customer -- your buyer is not responsible for all of that any more than VP is responsible for this woman's lack failure to streamline her approach.
  • Now, I certainly could have capped that off in less time.  But since she got me down here to show me some flashy colors and JACK the price - when it could have all been done with an email and a graphic file - I decided to return the favor and waste a bit of her time.  I mean, really the only way she can back out of that is to admit that the face-to-face wasn't necessary to begin with.  Which she won't do.
  • I understand that a charge for graphic design is LEGIT.  But the design was already done for them - just print the thing.  I could do it myself, but that takes my time away from something else.}

So I won't be making a purchase with that print shop. If they gave me a quote, it would include the TIME it takes, which is only going to remind me that she should owe ME for MY time.  And "overhead", but I'm not responsible for you agreeing to your lease, which downtown is about 1 gold bar per square foot of space. 

So what to do?  I called another print shop, got the same "come in to discuss" thing, and when I pressed for a BEST GUESS of how much and how long to receive, I did get at least SOME numbers.  But in the end, I tired of trying to get a legit quote for a simple job. I clicked a few buttons and ordered cards from VistaPrint, which cost under $20 and are scheduled to BE HERE by Friday with a design I already approved (my design).  And I ended up working until 7:00 pm when I could have been done by 5:00.  My mistake -- should have done that in the first place.  I'll send Jennifer a birthday card.  WAIT>.. can you send cards to the girl who designs them :o

TO the original question, I would have people asking

  • what am I getting, and
  • what am I paying.

Each person makes up his/her own mind. Do whatever you want with your own money.

  • Some like to pay less whenever they can. 
  • Some like to pay more, even when they didn't need to, because they think the "neighbors" will be impressed at how much they "can" pay. 

I'm somewhere in the middle I guess.. I want to pay as little as I can AND STILL GET WHAT I WANT.  So I showed that woman an example from VistaPrint, right along side her several examples.  Asked her to show me why I should buy hers instead of someone else's.  Never did get an actual answer to that.. just an eventual quote for 10x the cost.  But I WOULD have paid the 10x if she could show me CAUSE to do it.

SO much of that these days.  This morning I was looking up a Glock sumthin-sumthin.  Took me to a poo-tube video, which I thought was unnecessary but acceptable.  Guy droned on quite a bit, so I got coffee.  When I got back, some OTHER video was playing. Pudgy boy down south showing how to make a holster ... but he aint tellin me.. just some hands on the screen and I'm supposed to read the words on the screen, I guess.  Now, if you're thinkin' this post is long, you can read it in 3.5 minutes - so how long does a 15 minute video of writing seem?@!  SAD part is, when he goes to price the holster, he'll include his "so important" time he spent on that video as part of what I should pay :rofl:

Want to sell me a holster? Or a belt?  Guitar strap? Maybe a leather photo album?  Whatever.... tell me WHAT I GET and WHAT I PAY. 

  • If it's not done well, no amount of discount will cause me to buy it.
  • If it IS done well, don't be afraid to ask me to pay MORE, but be prepared to tell me WHY I should pay more. 
  • Don't include names -- unless it belonged to Elvis, your name doesn't matter.
  • Don't link me to a video of how you made it, unless I ask you how you made it.  I'm buying the LEATHER, tell me about that.
  • Don't give me the "made by vets" speech. As a tax payer, I ALREADY paid you for that.  Now tell me why your product is a better option for me than some other one.

Personally, I have no issue with somebody turning this around and applying it to me (you SHOULD).  Hey, Jeff  -- you got a holster 'n'  belt right there, but so does this guy, and that guy, and a thousand other guys. WHY should I buy yours?@!  My answer might start with something about QUALITY and COMPARISON. 

Check out "Why are your holster prices below some others?" under my FAQ's if that interests you.  The difference here is - I'm trying to HELP you, not PERSUADE you.

 

 

 

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Amen...and great story . Read every word ;)

 

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Years ago, . . . I worked for an electrician who basically took his cost of materials, . . . multiplied it by 3, . . . and that was the price.  Now, sure, . . . there were adjustments, . . . but the cost x 3 was his starting point.

I basically did the same thing with my leather shop when I first started out.  I took the time to figure out a few items, . . . the ones that sell the best, . . . did a detailed work up, . . . and ever since, I've just adjusted upwards more or less the % that my raw materials go up.  I also put in 10% for THIMS, . . . (things I missed).

If you really want to do it, . . . an Excel worksheet is your answer.  Put in the item, . . . divide it down to feet (length), . . . square feet, . . . liquid ounces, . . . etc.  Add into it the cost of your conchos, . . . belt buckles, . . . rivets, . . . chicago screws, . . . 

If you take the time to set the thing up correctly, . . . all you have to do is hit one button, . . . it will tell you the actual cost you paid, . . . or the replacement cost (new pricing is taken into account), . . . etc.

May God bless,

Dwight

 

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I just got an email from VistaPrint that the business cards I ordered FRIDAY (it's now Mon morning) are boxed and ready to ship, complete with tracking number :o

Amazing the things you can get done when you don't spend your day telling people how important you are :rofl:

For those who dont want to read my last (relatively long) post above (hey, I dont fault a fella :dunno: )... that's 500 cards, in less than 48 hours, on a weekend no less, for 10% of what the local guy wanted for making less quality and taking longer.

POINT IS for this conversation.. the TIME IT TAKES you may not be a legit factor.  Over the years I've known quite a few people who got jobs (instead of working for themselves) because they want to be getting paid even when they arent doing anything.  Money just because an hour went by.  Each his own, but I don't pay people more just because the clock changed.

 

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And then again, . . . for the simple minded who need business cards, . . . there is this option:  print em yourself, . . . 250 cards for 8 bucks.

I did the artwork and layout myself one evening, . . . I'm happy with it, . . . works for me.

I pull up the file, . . . lay a sheet of 10 business cards in my laser printer, . . . hit the "GO" button, . . . 10 cards in a total of 30 seconds or so.

May God bless,

Dwight

business cards.jpg

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28 minutes ago, Dwight said:

250 cards for 8 bucks.

Dwight, hopefully I can use your numbers for an example without offending.  No offense intended, just showing my train of thought.

We both did our own art work, so that's all the same.  We both "approved" our design, since we did it.  At some point, you (or someone you know) went to a store, or clicked a web button and entered card info.. whatever ... in some manner you bought the proper paper.  Maybe that's what the $8 is for? Does that include the trip and the time?

I ended up paying $18.17 after tax and shipping, so 250 for $9.09 .. or $1 more than you spent.  But, instead of 30 seconds per 10 (3 seconds each is pushing it, since you still have to separate and stack) adds up to 750 seconds for my 250 order, other words 12.5 minutes - and I do not believe I could separate and stack 250 of them in that time.

Not that a guy shouldn't do his own -- that's a viable option for some.  Your cards are clean, and I DO like that tag line ... "affordable gun leather for those who can't afford to be without their gun leather" is GOOD STUFF ;)

The idea in this thread is ... I don't wanna see somebody trying to 'smooze' me into thinking that the time he spent making cards should somehow jack up the price of the belt he's trying to sell me :)

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12 hours ago, JLSleather said:

Dwight, hopefully I can use your numbers for an example without offending.  No offense intended, just showing my train of thought.

We both did our own art work, so that's all the same.  We both "approved" our design, since we did it.  At some point, you (or someone you know) went to a store, or clicked a web button and entered card info.. whatever ... in some manner you bought the proper paper.  Maybe that's what the $8 is for? Does that include the trip and the time?

I ended up paying $18.17 after tax and shipping, so 250 for $9.09 .. or $1 more than you spent.  But, instead of 30 seconds per 10 (3 seconds each is pushing it, since you still have to separate and stack) adds up to 750 seconds for my 250 order, other words 12.5 minutes - and I do not believe I could separate and stack 250 of them in that time.

Not that a guy shouldn't do his own -- that's a viable option for some.  Your cards are clean, and I DO like that tag line ... "affordable gun leather for those who can't afford to be without their gun leather" is GOOD STUFF ;)

The idea in this thread is ... I don't wanna see somebody trying to 'smooze' me into thinking that the time he spent making cards should somehow jack up the price of the belt he's trying to sell me :)

No offence my friend, . . . some folks are content to farm stuff out, . . . others like to keep it in house if possible and practical.  I'm the latter guy, . . . got burned too many times in years past on other things, . . . found out if you want a job done right, . . . best do it yourself if you can.  

Actually that is what got me re-interested in leather work, . . . making my own leather for my guns, . . . and I just branched out. 

I know the quality my customer will get, . . . but do not know what they will get from an XYZ holster sold here in the states from Naugatuck, . . . but actually produced in China or some similar place.

My cards are a reflection of me and my method:  simple, to the point, unadorned, and unpretentious.  AND, . . . if I ever decide that I need to make a change, . . . since I only run em 10 at a time, . . . I haven't lost much if I decide to chuck the ones I've got now, . . . in favor of something better (in my opinion).

But you are in my camp and tepee when you get galled by folks who use faulty practices for justification of their pricing system.  They call it a "cost of doing business", . . . and I just call it tomfoolery, . . .

May God bless,

Dwight

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I use a program called "CraftMaker Pro" that I'd originally bought for my wife and her jewelry making.  It will allow you to keep up with materials for each item you make and add the time, etc.  I don't include anything like thread and dye, but I add lace by the inch and things like that.  At least for me starting out, it gives me a baseline to make sure I'm not losing ground.

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I have found some people who have quoted me a price for something will try to tell me the price is $XX because its handmade and takes me longer, so it costs more. Then on the flipside, another person has tried to tell me the price is $XX because its made quickly with the newest fully auto machines.

At the end of the day, all I am interested in "What quality is the item I am paying for and how much money in total?" If the manufacturer can produce an item of the quality and price I want, I shell out the cash. Their time or fancy machines mean nothing to me.

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32 minutes ago, Rockoboy said:

At the end of the day, all I am interested in "What quality is the item I am paying for and how much money in total?" If the manufacturer can produce an item of the quality and price I want, I shell out the cash. Their time or fancy machines mean nothing to me.

EXACTLY. Don't tell me whether you ordered leather online, or WALKED to pick it up.  Don't tell me if you chopped the pieces out with a knife made from the shin of an elk, or clicked out the parts on a hydraulic press.  JUST tell me WHY I should buy your item, at your price. 

Don't tell me its HANDmade... show me it's WELLmade.  

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1 hour ago, JLSleather said:

EXACTLY. Don't tell me whether you ordered leather online, or WALKED to pick it up.  Don't tell me if you chopped the pieces out with a knife made from the shin of an elk, or clicked out the parts on a hydraulic press.  JUST tell me WHY I should buy your item, at your price. 

Don't tell me its HANDmade... show me it's WELLmade.  

I think a lot of people equate "hand made" to "having given attention to the details of the product".  I'm not sure they care if it was clicked, cut, or chopped out, . . . hand sewn or machine sewn, . . .  if they can understand that the maker took the time to create it correctly, . . . and it passed a decent "QC" inspection, . . . they are happy.

At least that is the type of feedback I get from my customers.

AND, . . . yes, . . . they do want HANDmade to be WELLmade.

May God bless,

Dwight

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6 minutes ago, Dwight said:

I think a lot of people equate "hand made" to "having given attention to the details of the product"

That's how I WOULD like to think of it.  But I've seen the multitude of ads 'n' posts on cutesy and various web sites (including lw.net) insisting that "flaws" and "defects" are what MAKES it handmade.  And I have been told on more than one occasion that "can't be hand made, it's too perfect".

It's ridiculous, but still consistently claimed.  Obviously false - since tanneries charge MORE for leather WITHOUT this "charm" and "character" ... ;)

 

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