How do you price???

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wrote
on Jan 8, 2009 6:25 AM

I agree as well.  While I am attempting to make more of a business out of my beadwork, I still fall more into the hobbyist category than the pro.  While I have 12 yrs of beading experience and consider myself an advanced level beader, I surely don't have a degree to back that up, and I don't yet make my living from what I do, although it would be nice.

I wholeheartedly support the art of beading as a whole, from casual crafter to artisan.  The members of BD represent all levels, so we definitely want to learn from and respect each other.  I don't think anyone has meant any disrespect, only trying to show different perspectives, and that's a good thing.  Any tips I can use to better represent my work as art is definitely appreciated!

 

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LitaC2 wrote
on Jan 9, 2009 10:30 AM

Ah, pricing... the eternal question.  When I was 14 years old (over 3 lifetimes ago!), and immersed in silversmithing, I had a conversation with several very adult craftspeople about pricing.  None of them could agree on a formula, because each of them had different crafts - the lapiderist couldn't just take the cost of his raw materials, he had to factor equipment depreciation and lapidary supply costs (overhead), but the weaver didn't really have such costs - her looms were generational.  The knitter didn't even understand the concept of overhead.

But one thing they all agreed on was that (1) you must never undervalue the cost of your labor, (2) you had to be realistic when pricing your labor vis-a-vis your materials cost, and (3) you had to understand your market, which meant both the venue and the times.  That was good advice in 1979, and I think it's still good advice.

I would also add, there is a big difference between inexpensive materials and cheap materials.  A project that is made with seed beads, even tohos, is a relatively inexpensive project - but you are going to spend a lot of time creating the item.  In this case, the cost of your materials should almost be irrelevant, and you need to really consider the value of your time. 

On the other hand, a "simple stringing" project can be completed in relatively short period of time, and by and large, the amount of time it takes to complete is not going to change with respect to the quality of the materials.  Since materials will generally be more expensive (unless you're using plastic), your material costs are going to be much more important, but you still can't undervalue your time.  And that must include your design time too. 

Speaking as a "simple stringer"  (I hate that phrase), the majority of my time is often spent on the design process, and when I do sell a piece, I include that time in my price calculations.  A few years ago, I was working a friend's booth at a big bead show, and someone she knew (but I didn't) admired a necklace I had made and was wearing.  It was a 48" long lariat, with several types of pearls (including 16mm natural colored freshwater rounds), plus very high quality jasper and agate, plus Hill Tribe silver spacers and silver beaded tassels.  My materials cost was at least $200, and it took almost 10 hours to create - from the design through the execution.  She asked me how much it cost me to make, and I told her $700.  Since she really liked the necklace, and wasn't trying to steal my design, I broke it down for her.  My beading time (based on my level of experience, the skills employed and my overhead) is worth $50 an hour. 

When she finally wrapped her brain around the concept of valuing time (it was interesting watch her actually making sense of the idea) she asked how I could sell the piece for that price, and I told her, THIS one wasn't for sale.  The next one, made with less expensive materials, would take half the time to make, since I'd have a better understanding of what was needed and how everthing fit together.  If I made that piece again (and I have, several times), it would cost only $400, even using the same materials. 

 

Please see my projects at Stoneheart Beads

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on Jan 9, 2009 11:10 AM

Your beading is a part of your business, you have calculated all your costs of doing business, including overhead.  O have you?  How about the cost of money? 

A manufacturer borrows money to buy goods, interest is paid on that loan, that is the cost of money.

I didn't borrow money ...

Oh, where'd you get it, is it in savings or other investment making money for you?  Or did you find it on the street?  If not, then it has been borrowed from those uses.  THAT is an often missed cost of doing business.

If you are serious about making money at beading, you need to consider all costs, not just the more obvious ones.  Also, all shipping costs, including from vendors to you, wear and tear on vehicle used to go buy the supplies, etc. ...

A class in manufacturing accounting and management accounting are just as useful as small business accounting for any small business.  I have had all those, and more, maybe that is another factor in my not wanting to 'make and sell' beadwork.

And do not forget the value of your time when you fill out the additiional paperwork running a business requires at tax time.  That is enough to make me decide to NEVER start a business.

Ah well, ya'll need customers too.

Stan B.

 

Stan B.

Lakeland, MN

USA

Ignorance is curable; Stupidity has neither cure nor excuse.

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Liana@5 wrote
on Jan 9, 2009 11:15 AM

When I spoke to a friend of mine Schad, who owned his own technology business he broke it down for me this way. First factor the cost of your materials. For me I spend between $0.15 to $2.00 per clasp, I buy a $20 spool of wire, and get about 50 piece off it, so 20/50= $0.40 per project, you try the same things with the individual materials you use, average how much you get per product. Finally after your materials cost comes the tricky bit, labor cost!

So his best advice was to take my favorite job I've ever had and what I got paid to do that. Give your self a 10% raise and you can use that as your own labor cost. So my favorite job paid me $18, I decided not to give myself the raise I add in %10 to the final cost. If I spent half an hour on a given project then it has a labor cost of $9! You can also decide what you would pay yourself any way you want. How much would it cost to keep you going? Some might work for Minimum wage just to "keep the lights on".

I work with a lot of seed beads, but try to keep my projects in a reasonable length, so I keep my final costs around $20 a project. The reason I like to add 10% at the end is because I like to bargin, and I like to give my customers room to negotiate DOWN that %10 if they want to feel they are getting a special price. It lets them feel good, while I am still paid for my time.

Finally, if you chart this all out you can be prepared to file taxes, deducting you MATERIALS cost and declaring your income on your labor.

I was intimidated to go pro, but it really gave me a confidence boost to go from a having a hobby (obsession) to being in business.

HOPE this Helps.

 

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Posts 2,145
on Jan 9, 2009 11:20 AM

Liana,

Very good, very clear.  I like your method of determining labor costs.  Some wil insist that you are undervaluing your labor, but it seems to me that your friend was correct.

Good luck.

Stan B.

Stan B.

Lakeland, MN

USA

Ignorance is curable; Stupidity has neither cure nor excuse.

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JoellaM@3 wrote
on Jan 23, 2009 8:35 AM

 I totally agree w/ Jim -- I was amazed to see how many of you that discussed pricing don't take into account  your time shopping, of pricing and making tags for things, for having a booth somewhere, etc, etc. And for the person who said ' would I buy it for this price' -- that's not the way to price something. As Jim said -- you are hurting not only yourself but the other jewelry artists also when you price something too cheaply. Joella

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audreyag wrote
on Jan 23, 2009 12:39 PM

Way to go!!! I am a hobbyist - wanna be professional. That is, I am trying to create beautiful and quality pieces. I have a website (2 counting Etsy) and am regularly told how good my pieces are and how well I coordinate colors. I try to be unusual and original. As a professional - yes, I have two master’s degrees, albeit in English and Library Studies instead of art or jewelry. I know how it feels to not be valued for my training. Unfortunately, we don’t wear our degrees on our foreheads, and most people don’t realize. That said, a degree definitely does not determine a person’s worth or the worth of his or her product. It also does not give anyone the right to belittle another person’s work because they’re a mere “newby” or “hobbyist.” I hope that those that consider themselves professionals also love their work and also consider themselves hobbyists. If not, then they’re no different than any other person who goes to work every day and wishes they could just do what they want. Also, if they don’t love it for the joy of working with beads or other beautiful materials then their work will show that and be somehow less. I taught high school English for 30 years and tried to instill into my students the respect they should feel for everyone else, no matter station in life or education. Same goes for everyone here. I love forums because they’re a source of much knowledge and lots of reassurance. They open up a whole new world with people I’m sure I would really like if I could meet them. I like them even though I haven’t met them, in fact. However, it does get to me when some come across like they’re better. I guess it takes all kinds, and I usually don’t say anything. But this really demands an answer. If a student in one of my classes had belittled another student, I would have come down really hard on that student - in front of the rest of the class.

Having said all of that, I also have trouble pricing my work. I would like to price it fairly - and I have some out there priced fairly high - I have yet to sell it on the web or at sales. I have sold some highly-priced pieces to people I know and to their acquaintances. I am “merely” a retired teacher, but I do have to earn money to live retirement comfortably - you know, buy beads, go to movies, go out to eat now and then - the usual things that make life fun and livable. My usual method is to triple my materials. I’d like to charge by my time, also, but I can never just stay with the job - always being interrupted by many things that life throws at me like phone calls, washing, cleaning, visits from friends, etc. Since the economy is in trouble, I have taken to giving 20% discounts for items over $50. I don’t do that everywhere, but on my website and at the shows I do that even though it hurts. However, there is something to be said for being paid a lower price over not being paid at all. I don’t want to lower the original price, but somehow a sale price can always be discontinued. I DO agree that there are too many - even hobbyists - who way undersell their work and it DOES hurt the rest of us. At the last show I went to, there was a lady selling her Swarovski necklaces for $8 or $10 and it really irritated me. My jewelry was more expensive and others told me that the quality was higher than the other booths, but I still didn’t sell much whereas they were doing a “bang up” business.

I guess competition is just that - and we just have to decide whether we are going to give in or keep our prices where they belong and ignore the people who are undercutting our prices just like everyone else in the retail world. Thanks for listening. I’ll try not to get on my soap box too often.

AudreyG

http://www.serendipitybeadedcreations.com

http://www.serendipityag.etsy.com

May you always have love to share, health to spare, and friends who care.

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Carimouse wrote
on Jan 23, 2009 2:00 PM

 This is what I was told by a lady on the craft show circuit: Keep track of what your materials cost. Multiply by three, and you've got your price. The first third is to cover the cost/replacement of materials; the second third is to cover any increase in price (you bought those charms for $5 last time, but now they cost $7); and the last third is your profit.

That holds pretty true for a lot of things. For the more intricate and time consuming stuff, then I start looking to charge more for time than material.

 

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on Jan 23, 2009 2:26 PM

Cariad:

 This is what I was told by a lady on the craft show circuit: Keep track of what your materials cost. Multiply by three, and you've got your price. The first third is to cover the cost/replacement of materials; the second third is to cover any increase in price (you bought those charms for $5 last time, but now they cost $7); and the last third is your profit.

 

 And therein lies the whole point to this discussion.  So many people have completely differing methods to determine what they charge for their creations.  There is NOT just ONE correct answer, period.  But there is an answer that works for each of us, whatever the method happens to be.

 There really should be no argument about this.  Except when it comes to someone who thinks he/she is better than everyone else and tries to belittle others and demean their work, which, in any industry, is not tolerated for long before that person is put into his/her place.

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mornac-m wrote
on Jan 23, 2009 2:29 PM

Excellent perspective.

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sarabu wrote
on Jan 23, 2009 5:23 PM

Perhaps to make a point, and not ruffle anyone by being personal-

Take our selection of beads.  There are many wonderful beads made- cut or fashioned- by hardworking people who would like to make a living doing what they love, and they are priced at what would make that possible.

Someone- or even some country of someones- comes along and says, "I can do that for less".  Perhaps they even blatantly rip off designs and steal photographs to do so.

The market responds- yeah!  cheap(er) beads! We can all buy some!  We can all buy more!

Original artists despair- our livelihood is threatened!  They stole our stuff!

And for awhile, the newcomers prosper, until bead start to break, or the beads really are not so pretty as the first ones, or people get sued over copyright infringement, or the market is so-well, distressingly SIMILAR that no one is selling much at all.

Except the person with the NEXT new idea, the fresh one- or maybe the one making a quality product for less, but still profitably.  But the junk will fall to the wayside, and the playing field will have changed.  Some original bead makers will still be valued for their craftsmanship, or their design, and some newcomers will be valued in their own right, too.

It's all a cycle, some people will find that they are not able to live doing their life's sole passion, some will have to compromise, some will have to supplement.  No one owns the right to make a living doing anything, we can all just try and do what we can.  Enterprises go out of business all the time because of various reasons-  costs go up but customers resist paying more, a new hot place opens up down the street, technology makes doing things the "old" way less practical or affordable- you name it.  It's all part of the cycle, hard as it may be to adjust ourselves or face the facts.

An alternative is price fixing.  ; )

 

 Sarah

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JennyA@11 wrote
on Jan 24, 2009 6:58 AM

 

I also bought Eni's pricing calculator a few years ago.  It helped me realize what other were charging.  And I do not use it for my simple beading, but I do use it for my husbands metalsmithing and hand torched glass.  If I wire-wrap something I will use it as well.

As for simple beading, I just take the cost of my materials times by 3, earrings and cheap bracelets sometimes works out better for me to just add $10 to the cost.  I sell in a store and they take 30% and when I started using this formula I started making more money then her-so I am happy with that.  I should make more than her because I made it, she just supplied the store and the person to process the transaction.  I know she would love to make more, but I don't think my jewelry would sell as well if I had to raise my prices again.

Those are my two cents from Missouri!

Happy creating everyone

Jenny

www.alexandersdesigns.com

 

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HelenC@47 wrote
on Jan 24, 2009 6:27 PM

 I agree with your pricing.  I also try to tack on  bit of shipping and handling if I have sent for beads and supplies. And tax when you buy something not on your business account.

Avalon Arts

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Posts 791
on Jan 25, 2009 12:26 PM

 Tacking on extra for online orders which include shipping and handling??....I work out the certain percentage that should be added to the cost of the beads on that order as they are added to stock, NOT at the time of sale of a creation made with those beads.  And if I don't pay for shipping and handling for an online order, I certainly wouldn't jack up my price to account for "what may have been".

 TAX....that's a whole other conversation.  Here in California, I am supposed to add tax to each sale WITHIN the state of California only.  If I sell something to Sue in Michigan, then I am not required to pay CA tax on that sale and should not be charging her tax since I do not pay taxes in Michigan.   Also, charging tax on a sale within CA is completely separate from whether I am charged tax when I purchase an item.   See, clear as mud.

 And THAT only validates my post above about there NOT being only one correct answer on how to price.

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Posts 2,145
on Jan 27, 2009 11:31 AM

 

I was just reading FMG's "Newsletter for Jewelry Makers - Making Jewelry and Making Friends ... For Fun and Profit" at " <http://www.firemountaingems.com/encyclobeadia/beading_resources.asp?docid=8A2R&WT.fmg_linksection=5JQA80LOM148&WT.mc_id=NL090120>.

The article includes some things I haven't seen on BD. I didn't copy it -- Copyright, you know

Stan B.

Stan B.

Lakeland, MN

USA

Ignorance is curable; Stupidity has neither cure nor excuse.

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