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Pricing your work

M

mt_hangglider

Joined
Jan 19, 2009
Messages
312
All,

I have been doing leather work for around a year and a half now. Some of you probably remember seeing things I've shared here from time to time. My question for those of you who do this for a living or as a profitable hobby is how do figure out how to price your work? I recently worked out a trade deal that involves a heavily tooled valet tray (using Herman Oak) and shark sheath with kangaroo liner. I have no idea how to price my work. Any thoughts or suggestions would be greatly appreciated. The tray can be seen below and took 15-17 hours to make. The sheath is still in the works (well the second version of it anyway :D) and should be completed soon. I know there are a lot of variables that go into charging for leather work such as your name, reputation, quality of work, fit and finish, time spent, etc. If anyone can give me ideas on how to go about figuring it out, I'd love to hear your thoughts. These are the first two items I've ever had to put a value on as it has all been for myself, friends, and family up to this point free of charge until now. Thanks in advance!

30561779895_0a37df883e_c.jpg
 
First of all...I've spent the past 5 minutes staring at that tray...holy cow that's increadible. What beautiful work!!!
What I've noticed in knife making, is that I dont at all get paid for the time I put into a knife:). A lot of that is that I'm not a professional shop and don't have the equiptment that pro makers have (or the experience) to be fast enough to get paid for my time. Maybe I'll spend 25-30 hours on a knife and get paid $135 for it...if I put $40 in materials into it, I really didn't make much per hour:).
Anyway, not sure how useful this was, but I think it's a matter of working up the latter and gaining credibility as you get "known" plays a big part in pricing.
As earlier stated, your work is beautiful and I'd totally want to buy one of those trays!!
 
You've been putting out some really nice stuff. Keep up the good work!
As for your question, it may very well be harder to master than any other skill to strive for.

It doesn't really do much to answer it in terms of $, but here is a copy/paste of my comments on a similar discussion on FB.

"I don't even use a formula for my time yet. I have different values or ranges I charge for different options, but no strict formulas. Some things I imagine I am too high, but others I'm sure I'm too low.
If things are selling quicker than you can put them out, you probably need to raise your prices a bit. If you are sitting on stuff for months at a time, you may need to reassess your prices or you might need to look at your market, whether it be the style and quality of the item, regional aspects and even the demographic of your target customer.
If one does drop prices, make sure you are doing it of your own accord and not allowing the customer to undercut you on what your work is actually worth by taking offers you shouldn't be."

A novice can and sometimes puts out a piece on level with a master. However, it is safe to say that even though the 2 items are of equal value, the master made more $/hr simply because he spent less time creating his piece.
I guess it boils down to knowing your market and where you fit in it. Hope this helps!
Chris
 
Nic and Chris - Thank you guys for the great thoughts and kind words! This gives me things to think about and gets me closer to being able to set a price for my work. I greatly appreciate your well thought out replies!
v8r - Thank you!
 
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Great question Chad and something I still ponder on occassion even after all these years. Here is what I've come down to. Shop rate for time plus 1.5 times material cost. With that formula which I use on everything I make not just leather items I make a profit and don't seem to price myself out of the market.

I read this post before dinner last night. Joining us was our ranching partner, an experienced businessman with a degree in business. Also joining us for dinner was afriend and her husband. She is an accountant and a materials supply officer for a very large national corporation. I showed everyone your post. First and foremost everbody was very impressed with the tray. Wow! was the general comment. Now this is not an easy crowd. Everyone here is very familar with handcrafted items of the finest quality its just a part of our culture so to speak. Under the table was 3 pairs of custom boots, over hanging on the wall were 2 custom hats. Just finished working some horses and all the saddles were custom as were almost all the gear, bridles, bits etc. This was a handmade crowd. So general consensus was $450 for the tray. So $450 divided by 16 hours is $28 which ain't bad wages when you're new in a craft. Here's the diff. I asked Nichole how long it would take her to carve that and she said how big is it. I told her it ws laying on a couple of paper towels so lets guess the carved part 8x11". She replied about 4 hours. (she was really impressed with your carving by the way). Because she's done a lot more carving than you and is faster, her $ per hour goes up. So after cussing and discussing it we pretty much came up with my 1.5 materials cost plus hourly shop rate. Course we can't set the shop rate for ya. The 1.5 materials cost takes care of shipping (to get the supplies) and all those little consumables that you forget aboutat will eat into profit if ya don't include them. Things like glue, thread, machine oil etc all those little things also have to be accounted for and 1.5 matierals cost seems to handle it well.

So more pondering. Hope this helps.
 
And once again Dave to the rescue:). I enjoyed reading that, and it's great insight... thank you!
 
Horsewright said:
Great question Chad and something I still ponder on occassion even after all these years. Here is what I've come down to. Shop rate for time plus 1.5 times material cost. With that formula which I use on everything I make not just leather items I make a profit and don't seem to price myself out of the market.

I read this post before dinner last night. Joining us was our ranching partner, an experienced businessman with a degree in business. Also joining us for dinner was afriend and her husband. She is an accountant and a materials supply officer for a very large national corporation. I showed everyone your post. First and foremost everbody was very impressed with the tray. Wow! was the general comment. Now this is not an easy crowd. Everyone here is very familar with handcrafted items of the finest quality its just a part of our culture so to speak. Under the table was 3 pairs of custom boots, over hanging on the wall were 2 custom hats. Just finished working some horses and all the saddles were custom as were almost all the gear, bridles, bits etc. This was a handmade crowd. So general consensus was $450 for the tray. So $450 divided by 16 hours is $28 which ain't bad wages when you're new in a craft. Here's the diff. I asked Nichole how long it would take her to carve that and she said how big is it. I told her it ws laying on a couple of paper towels so lets guess the carved part 8x11". She replied about 4 hours. (she was really impressed with your carving by the way). Because she's done a lot more carving than you and is faster, her $ per hour goes up. So after cussing and discussing it we pretty much came up with my 1.5 materials cost plus hourly shop rate. Course we can't set the shop rate for ya. The 1.5 materials cost takes care of shipping (to get the supplies) and all those little consumables that you forget aboutat will eat into profit if ya don't include them. Things like glue, thread, machine oil etc all those little things also have to be accounted for and 1.5 matierals cost seems to handle it well.

So more pondering. Hope this helps.
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Thank you Dave for the great reply! Absolutely a lot of help as always! Yeah, I can definitely see that a person with a lot more experience would be a lot faster. That's one of the things I notice is everything takes so... much... time... since I'm trying to do things as well as possible. The hours just seem to evaporate and it takes me so much longer than I think it should to do stuff. But, the trade off is quality over speed which to me is worth it. I'm sure speed will come with experience and proficiency. The biggest reason I have so much time into that tray is all the miles and miles of backgrounding. Probably not necessary or normal to do it that way but I kind of like the look. To cut a massive amount of time off this project I could have just very carefully beveled the outer edge around the wolf and only backgrounded the inside areas. That may have even cut the time I spent in half or more. It's all a learning experience and is a lot of fun too so even with 16ish hours into it, I have no regrets. Thanks again for the reply! Oh and yeah, you are spot on with that being around 8 x 11 for the actual carved / backgrounded part.

Nic. said:
And once again Dave to the rescue:). I enjoyed reading that, and it's great insight... thank you!
Click to expand...

Agreed!

Nic. said:
And off topic...may I ask what tooling tools you used to make that?
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Nic - I used a swivel knife, bevel stamp from Barry King, and a diamond grid pattern stamp in three different sizes from Craftool (Tandy) for all that backgrounding.
 
I would like to add that when you are figuring material costs, you figure what it would cost to replace what you use, not what you paid for it. Something you bought a couple years ago, depending what it is, may now cost double or even more to replace. The current market is what you use. This also helps you put value on something you might have traded for, which I know Dave does quite a bit of.

Chris
 
There are a lot of variables to figure when pricing. When starting out I would just suggest looking at competitor pricing and see where you fit in. It's going to be very difficult to compete and be profitable if they can do something in 4 hours that takes you 20. There is also the business or hobby aspect, a business generally has far more overhead to deal with and be profitable whereas many hobbyists are happy if they can replace materials and get a little extra for new tools etc. Somewhere you have to decide whether you want to be a hobbyist and turn out some high quality pieces here and there while still having a day job or start your own business.

I have a several hundred things that I have to keep a running stock inventory of every month, the downside of having so many different products, materials, inventory, building costs, taxes and more taxes, utilities, machinery wear and tear, insurance, workers comp. The list goes on and on.
I can't do 1.5x and lump all the small items in like Dave does, my brain refuses to work without exact numbers :D different math but we probably arrive around the same numbers. I have everything down to the last penny to remain profitable and still be in business next year.
 
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